Czech Republic Property Investment News

Change in VAT laws to drive demand for Czech property

The real estate investment market in the Czech Republic is due to see increased demand following a change in VAT laws, according to industry experts. Czech VAT rates are due to go up from 5% to 19% as of January 1st 2008 and this is predicted to drive demand for property, particularly from western investors.

The economy of the Czech Republic has seen solid growth in recent years and this looks set to continue. It is forecast that the country’s average GDP growth will be between 6% and 7% over the coming three years. Czech wages are also predicted to increase as the country settles into a period of economic growth.

Another contributing factor to the predicted increased demand for Czech investment property is likely to be the introduction of interest-only mortgages in the country – these will be available by the end of 2007. Increasing finance options is sure to open up the market to more potential investors, both domestic investors and those from abroad.

It is thought that the general positivity of the Czech Republic’s economy will help boost the country’s property market overall; property investment company Property Secrets states that it believes average property prices in the country will increase by 13% this year, with possibly higher increases seen in Prague and Brno. The changes to the country’s VAT laws will particularly boost the demand for investment property, with investors looking to enter the market while VAT rates are still low.