Buying a new property in the Czech Republic
is undoubtedly a good investment. No matter what you do with the place, it will still prove to be both convenient and beneficial. Who knows, you might even profit from it too! But before you enjoy your real estate in the Czech Republic, it's worth noting that the process of buying it can get pretty complicated at times. It's not as simple as paying the seller and getting the keys to your new place. There's more you need to know like if your residency status matters, the important costs, and the importance of signing the contracts, for a start.
The Foreigner's Right to Czech Real Estate
Are foreigners allowed to buy and own property in the Czech Republic? The short answer is yes, they are. But the long answer is that it's more complicated than you might think. To own real estate in the Czech Republic without any restriction, you need to be a citizen
and/or resident of the country or you were granted asylum here. EU citizens who don't have a residence permit, on the other hand, would be restricted from purchasing a property within a 7-year transition period. Though even this rule has become less restrictive in the past few years.
Non-Residents Buying Property in The Czech Republic
But what if you're a non-EU non-resident looking to purchase a property in the Czech Republic? What are the restrictions then? Well, you'll need to meet certain conditions. First, you need a Schengen Visa
, preferably acquired via the Czech Embassy in your country. Then, you will need to remain in the country for at least 7 years to obtain a residence permit. Or another way is to marry a Czech citizen to get a green card. In a nutshell, you will need to apply for residency in order to purchase real estate in the Czech Republic.
Check The Legal Status of The Property
In the process of buying a property in the Czech Republic, there's something called you're 'due diligence
' that you have to do as the buyer. Part of that is checking the current status of the property in the country's land registry, also known as the Real Estate Cadaster. Firstly, you need to make sure that the seller is, in fact, the listed owner of the property and that they have the legal rights to sell it. Secondly, check if it's under a joint or multiple ownership/s involved. It may not affect you now, but this issue may prolong the process if not dealt with at the beginning.
The Important Costs
Most, if not all the properties on the market in the Czech Republic will go for either thousands or millions of bucks. And part of the reason why the final prices are so hefty is that the payment includes all the other important costs too. Some of which you'll need to pay even before you sign any document. There are legal fees for your notary and/or solicitor, the commission you pay your real estate agent
, and the registration fees. Make sure your budget can cover all of these on top of the property value!
Drawing Up The Contracts
Two of the most important documents in this process are the reservation contract and the purchase contract. The former is to help establish you as the one and only buyer of the property while the latter legally transfers the ownership from the seller to you. Both are equally legally binding and you need to pay close attention to each one. The reservation contract should include both parties (with your signatures), the final price, and details about the property. It's better that you include terms that will benefit you on this document too!
When You Sign The Contracts
When you sign the contracts, especially the reservation contract, know that this will legally bind you to the sale. So before you sign it, make sure you've thought about it long and hard. Although the document will help you reserve the property and take it off the market, it will also ensure that you push through with the transaction. Bowing out of the agreement after signing can result in some penalties, including the forfeit of the 10% to 30% deposit that you paid upon signing. And depending on the terms and conditions in the contract, you may even be liable to pay more to the seller as well.
Paying For The Property in Full
After signing the contracts it's time to pay for the property in full. There are two common ways to go about it: in cash or through a loan. If you go for the former, any payment worth above 270,000.00 Kč (€10,000.00) has to be made via bank transfer. And if you go for the latter, your best bet is to get a mortgage loan. But before you do that, you need to make sure that the previous owner's mortgage was already taken out of the property. It'd be best to do this even before you sign any contract.
How Long Will The Process Take?
The length of time it will take for you to buy a property in the Czech Republic depends on various factors. For the most part, it can take as little as 31 days (one month) for the entire process. This includes preparing all the documents, checking the place out, negotiating the final price, signing the contracts, and more. But that's only if you and the seller were already prepared even before the transaction. If not, it can take as long as six months. So it's very important that you come fully prepared when taking on this endeavor.
It's better to know the basics of buying a property in the Czech Republic before you take on this endeavor. The wiser you are at the start of the process, the more smoothly it will go! And before you know it, you're already the owner of fine real estate in this country.