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...
Understand the intricacies of property sales tax when selling real estate in the Czech Republic.
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...
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...
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...
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...
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...
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...
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...
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...
If I had to select one area of Prague I love the most, it would have to be Prague – Royal Vineyards, Vinohrady in Czech, or “Královské Vinohrady”. As you might know from the recent article, Vinohrady was rated as one of the coolest areas in the world. Vinohrady has a unique and charming atmosphere and will always maintain its value because of its prestige, history, architecture, and limited areas for new development. In this article, I will cover the history of the villa district spreading from Bezručovy sady all the way down to the borders with Prague 3 and 10. You can look forward to a series of articles about the Vinohrady area, starting today with the history of the villa area and what happened before the first villas even began construction. The Early Years Vinohrady was originally a rural area with vineyards and orchards covering much of the land. The first permanent settlements in the area date back to the 12th century. By the 15th century, it was a thriving agricultural community thanks to an order of Charles the IV which stated that within a 3.5km area from Prague Castle, vineyards shall be planted and wine for the...
For those of you fed up with city life and looking for unique properties further away from town, I’ve found two interesting properties, one of which is a major bargain! First, the bargain: a picturesque neo-renaissance mansion for the price of 2kk in Prague Located in Veliká Ves near Podbořan, this charming Neo-Renaissance mansion is built on 311 m2 with a 700 m2 useable area and is a designated cultural monument. The property has undergone recent renovations to its facade and roof. It offers a ground floor, first floor, and an attic with a rectangular layout, along with an adjacent land measuring 1,490 m2. With its convenient location just 16 km from Žatec and less than 1.5 hours by car to Prague, this property presents a compelling investment opportunity. It’s perfect for hosting weddings or transforming into a hotel with a restaurant if the heritage department allows it. Customer walk-ins might be quite rare though given Veliká Ves has a population of only 313. The property is part of a bigger complex (not part of the purchase), which contains farmland – maybe you could even have fresh milk and eggs every day! This remarkable mansion and the adjoining land...
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