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Czech real estate law

rutland ježek, Czech law firm on the real estate law in the Czech Republic
 
  1. Czech law does not contain any provisions limiting foreigners in the possibility to purchase real estate in the Czech Republic. Therefore, the foreigners are allowed to obtain real estate in the Czech Republic under same conditions as the citizens/residents of the Czech Republic, including the possibility to obtain mortgage at a bank.

  2. The transfer of the real estate must be recorded in the Cadastral Register to become valid and effective. The process of the registration takes at least 20 days due to the fact that the Cadastral Office has to notify the owner of the real estate about the transfer and the owner is allowed to send his objections in the 20-day period in case the transfer is fraudulent.

  3. The fact that someone is registered as an owner of real estate in the Cadastral Register does not mean that he has to be actually the owner. If you plan to buy real estate in the Czech Republic, it is advisable to always consult with a lawyer who can make sure that the ownership of the real estate recorded in the Cadastral Register is true and valid.

  4. The real estate can be encumbered by certain pledges and/or easements, which affect the value of the real estate. The most of these encumbrances are recorded in the Cadastral Register and, therefore, the Cadastral Register must be thoroughly examined before purchasing real estate in the Czech Republic.

  5. In case a purchaser obtains real estate encumbered by a pledge, it is presumed that he becomes automatically a debtor of the loan secured by such pledge, unless agreed otherwise between the parties. Always be very cautious when purchasing real estate with a pledge!

  6. The purchase price for the real estate is usually paid through an escrow account held by a notary public, an attorney or a bank, and is released to the seller only once the transfer is registered in the Cadastral Register. Such procedure is always advisable to offer security both to the seller and the purchaser.

  7. Almost all transfers of real estate are subject to the real estate transfer tax amounting to 4 % of the purchase price of the real estate (or the value of the real estate in case the purchase price of the real estate is too low). The purchaser and the seller can decide who shall pay the tax.

  8. The foreigners are also allowed to enter into lease agreements regarding any type of real estate (e.g. flat or business premises) in the Czech Republic. Although since January 1, 2014 the lease agreement does not have to be concluded in writing, we recommend always entering into written lease agreements to avoid future disputes and having such lease agreement checked by a Czech lawyer.
 
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DISCLAIMER

Please note that the list of legal matters stipulated in this section cannot be considered and exhaustive and comprehensive list of all issues arising under Czech law, further is not a legal opinion or advice in any manner, and only expresses view of rutland ježek, law firm on certain specific issues of Czech law.