Buying property in a foreign city like Prague can be a bit confusing, especially if it´s in a different language and culture. Even if you happen to speak the country´s language, it still can be a daunting and frustrating task to purchase property unless you´re aware of the specific regulations and nuances of the real estate market.
To make the process easier and to help with any real estate questions you might have about the Prague market, we´ve listed some of the main points that you´ll need to be aware of before purchasing property in the historical city of Prague.
Real estate taxes
Prague real estate taxes Like any country, the Czech Republic has its own specific real estate tax regulations. It´s vital that you´re familiar with these specifics before you jump into a transaction. Here are some specifics:
Property transfer tax is paid by the seller, and amounts to 3 % of the sales price. When buying a property through a limited company, you don´t have to pay VAT on capital gains. The tax on capital gains is 26 %. Depending upon your country of origin, there might be or may not be double taxation (i.e. U.K. residents are not taxed twice).
Purchasing Czech property In order to purchase property in Prague (or anywhere in the Czech Republic), you must either have a long-term resident visa of at least five years or open up a limited liability company. Otherwise, you´ll be wasting your time and energy with the Prague real estate market.
Paying the fee
Agent fees Similar to any service received, the real estate agent receives a fee for services rendered. That fee is anywhere from 2% to 5% and is paid by the seller. Since you don´t have to pay the fee as the buyer, it´s highly recommended that you find a reliable real estate agent who speaks Czech (and your mother tongue) and knows the different real estate regulations, etc.
That way they can also navigate the bureaucracy so that you that your real estate deal closes in a timely manner. Going it alone is not a good solution unless you´re thoroughly familiar with the country´s real estate intricacies, and fluent in Czech.
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