Buying property in the Czech Republic

A Guide for Non-Czech, EU Citizens.

Since 1 May 2004, foreigners to the Czech Republic are still unable to buy property in the Czech Republic free from restriction. Although the EU principal of "free movement of capital" changes the rules to some extent, many of the restrictions present pre EU-accession, remain in place.

POST EU-ACCESSION

Legal Requirements

Since the 1st May 2004 foreigners have witness an extension to their rights to acquire property in the Czech Republic, coupled with the retention of many of the restrictions in place pre-accession.

On 1 May, a Czech Parliamentary bill amending the Foreign Exchange Act to comply with the EU accession treaty came into force. however citizens and residents of EU member states will now be able to acquire real estate on the condition of holding a residence permit in the Czech Republic . Additionally, EU nationals are still prevented form acquiring agricultural or forest land and land used for recreational purposes.

Groups Remaining Restricted from Purchasing

In the wake of EU-accession, those groups that are still restricted from acquiring real estate in the Czech Republic, (unless one of the conditions at point 2.2 above apply,) are as follows:

+ Corporations with no business presence in the Czech Republic

+ EU nationals not granted a Czech Residence Permit

Non-EU nationals.

Transitional Periods

The accession treaty allows the Czech Republic maximum periods after accession in which to apply restrictions on the acquisition of certain types of property. These are as follows:

+ 5 years since 2004 for the acquisition of a secondary residence

+ 7 years since 2004 for the acquisition of agricultural / forest land

It should be noted that the Czech government is also still debating some changes that may be introduced, for instance, it is not yet clear what the term "secondary residence" means in this context. As a consequence, foreign buyers should try to keep updated with the latest position on their rights.

ACOL - 1 July 2004

For further information please contact Hilary McDowell on +420 221 098 888 or at hilary.mcdowell@cms-cmck.com