Do you need to make a good investment? Consider buying a
property in the Czech Republic! The country is a largely popular tourist destination and has a fairly stable economy. There are lots of benefits to getting your own place here. But with that said, the process of purchasing real estate in the Czech Republic is a lot more complicated than you might realize. There are costs you need to pay, documents you need to gather, contracts you need to sign, and of course, there's negotiating for the final property price too. Let this guide show you the basics of buying a property in the Czech Republic
Can a Non-Resident Buy A Property in The Czech Republic?
Unlike most countries in the
Schengen area, the Czech Republic doesn't allow just anyone to purchase real estate. Although foreigners are allowed to buy property here, it's only when they've become residents. Or if they've been granted asylum here. In most cases, a residency permit is required to complete the process, even for those who come from fellow EU member-states. And they still have to wait for a 7-year transitional period on top of that. For the most part, it's most difficult to get a mortgage in the Czech Republic if you're a non-resident.
What Should You Look For in a Property?
When purchasing real estate in the Czech Republic—or anywhere else, for that matter!—there's
a lot you need to look for. Firstly, check out the location. It's probably the reason why you have your eye on the property in the first place. But do take note of the nearby facilities. For example, if the place doesn't come with its own laundry room/area, check if there's a laundromat nearby. You'll also have to check its layout and if it's to your liking. Moreover, if you're moving in with a toddler, is the property babyproof? You need to consider these things before deciding to buy the place.
What Are The Costs of Buying Property?
Buying a property in the Czech Republic comes with a few important costs. There are the notary fees, for instance, which you pay for all the administrative work that your notary will do. If you hired a
real estate agent to help you with the purchase, you'll also have to pay their commission. And when you apply for a mortgage, some financial institutions will require a valuation of the property before they lend you the loan. You'll need to pay for these services too. And, of course, there's the final price of the property.
How Do You Make an Offer to Buy Property in The Czech Republic?
Speaking of valuations, this is a more vital part of the process than you think. In a nutshell, a valuation will determine just how much a property in the Czech Republic is truly worth. More often than not, this is how sellers reach their initial price when they put the real estate on the market. And when you approach them with the intent of purchasing it, you'd do well to offer up a figure that's near the result of the valuation. Any price that's a lot lower or higher will not be accepted.
How Do You Get Mortgage in The Czech Republic?
As already mentioned,
getting a mortgage in the Czech Republic is a lot easier if you're already a resident. The process remains the same—apply for a mortgage, submit the important documents, and then wait for the approval. However, it's also important to note that your country of origin may matter too. Many mortgage lenders categorize other countries as low, mid, and high-risk nations. And your chances of getting that mortgage will depend on where your country falls under. The low-risk nations include those within the Schengen Area and the European Economic Area (EEA). The mid-risk countries are the powerhouse nations outside of the EU like the US, Canada, Australia, Japan, etc. While the rest of the countries in Asia, Africa, and the Middle East all fall under the high-risk category.
How Do You Set Up the Sale & Purchase Contract?
Once you're 100% sure that you want to purchase a property in the Czech Republic, have your notary draw up a sale & purchase contract. Or more commonly known here as the reservation contract. Just as its name says, this document '
reserves' the place for you until you're more prepared to finance the entire purchase. It will legally bind you and the seller to the sale. For your part, you have to pay a deposit of around 10% to 30% of the final property price upon signing. And for the seller's part, they will have to take the property off the market so that no other potential buyers can approach them about it.
What Are The Different Types of Ownership Structures in The Czech Republic?
Here in the Czech Republic, there are four ownership structures when it comes to real estate. The first is the right of ownership, which gives full power and usage to the listed legal owner of the property. Secondly, there's the right to easement, a structure that allows a different person to use the property for a period of time even when it's owned by another. The third is the right to possession, a unique situation wherein someone can regard property as their own even when their name is not on the title deed. And finally, there's the right to construction, which allows one to build a structure on the property.
What Are The Legal Issues in Buying Properties in The Czech Republic?
There are
many legal issues that come with purchasing real estate in the Czech Republic. One of the most important ones is dealing with the country's Real Estate Cadastre. As the buyer, it's part of your '
due diligence' to make sure that the seller is, in fact, the listed owner of the property. If not, then your purchase will be null and void. You also have to be careful when signing the reservation contract. Unless you set specific terms and conditions, you won't be allowed to bow out of the agreement after signing it. If you do, you won't ever see the 10% to 30% deposit that you paid.
How Long is The Process of Buying Property in The Czech Republic?
The length of time it will take for you to purchase real estate in the Czech Republic will depend on various factors. Normally, the process takes around two to three months. If you're lucky, it can take only about a month and a half. But if you're not, it can easily take up the entire half of the year. But what can prolong the process to this extent? More often than not, it's the paperwork. Whether it's you or the seller, gathering up important documents, especially those coming from government offices, can take a lot of time.
How Do You Search Properties For Sale in The Czech Republic?
Now that you already know the gist of buying a property in the Czech Republic, it's time to finally look for one. And the best way to do that is to visit the
top property listing websites in the country. They're your best bet, especially if you're not in the Czech Republic yourself. A good one is
Sreality, which offers up around 78, 092 available properties and counting.
Ceskereality, on the other hand, lists down various types of real estate that are currently on the market. Apart from residential properties like houses and apartments, they also offer office spaces, empty lots, and the like.
What are The Best Tips for Buying Property in The Czech Republic?
Let's end this real estate guide with
a few helpful tips. First things first, you need to free up some time. As already mentioned, the process can easily take as long as six months. You'll fare better if you have enough time if ever that were to happen. Secondly, it will really help if you learn some Czech. Compared to other EU countries, the Czech Republic is a lot more guarded when it comes to foreigners purchasing their real estate. They'll be more comfortable—and likely more accommodating—if the buyer knows how to speak their language.
If you ever want to buy a new property in the Czech Republic, know that there's a lot you need to know and do. Especially if it's your first time doing it. Don't worry! This real estate guide can help you every step of the way.
