The Czech Republic is a country that’s steeped in history. With castles, ruins, mountains and medieval towns, it has plenty to explore. As a result, the country sees a lot of tourists, most of whom tend to gravitate towards Prague. If you’re looking for a place to set up new roots, read on to learn about your options.
Renting property in the Czech Republic
There are numerous ways to find accommodation in the Czech Republic, including through newspapers, online portals and local real estate agents. Regardless of how you find the property, however, you should make sure that you see and secure it in person. If you cannot view a property before you move to the Czech Republic, then it’s advised that you stay in short-term accommodation when you first move there, so that you can look around properly before you commit to anything longer term.
It’s important to note that prices are often marked up for expats, so unless you speak Czech, or have a friend who does, you may end up paying more.
Once you’ve found a property you would like to live in, your estate agent will organise your paperwork. Tenancy agreements are usually either fixed-term or run indefinitely until one party (the buyer or the seller) decides to cease the arrangement.
Leases can be provided in English or Czech, but it’s important to note that in any legal matters a Czech contract will be prioritised. Therefore, it may work in your favour to use a friend or interpreter who speaks Czech. They can ensure that the leases are the same, before you sign anything.
The deposit amount required for a lease will vary depending upon the length of your tenancy arrangement, but typically it is set at one to two months’ rent. Outside of this, upfront fees are minimal. However, if you find a property through a letting agent, you may be expected to pay a commission fee, which is usually around one month’s rent.
Buying property in the Czech Republic
Since joining the EU in 2004 and adopting the last amendment to the Foreign Exchange Act (FEA), it has become easier for foreign nationals to buy property in the Czech Republic.
At present, you can buy property in the Czech Republic if you have a Czech residency permit, have been granted asylum, or have a legal entity headquartered there.
Citizens of EU countries (plus Iceland, Norway and Liechtenstein) can get permission to reside in the Czech Republic on demand, without needing to provide a specific reason, and will simply need the following to do so:
• Two photos
• ID card or passport
• Certificate of health insurance
• An affidavit stating that they have sufficient funds (this is to prove that they don’t need to use the social security system)
Citizens of the United States have almost the same process, due to the Mutual Support and Protection of Investment protocol. However, they’ll first need to obtain a visa that enables them to stay in the country for more than 90 days.
For foreign nationals from outside of the EU and US, the process is a lot more complicated. In order to purchase a property, they’ll need to obtain a visa, remain in the Czech Republic for seven years, and obtain a green card, which allows them to buy a property.
Once the necessary paperwork is in place, your property hunt can begin! There are numerous ways you can find property, but we recommend that you use an estate agent. Estate agents will vary depending upon where you’re looking for property, but some examples include:
Prices for property in the Czech Republic vary, with cities such as Kolín, Kladno and Neratovice offering more for your money. But if you’re looking for a balance between cost and square footage, the communities of Ricany, Beroun and Slany are popular amongst expats, due to the convenience of commuting.
Prices in these areas vary, but you can expect to pay around €204,000 to €320,000 for a one-bedroom apartment, €349,000 to €650,000 for a two-bedroom apartment and €364,000 to €620,000 for a three-bedroom house.
If you purchase your property through an estate agent, you can request that the documentation is provided in English. If not, we recommend that you get an interpreter. The buying process can take up to 60 days, and in addition to the purchase cost of the property, you may face additional fees, such as:
• Legal fees: 1% + 19% VAT
• Registrations fees: 0.01 to 0.02%
• Agent’s fee: 2.5% to 5%
• Real estate acquisition tax: 4%
The typical process for purchasing is to find a property you’d like to buy and then to commission a performance report. This will look at the property’s quality and ensure the title security. Once the property has passed the checks, your attorney and the real estate agent will draw up the purchase paperwork, which includes your intent to purchase and the contract of the deposit. Deposits can be negotiable, but they are usually priced between 10% and 30% of the property’s value.
Once the contract is drawn up, ensure you get an independent lawyer to look it over and ensure that it protects and benefits both parties. Some contracts are more beneficial to the seller; for example, they may state that the deposit is non-refundable if the buyer pulls out of the purchase.
Once the purchase contract has been signed by both the buyer and the seller, the remaining balance of the property is due, and this will be held in escrow until the title is transferred over. This process usually takes 31 days to complete.
If you need help with financing the purchase of a property in the Czech Republic, you may be better off finding a mortgage from an overseas lender than from a local bank in the country. However, this will depend upon your financial circumstances. There are 80% loan to value (LTV) options available, but they are limited, as new rules issued by the Czech National Bank (CNB) state that the value of a loan cannot exceed nine times the annual net income. Also, the monthly repayments of the loan cannot exceed 45% of a person’s monthly net income.