Housing, Visa

Buying a Property in the Czech Republic as a Foreigner – rules and examples

If you are foreigner looking to buy a property (flat, house) in the Czech Republic, this article covers everything you need to know. Starting from the rules about who can actually buy a property in the Czech Republic, how much taxes you have to pay, how long it takes to buy a property here, to if cash or mortgage payment is better for you and what documents are needed.

The article was written by an expert with years of experience in the field sharing his experience from hundreds of cases. Dive in to his knowledge below!

Can foreigners buy a property (flat, house) in Czech republic

The Czech Republic has been a popular country for expats moving to Europe or having to change their country of residence for work related reasons for a long time.

Until a few years ago, there were relatively strict rules for foreigners buying Czech real estate. Even after the Czech Republic joined the European Union, it was not so easy for foreigners to acquire property freely, but nowadays it is the case that foreigners can also acquire property without restrictions.

The conditions are thus the same for domestic, foreign, EU and third country citizens.

Buying a property can though be quite a challenge (from administrative and legal perspective) even for a Czech citizen, speaking Czech. If you are not exactly sure how to navigate the process, it is highly recommended to hire and expert to help you with everything to avoid delays, mistakes and potential loss of money.

The main advantage of working with an expert is that not only they know the processes inside out (i.e. what to focus on, where the most common problems hide etc.) but they usually also have access to other specialist you might need during the process – real estate agents, lawyers, notaries, bankers etc.

If you have any questions you want the expert to answer, fill in the form below and we’ll make sure the question gets to him. The article continues under the form 🙂

Documents needed to buy a property in the Czech Republic as an Expat

In general, a foreigner buying a property needs to provide valid personal documents, a criminal record extract and, if necessary, a power of attorney if someone is be representing them.

Because the purchase of a property can be handled remotely, you do not have to be physically present in the country – we can handle the entire process for you.

The contract of sale must always have the statutory requirements. It is usually written by a lawyer so that it is accepted by the Land Registry, or the bank providing the mortgage, etc. The signatures of the parties must be certified by an authorized body – CzechPoint, relevant embassies, notary public etc.

How long does it take to buy a property in the Czech Republic?

The transfer of ownership itself is not a long process, as it takes approximately one month from the payment of the purchase price, i.e. the purchase of the property, for the transfer of ownership with the Land Registry Office.

The longest time is typically taken by the selection of a suitable property and inspections. Here you need to be aware that many estate agents cannot fully communicate in English, so more complex conversations can be problematic, not to mention that you may be signing a reservation or purchase contract that is not in a language you understand.

Unless you are absolutely sure, it can only be recommended to have a consultant who specializes in foreign clients and can break down the language barrier.

If you have any questions you want the expert to answer, fill in the form below and we’ll make sure the question gets to him. The article continues under the form 🙂

Cash or mortgage – what is better to buy a property in the Czech Republic

When you buy a property, you basically have two main options for paying the purchase price – either you pay cash (which you have in your account) or you use a mortgage.

The question we often see is, which of these two options is better? Is it better to pay for the apartment in cash or get a mortgage?

There is no simple answer to this, as each client has different needs and expectations. However, our experience tells us that in most cases it is mathematically advantageous to use external sources, i.e. a mortgage – even if the client has enough money in cash.

To explain this a bit more, I will use two simple examples. Both represent the two most common types of clients we encounter:

Example 1: I have CZK 5 million in my account and I want to buy a property

This is a very common situation in which two types of people are most often found. Professionals who have been working in the Czech Republic and elsewhere in the world for a long time, have money saved up and want to buy their own home here. The second group are investors who want to buy property to protect their assets and future returns.

There are, as I have already mentioned, two options, and we will look at both:

Cash payment

The investor pays the full purchase price of the property in cash. If he rents the property, he can expect a return of around CZK 20,000 per month, i.e. CZK 240,000 per year (3-5% yield is realistic in Prague). If he lives in the property himself instead, he will save similar amount of money on rent.

What will the situation look like in 20 years?

Looking at it today, we can expect that in another 20 years the property will gradually pay for itself. Thus, the owner will collect around CZK 5,000,000 in net rental income (at today’s prices), plus the property will probably be worth more. BUT, at the beginning he had to invest a large sum of money, which he could not dispose of in any way, and defacto turned it into bricks in the property he bought.

0% mortgage financing

How is this possible at a time when the cost of money in the market is over 5%? A product that many people are not familiar with is called an off-set mortgage.

An off-set mortgage has two parts. The first is the loan itself, which has monthly repayments and an interest rate like a normal mortgage. The second part of the mortgage is a special savings account. This can be used to deposit (or withdraw) any amount of money at any time.

The magic is that the amount that sits in this account reduces the mortgage interest calculation. So the interest is calculated on the difference between the mortgage and the money in the account.


I have a mortgage of CZK 6,000,000 with an interest rate of 5.49%.

I have deposited CZK 5,000,000 in a linked account. The bank does not calculate interest on the deposited funds, so I pay interest only on the difference, i.e. CZK 1,000,000.

If the amount of the loan is the same as the amount of funds saved, then the interest rate may be close to 0% or even below zero.

The huge advantage of this option is that the money is always liquid and ready to use.

Will there be another bargain or will the money need to be used elsewhere? Then it can be withdrawn and used at any time, just like from any other account. Do I need to pay off the mortgage? It is possible to do so, under current legislation, at any time and with minimal fees.

Most advisors and bankers have no idea about this option (also, only a few banks offer it), or cannot calculate and process it properly. This is a shame in our opinion – although it is certainly not a one-size-fits-all solution, there are a number of use-cases where the client can really benefit from it.

Example 2: I have 40% cash and I’m going to take out a mortgage on the other 60%

This example is more common and will probably apply to more of you readers. What would we recommend to such a client?

Again, there is no one-size-fits-all solution. This is because it depends on the amount of additional savings, free cash flow, income stability and many other factors.

However, in most cases, at least in our experience, a higher loan amount works out better. For example, I would say let the client give only 20% of the value of the property and let the mortgage be 80% of the value of the property – to work in absolute numbers, let’s say the client has CZK 2 million saved and the property is worth CZK 5 million.

Rather than get rid of most of the savings, we recommend that the client take out a mortgage of 4 million and use 1 million of their own funds – I would use the remaining 1 million as a financial reserve in case the household runs into financial problems, typically job loss, a sudden life event, etc.

If the reserve and other short-term goals are already resolved, then one can move on to planning for long-term financial goals, and possibly even consider investing.

For inspiration, a well-crafted global investment strategy is capable of returns of 5-6% p.a. above average inflation. Over 20 years, the 1 million saved can appreciate to around 3 million (adjusted for inflation), from which a lifetime annuity of around CZK 12,000 can be drawn.

As you can see, it is not always necessarily better to use your own money. In fact, in economics, it is often the case that foreign capital is cheaper than your own. If you are buying a rental property, this rule almost always applies, because we use the principle of leverage, but that’s for another article.

However, it is important to add that the above procedures are definitely not suitable for everyone, as we all have different financial conditions, goals, plans and attitudes.

And, as at the beginning of this article, I will allow myself one piece of advice in conclusion – if you are not absolutely sure that you have all the information and are making the right decision, do not hesitate to consult a professional. For life decisions, which buying property can be, it makes sense.

If you have any questions you want the expert to answer, fill in the form below and we’ll make sure the question gets to him. The article continues under the form 🙂

How much tax you have to pay if you buy a property in the Czech Republic

When buying a property until 2020, the so-called property acquisition tax was applicable – the rate of this tax was 4% of the property price.

Today there is no such tax and only an annual property tax is paid, which usually amounts to a few thousand crowns. The Czech Republic has one of the lowest property taxes in Europe, which is an attractive parameter for investors.

Anti-Money Laundering system when buying a property in Czech Republic

During the purchase of a property, you may encounter screening in terms of Anti-Money Laundering Measures – the law obliges real estate, law and notary offices to screen participants in real estate transactions.

Typically, the participants are identified and the origin of the money may also be investigated to see if it does not come from criminal activity.

Payment in cash is not possible for these reasons.

These measures are regulated by Czech Law 235/2008, also known as the AML Law.

Do you have any questions regarding buying a property in the Czech Republic? Fill in one of the forms on this page and we’ll forward your questions directly to the expert we work with to get your questions answered by a professional.

Team of Move To Prague relocation services 🙂

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