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On the net you will find numerous articles on the process of buying property in the Czech Republic. It is our opinion the majority are woefully out of date and misleading
If you are purchasing property for either residential or business we recommend setting up a Czech Limited Liability Company (SRO) and purchase through that company. When purchasing residential and business assets set up individual SROs , an SRO purchase provides maximum protection against the vagaries of law.
For property purchase Czech law recognises three types of citizen which are EU, Favoured Nation and Non EU / Non Favoured Citizens.
Non EU / Non Favoured Citizens are required to set up an SRO in their name. Permanent Residence holders married to a Czech spouse are exempt from this requirement but an SRO is recommended. The SRO assists with legal compliance issues and protects your assets from litigation and fraud.
Favoured Nation Citizens have similar rights to those of the EU and include the countries Lichenstein, Norway, Switzerland and the USA.
A USA citizen who has held a residence permit for longer than three months can buy property as an individual. To purchase agricultural land they must have a registered agricultural business in the Czech Republic.The rights of favoured nation citizens do vary and due diligence is required.
EU Citizens may purchase property as an individual after acquiring a residence permit. Agricultural and forestry land are the exception. Through an SRO there are no restrictions to land purchase.
Although we recommend an SRO purchase there are distinct disadvantages / advantages to both methods.
An SRO is liable to capital gains tax of 24% whereas the individual holding a non primary residence for 5 years or more has zero capital gains.
An SRO has the additional costs of accounting and rates maybe higher for utilities.The current cost of providing and submitting accounts approximates to 10,000CZK / year.
An SRO is easier to acquire than a Czech residence permit. SRO ownership is afforded to any individual over 18 years without a criminal record and of good financial history.
For a Residence Permit the individual needs a valid reason to stay through work or full time study and an accomodation address for which permission has been granted.
The Residence Permit can become problematic for those not living in the country at the time of purchasing the property.
If you wish further advice then please contact us …
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