Buying real estate in Czechia as a foreigner?

We've created a guide to help you avoid pitfalls, save time, and make the best long-term investment possible.

Buying property in the Czech Republic as a foreigner: a full guide

Last updated on 

All sources have been thoroughly verified for credibility. Furthermore, an industry specialist has reviewed and approved the final article.

buying property foreigner The Czech Republic

Everything you need to know is included in our Czech Republic Property Pack

The Czech Republic is a top pick for foreigners who want to invest in real estate. It offers beautiful architecture, a rich history, and a vibrant culture.

However, buying property in a foreign country can be complicated, especially with all the laws and regulations involved.

Don't worry! This guide is here to make it easy for foreign buyers to understand how the property market works in the Czech Republic. We'll cover everything you need to know in a straightforward and simple manner.

Also, for a more in-depth analysis, you can check our property pack for Czechia.

Can you purchase and own a property in Czechia as a foreigner?

If you are American, we have a dedicated blog post regarding the property buying and owning process in the Czech Republic for US citizens.

Foreigners interested in buying real estate in the Czech Republic will find that the process and their rights can differ from those of local citizens, but it's quite accessible under certain conditions.

Firstly, the ability to purchase property in the Czech Republic doesn't hinge on your nationality per se, but rather on your residency status.

EU citizens, who generally have the same rights as Czech citizens in this regard, can buy property without any special permits. This includes both residential properties and land. However, for non-EU citizens, the rules are slightly more complex.

Non-EU citizens are typically required to establish a company in the Czech Republic to purchase real estate. This is a common practice and not particularly onerous. The company, which you would own, can then legally purchase and own both residential and commercial properties, including land.

This requirement doesn't apply if you are a permanent resident in the Czech Republic. Permanent residents, regardless of their nationality, have the same property rights as Czech citizens.

There's no need for a specific visa or permit just for the purpose of buying property. However, if you intend to reside in the property, the normal immigration rules apply, and you would need a visa or residency permit as appropriate for your circumstances.

As for governmental authorization, the process of buying property does involve some bureaucratic steps, such as registering with the Land Registry.

This process is similar for both foreigners and locals and is primarily a formality to ensure legal ownership and clear property titles.

There's no minimum investment requirement per se for buying property, but if you're establishing a company for the purpose of buying property, there will be costs associated with that, including legal fees and the cost of maintaining the company.

Can you become a resident in Czechia by owning a property?

Czech Republic does not offer a direct residency-by-investment program specifically linked to real estate purchases, unlike some other countries that have Golden Visa schemes.

This means that simply buying property in the Czech Republic won't automatically qualify you for residency.

However, owning property can be a part of your broader strategy to establish residency, especially if you plan to live in the Czech Republic.

For instance, if you're applying for a long-term visa or residency permit, owning property can demonstrate your ties to the country and financial stability, both of which are positive factors in the application process.

But it's important to understand that property ownership is just one element and not a standalone qualification for residency.

For non-EU nationals seeking residency, the Czech Republic offers various types of visas and permits based on different criteria such as employment, business investment, family reunification, and study. If you're considering residency, you would need to qualify under one of these categories.

For instance, if you start a business in the Czech Republic (which is also a common route for non-EU citizens to buy property), you could potentially apply for a residency permit on that basis.

The requirements for these visas and permits vary depending on the category.

Generally, they include proving financial stability, having no criminal record, and meeting health insurance and accommodation requirements. The process involves submitting various documents and going through an application procedure, which can be quite bureaucratic.

The length of residency granted also varies. Initially, residency permits might be issued for a limited period, like one or two years, but they can often be renewed.

Permanent residency is typically a separate process and requires living in the Czech Republic for a continuous period, usually five years, along with meeting other criteria like language proficiency.

Regarding citizenship, holding a permanent residency is a prerequisite for applying for Czech citizenship. You would typically need to have been a permanent resident for a certain number of years, demonstrate language proficiency, and fulfill other integration and legal criteria.

As for how many people have used property ownership as part of their residency strategy, specific numbers are hard to pinpoint. It's a common approach, but since property ownership is not a standalone qualification for residency, it's not tracked as a separate category.

Thinking of buying real estate in Czechia?

Acquiring property in a different country is a complex task. Don't fall into common traps – grab our guide and make better decisions.

buying property foreigner The Czech Republic

Market data

You can find fresh and updated data in our pack of documents related to the real estate market in Czechia.

If we check the the GDP per capita indicator, it seems that Czech people have become 4.3% richer in the past 5 years.

As people's wealth increases, their interest in real estate also grows, and that can make prices increase down the road.

Looking at the data reported by Numbeo, we can see that rental properties in Czechia offer gross rental yields between 1.6% and 4.3%.

These values for rental yields can be considered as "moderate", which means they fall within a reasonable range and are neither exceptionally high nor exceptionally low.

To know more, you can also read our dedicated article: is it a good time to buy a property in Czechia?

Daily life of an expat

Living as an expat in Czechia can be a rewarding experience.

The country is known for its rich cultural heritage, stunning architecture, and friendly people. It also offers a high quality of life, with affordable housing, excellent healthcare, and a strong infrastructure. Plus, the cost of living is much lower than in many other European countries.

Czechia is also a great place to explore, with plenty of outdoor activities, historical sites, and cultural events. Expats can enjoy the country's vibrant nightlife, with plenty of bars, restaurants, and clubs to choose from. The country also has a great public transportation system, making it easy to get around.

The Czech language can be a challenge for expats, but there are plenty of language learning courses and resources available. Additionally, most people in Czechia speak at least some English, so communication isn't usually an issue.

Overall, life as an expat in Czechia can be a great experience. With its beautiful scenery, vibrant culture, and affordable cost of living, it's an ideal destination for those looking to explore a new country.

What are the best places to purchase a property in Czechia?

This table summarizes some of the best places to buy a property in the Czech Republic.

City / Region Population Average Price per sqm (CZK) Strengths
Prague ≈ 1.3 million 60,000 - 100,000 Capital city, historic architecture, cultural hub, job opportunities
Brno ≈ 380,000 40,000 - 70,000 Second-largest city, vibrant nightlife, universities, technology industry
Ostrava ≈ 290,000 30,000 - 50,000 Industrial center, affordable property prices, cultural events
Plzeň ≈ 170,000 25,000 - 45,000 Beer culture, UNESCO-listed historic center, close to nature
Olomouc ≈ 100,000 20,000 - 40,000 Historic city, vibrant student life, cultural heritage
České Budějovice ≈ 94,000 20,000 - 40,000 Home of Budweiser beer, picturesque city, close to nature
Liberec ≈ 79,000 25,000 - 45,000 Gateway to the Jizera Mountains, winter sports, cultural attractions

Do you need a lawyer to buy a property in Czechia?

When purchasing a property in the Czech Republic, engaging a local lawyer can be crucial in navigating the legal requirements and ensuring a successful transaction.

One important document they can assist with is the Purchase Agreement (Kupní Smlouva), a legally binding contract between the buyer and seller that outlines the terms and conditions of the sale.

The Czech lawyer can also help with conducting a Property Title Search (Výpis Z Katastru Nemovitostí) to verify the property's ownership status and identify any potential legal issues or encumbrances.

Moreover, they can guide you through the process of obtaining necessary permits and approvals, such as approval from the local Land Registry or relevant authorities.

They will ensure that all applicable taxes and fees, such as the Property Transfer Tax and Notary Fees, are paid correctly and in compliance with Czech laws and regulations.

What are the risks when buying real estate in Czechia?

We've got an article dedicated to the risks associated with purchasing property in Czechia.

1. Restitution Claims and Property Title Issues:

The Czech Republic has a history of property restitution claims, particularly related to properties confiscated during the communist era. Buyers should be aware of potential restitution claims and ensure that the property's title is clear and free from any unresolved restitution issues. Engaging a qualified lawyer and conducting thorough due diligence is essential to mitigate these risks.

2. Ownership Restrictions for Non-EU Citizens:

Non-European Union (EU) citizens may face ownership restrictions for certain types of properties, including agricultural land and forest properties. Buyers who are not EU citizens should carefully review the regulations and seek legal advice to understand the limitations and potential requirements for property ownership in the Czech Republic.

3. Protected Areas and Zoning Laws:

The Czech Republic has protected areas, including national parks and cultural heritage sites, where development and construction may be restricted. Buyers should be aware of the zoning laws and regulations in these areas to ensure compliance and avoid potential limitations on property development and alterations.

4. Building Inspections and Quality:

When purchasing property in the Czech Republic, buyers should engage professionals to conduct thorough building inspections to assess the property's structural integrity, construction quality, and compliance with building codes. Identifying any potential issues or defects beforehand can help avoid costly repairs and ensure the property meets the necessary standards.

5. Mortgage Risks and Variable Interest Rates:

When obtaining a mortgage loan in the Czech Republic, buyers should be aware of the potential risks associated with variable interest rates. Fluctuations in interest rates can impact monthly mortgage payments, and buyers should carefully consider their financial capacity to afford potential increases in mortgage costs over the long term.

6. Environmental Contamination:

Buyers should assess the property for potential environmental contamination, especially for properties located in former industrial areas or sites with a history of hazardous activities. Conducting environmental assessments and seeking professional advice can help identify any contamination risks and potential liabilities associated with the property.

7. Property Management and Rental Regulations:

If buyers plan to rent out their property, they should familiarize themselves with the Czech Republic's rental regulations, including tenant rights, lease agreements, and landlord obligations. Understanding the legal requirements and ensuring compliance with rental regulations is important for successful property management and rental income generation.

8. Language and Documentation Challenges:

While English is commonly spoken in larger cities and tourist areas, buyers may encounter language barriers when dealing with local authorities, contractors, or real estate agents in some parts of the Czech Republic. Engaging a local translator or legal professional can help overcome language challenges and ensure clear communication during the property purchase process.

real estate The Czech Republic

Everything you need to know is included in our Czech Republic Property Pack

What are the required documents for a real estate transaction in Czechia?

When buying a property in The Czech Republic, you will need the following documents:

1. Identification documents (passport, ID card or residence permit) for both the buyer and the seller.

2. Proof of address (utility bill, rental agreement, etc.) for both the buyer and the seller.

3. Title deed to the property.

4. Contract of Sale, signed by both parties.

5. Proof of payment of the purchase price.

6. Certificate of Inheritance (if applicable).

7. Zoning Certificate (if applicable).

8. Energy Performance Certificate (if applicable).

We review each of these documents and tell you how to use them in our property pack for Czechia.

What strategies can you employ for successful negotiation with Czech people?

When negotiating the purchase of a property in the Czech Republic, understanding and respecting the specific cultural customs can significantly impact your negotiation success.

Establishing trust and building a personal relationship is crucial in Czech negotiations. Take the time to engage in friendly conversations, show genuine interest in the seller's background, and create a comfortable atmosphere. Czechs value sincerity and transparency, so being authentic and building rapport is essential.

Czech negotiations tend to be more formal and reserved. Maintain a professional demeanor, using polite language and adhering to proper etiquette. Avoid overly aggressive or confrontational tactics, as they may be perceived negatively and hinder the negotiation process.

Punctuality is highly valued in Czech culture. Be on time for meetings and appointments, as it demonstrates respect for the other party's time and shows your commitment to the negotiation process.

When presenting an offer, it is crucial to back it up with thorough research and data. Provide evidence of recent property sales in the area and any other relevant market information. Czechs appreciate well-reasoned and logical arguments, so presenting a strong case for your offer will increase your chances of a successful negotiation.

During negotiations, Czechs tend to be detail-oriented and meticulous. Be prepared to discuss and negotiate specific terms, such as payment schedules, contract conditions, and any other relevant aspects of the property transaction. Paying attention to these details and being prepared for in-depth discussions will demonstrate your seriousness as a buyer.

Engaging a local real estate agent who is familiar with the Czech property market and culture can be invaluable. They can provide guidance on negotiation strategies, navigate any language barriers, and help you understand the local customs and legal requirements.

Are bank loans available to foreign nationals in Czechia?

Yes, foreigners can obtain property loans in the Czech Republic. The Czech banking system allows non-residents to apply for property loans, subject to certain conditions and requirements.

When applying for a property loan in the Czech Republic as a foreigner, you can explore options like the "Mortgage for Young People" program, designed to support individuals under 36 years of age in purchasing their first property with favorable conditions.

Some banks in the Czech Republic that can grant mortgages to foreigners include Česká spořitelna, Komerční banka, and Raiffeisenbank.

Moreover, in The Czech Republic, mortgage rates for a 20-year term range between 4% and 8%, offering borrowers excellent conditions for obtaining housing loans with highly favorable interest rates.

What are the taxes related to a property transaction in Czechia?

Here is a breakdown of taxes related to a property transaction in Czechia.

Tax Description Calculation Who pays
Property Tax Annual tax on the property ownership Varies from CZK2 to CZK10 per square metre, depending on the size and location of the property Owner
Rental Income Tax Tax on rental income generated from the property 15% of the rental value after deducting total costs Owner
Transfer Tax A tax imposed on the transfer of real estate ownership 4% of the property value for individuals and 0.5% for legal entities Buyer
Capital Gains Tax Tax on the profit made from the sale of a property 15% of the capital gain if held for less than five years Seller
Value Added Tax (VAT) Tax on the sale of new properties and some commercial properties 21% of the property value Seller

What fees are involved in a property transaction in Czechia?

Below is a simple breakdown of fees for a property transaction in Czechia.

Fee Description Calculation Who pays
Registration Fee Fee for registering the property transfer with the Land Registry Varies from 0.01% to 0.02% depending on the property value Buyer
Notary Fees Fee for the notary's services in handling the property transfer Around CZK5,000 and varies depending on the notary and property value Seller or Buyer
Real Estate Agent Commission Fee paid to a real estate agent for facilitating the property transaction Typically around 2.5% to 5% of the property sale price Buyer

Buying real estate in Czechia can be risky

An increasing number of foreign investors are showing interest in Czechia. However, 90% of them will make mistakes. Avoid the pitfalls with our comprehensive guide.

buying property foreigner The Czech Republic