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Property purchase

Foreign ownership

Foreigners can buy property in the Czech Republic, but the laws vary according to whether the buyer is a citizen of the EU or not.

Non-EU citizens

Non-EU citizens purchasing property in the Czech Republic for either business or residential use must have a Czech limited liability corporation (called an SRO) created in their name. An SRO is considered important for foreign purchasers because it provides an essential tax and liability shelter to help with legal compliance issues.

EU citizens

Currently the Czech Republic also restricts how EU citizens can purchase property in the country. The two options for an EU citizen purchasing property are through an SRO, as for non–EU citizens, or as an individual with a Czech residency permit.

Residence permits

Obtaining a residence permit can be difficult for EU citizens. They need to have a valid ‘purpose of stay’ and provide an accommodation address where they are officially permitted to stay while in the Czech Republic. Due to this, most foreigners choose to set up a company.

How to set up a company

A team consisting of a consultant, lawyer and tax professional is needed to draw up the relevant paperwork. As soon as all paperwork requirements have been met, a holding account is opened to meet the minimum capitalisation requirement for a limited liability corporation (€6,823). A company representative must be chosen, normally a Czech citizen or a permanent resident. They will have full access to the bank account and power of attorney over all business decisions. The company exists once it has been registered, which takes up to two months maximum.

Checks and reservation contract

Once a property has been chosen, all the necessary checks are carried out. Once these checks have been satisfied, the lawyer and real estate agent will draw up the reservation contract and the contract of deposit. The deposit amount is normally 10% to 30% of the purchase price.

Title transfer

Once the purchase contract is signed, the buyer pays the remaining amount of the purchase price, which is kept in ‘escrow’. The buyer will then apply to the property registrar to begin the transfer of title.

Costs and taxes

The following is a guide to the costs and taxes involved in a property purchase:

• Lawyer’s fees – usually around 1% (+19% VAT)
• Registration fees – between 0.01% and 0.02%
• Transfer tax – 3%
• Agent’s fees – between 2.5% and 5%

Related items

Documents and Reports

	Czech Republic property investment report (360Kb)
Documents and Reports

Other related pages

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