Real Estate

Real Estate Agency Commission in Czechia: How Much Is It, Who Pays It, and What It Includes

In this article, I‘ll introduce you to the topic of commissions so that you have all the information you need when dealing with a Czech real estate agency. I’ll guide you through what the normal amount of commission is in the Czech Republic, what it includes, and to who and when you need to pay it. The commission charged by Czech real estate agencies and agents varies, and it is usually influenced by factors such as the property’s value and the confidence of the agency or agent. Typically, there’s a standard commission that’s considered reasonable. Along with the basic percentage, it’s important to account for the statutory VAT at 21%, which is added to the commission. So, if the commission stands at 3% + VAT, the overall commission totals to 3.63%, with 0.63% being the VAT portion. Here’s what you can generally expect in terms of commission amounts: •  Typically, for real estate valued between CZK 3,500,000 and CZK 15,000,000, the commission ranges from 3% + VAT to 5% + VAT. •  Regarding properties priced between CZK 2,000,000 and CZK 3,500,000, the usual commission is from 4% + VAT to 5% + VAT. •  For real estate valued between CZK...

 by Daniel Kotula Jan 11, 2024

Mortgage Market Picking Up, Another Round of Deregulation by ČNB

Almost two years ago, the Czech National Bank (CNB) introduced three regulating parameters to limit how much the banks could lend customers (DSTI, DTI and LTV), which essentially considered personal debt and income against the mortgage value. This, along with increased mortgage rates, really slowed down the amount of mortgages taken out recently. At one point last year, the amount of new mortgages were down 80% year-on-year, more on this below! Now the CNB is removing the second regulation, DTI, or debt-to-income, on the banks meaning they could lend even more money to customers. In all, I think it’s fair to say the mortgage market has gone through some crazy development. To describe how low the mortgage market was a year ago, if we look at November 2022, 84% less mortgages were approved than November 2021. Minus 80% on production, that is quite something! Can you imagine your business revenues would go down this much? Banks were not having the “easy” times back then – but who would pity the banks, right? However, if we now compare November 2023 with November 2022, there is an increase of mortgages approved. More than +120% in fact! How is that possible? Source: www.gpf.cz/hypotecni-uvery-prosinec-2023...

 by Robin Petrasek Jan 09, 2024

Mortgage Miracles for Christmas

To close up on the year, I would like to share a few exceptional expat mortgage case examples that might seem impossible to get approved, yet actually were. Less than 6 months in the Czech Republic and 100% financing! For the first story, we have to travel back in time to 2015 when a couple from another EU country decided to move to the Czech Republic in the middle of the year. Soon after, they heard that 100% financing was possible. They were looking to purchase a family house in Kralupy and boy did they get a good deal! For less than 3.5m CZK, with no down payment, and after just a few months in their new jobs in Prague, they got everything paid by the bank… Sigh… Good ol’ times. For those of you perhaps new to the mortgage market in the Czech Republic, though this couple was able to get 100% financing, it is not possible now. Currently, it’s capped at 90%. Business owner with minimum income, yet a 10m CZK mortgage was easy. Being a business owner is challenging and rewarding at the same time. The challenge comes from financing, as very often company owners pay themselves...

 by Robin Petrasek Dec 28, 2023

Sales Tax on Real Estate in the Czech Republic

Understand the intricacies of property sales tax when selling real estate in the Czech Republic.

 by Daniel Kotula Dec 20, 2023

Seven Crucial Things to Check on Your Mortgage

About 50% of property purchases are made with the help of a mortgage, despite relatively high-interest rates of around 5.5%. However, just because a bank has agreed to give you the mortgage, doesn’t mean it’s all smooth sailing from there. When you have financing from a bank, once the mortgage is approved, you should make sure you completely understand the mortgage contract so as to avoid any potential issues. Because I have been helping foreigners with their mortgages for the last 10 years, I would like to share a few tips on what to watch out for, BEFORE the mortgage is signed. Drawdown conditions Once the mortgage is approved, the bank will set a list of about 5-10 conditions you still need to meet after signing the mortgage and before it actually sends the money. These lists typically consist of: Deliver the bank-signed pledge contract (with verified signatures) for the property to the land registry Deliver the bank-signed purchase and escrow contracts Prove that you paid the down payments from your own finances, not from another loan Take out insurance for the property and show the confirmed payment If the seller has a mortgage on the property, get confirmation from...

 by Robin Petrasek Dec 17, 2023

How to Successfully Search for Real Estate on the Internet in Czechia

This article covers the most effective ways to search for properties to buy in the Czech Republic on the Internet. Most readers will be familiar with the feeling of fatigue and frustration from long hours of often unsuccessful internet surfing. If you follow the procedures below, you may not experience this feeling quite so strongly (I won’t give you a guarantee that you won’t experience it at all, I would say that it just comes with the search). A prerequisite for success is that we have a realistic idea of what we are looking for and for how much. If you don’t, then even the process below won’t help you. In the Czech real estate market, you basically have only two ways of searching. The first one is picking up on all the tempting news. The second way is to work with the so-called lagers. In the first way, we have to be quick, and sometimes we have to take no prisoners; in theysecond way, we have to be patient and be good negotiators. Picking up the news Set up a watchdog on the portals below and keep an eye on 99% of new offers on the internet. The watchdog is...

 by Daniel Kotula Dec 11, 2023

New Rules on Early Repayments of Mortgages From January

Did you know that you can break your mortgage fixation, sell your property, and refinance anytime, even if you fixed with the bank for three, five, or eight years or so? The bank must allow you to close the mortgage prematurely… for a cost. And there is a big change from January. Let us start from the beginning. What is fixation: When you take your mortgage for let’s say 20 or 30 years, the interest rate will not stay the same for the whole time. When taking out the mortgage, you choose a “fixation period”, which means that for the next X amount of years, the rate will be fixed at for example 5.39%, which is the best rate we can get today (end of November 2023). With this in mind, you might be tempted to go for a shorter fixation and hope the rates go down. But, if you can refinance anytime anyway, why not choose 10 years and simply break the fixation whenever it suits you? How much did it to break fixation? Depending on when you signed your mortgage or renewed your fixation period (which, for the sake of working out these costs, is considered a reset...

 by Robin Petrasek Dec 03, 2023

KKCG Real Estate Group Unveils Extensive Development Plans

KKCG Real Estate Group shared the successful sales results of the second phase of family houses and villas at the POMEZÍ residence in Košíře, Prague. KKCG REG started the construction in November 2018 at the foothills of Stolové Hory Vidoule in Košíře. The first phase, completed in 2021, included 90 premium apartments across four residential buildings. The ongoing second phase, which started in May 2019, comprises 38 family houses, four apartment buildings with 148 units, and five standalone villas. The 3.7-hectare sloping plot was creatively designed with a mix of apartment buildings, family houses, and villas to ensure privacy and scenic views for all residents. Otto Koval, Executive Director of KKCG Development, attributed the project’s success to its premium location next to the Košíře-Motol nature park, unique urban design, and personalized client approach. The entire Top’rezidence POMEZÍ, covering 3.7 hectares, is set to be completed in the summer of 2024, offering amenities such as relaxation areas, retention ponds, community spaces, and sports facilities. Currently available for sale are the last three row houses (4+kk) and one standalone villa with a 400m2 floor area.   The successful approval of 60 apartments and the initial groups of family houses from the second...

 by Prague Morning Nov 30, 2023

TOP 3 Mistakes Made When Buying a Property in Czechia

Buying a property in another country is simply not as easy as ordering food delivery through a phone app. That is a fact. The Czech Republic might not be the simplest when it comes to bureaucracy, language, and banking so today I want to share the three biggest mistakes I see expats (but also Czechs) make when buying a property, so you do not have to go through the same again! Oh – and one really, really bad idea to end with, something you should NEVER EVER do… Mistake Number 1: Not using a lawyer when buying a property. This is something I cannot get my head around and usually Czechs are worse at this than expats. The story goes like: “No, why should I need the lawyer, I think the contract looks OK. I asked my friend who works in…” I am not speaking just of purchase contracts either, but even the first reservation contract, which you sign when you want to take the property off the market. Recently I heard a story “I need a lawyer, I signed a contract and now there is a problem since the seller is doing XYZ”. Better late than never, however, if...

 by Robin Petrasek Nov 29, 2023

Understanding Prague’s Growth Through a Residential Developer

With Prague’s population expected to grow fundamentally over the next 25 years, the municipality continues to cooperate with residential developers in order to prepare for the new wave of residents looking to relocate to Czechia’s thriving capital city. For developers such as Horizon Holding it is essential to plan out neighborhoods and develop new ways for Prague to improve in terms of living quality that will attract new residents. Active in the Czech market for over twenty years, Horizon has completed several residential projects in Prague and its suburbs, including quarters such as Modřany, Karlín, Čimice, and others. As of today, the developer completed apartments for over 1,500 families and is about to start new projects that will bring thousands of new apartments to the market. “We are not necessarily attached to one location or one quarter, but we choose what we believe to be an interesting project meeting our standards, preferably of bigger scale with over 100 apartments,” said Yishay Furman, CEO of Horizon Holding. “We prefer projects that can be phased, to start with 100 units, then we gradually expand further the neighbourhood with retail units, build parks that include playgrounds, resting areas and also art, as you...

 by Jakob Weizman Nov 23, 2023

Czech Republic: Tax Heaven for Property Investors

Did you know that the Czech Republic is one of the most favorable countries to invest in when it comes to taxation? Preceded only by Luxemburg or Switzerland, the Czech Republic offers perks such as no acquisition tax, tax benefits for residents, favourable deductions for rental income, and even no tax to pay on profit if you own the property long enough. One of the most positive parts when it comes to property investments is actually the tax systems. Yes, I do mean positive… I am not mistaken. Speaking to foreigners from all around the world, I often get surprised looks when I explain there are almost no taxes to keep in mind when buying a property here. If we compare to other acquisition costs like solicitor fees in the UK or annual property taxes in the US, here we have really nothing to complain about. Let’s take it step by step: Before 2020, there was a 4% acquisition tax paid to the country’s financial office and which was an obstacle to purchasing property for many people. Luckily this requirement was removed during the Covid pandemic so now you do not need to think of extra 4% to pay from...

 by Robin Petrasek Nov 19, 2023

New Bank on the Czech Scene: Partners Bank Ready for Launch in March

A new bank is in the final stages of preparation before going live, and it could soon be offering mortgages. Partners Bank received its license from the Czech National Bank in August, and its backers expect to launch publicly in March. Initially, it will offer the basic services of payments, but within a year, it expects to be able to offer mortgages and loans too. Within ten years, they hope to have half a million clients. In a statement, the Director of the Partners Financial Group, Petr Borkovec, said the aim is to offer clients a complete financial service. “We see the launch of the bank as entering a new financial league. We will offer our clients a perfect financial service. Thanks to licenses, data, and technology, it will connect their entire financial life in one app, which will give them full and immediate control over their finances, enable them to live a healthy financial life, and ensure the growth of their wealth.” The Partners Group has operated in the Czech financial advisory space for 15 years. According to seznamzpravy.cz, Partners’ app allows clients to choose advisory services already. Later, it will be expanded to include all the banking services...

 by Robin Petrasek Nov 12, 2023