Czech Republic
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Capital: Prague
Official: Czech
Copyright Law Department Ministry of Culture
Mr. Pavel Zeman
Director
Email: pavel.zeman@mkcr.cz
Telephone: (420) 224 312 785 / 257 085 358 Director
(420) 257 085 355
Website: https://www.mkcr.cz/autorske-pravo-15.html
Address: Milady Horákové 139 160 41 Praha
Before deciding to sell your property you should consider the following matters which can really affect the amount of return you would get from your property.
- Mortgage payout options.
- Many sellers don’t realize that Czech banks have very high penalties (up to 25% of the unpaid amount of the mortgage) if you try to payout the mortgage at a time other than when the fixation comes up for renewal.
- SRO tax strategies.
- Many properties were purchased by foreigners at a time when it was required to have a SRO or Czech company. However, taxation under an SRO can be much less favorable than as a physical person. There are options involving moving the property to personal ownership before its sale that can prove advantageous for the seller.
- Property tax
- Real estate transfer tax
- Income tax
- Value added tax (VAT)
- The only tax concerning the buyer
- Once a property is purchased a yearly property and land tax has to be paid. In general the amounts are minimal and depend on the location and the size of the property. For example an apartment of the size 100 m² in the centre of Prague will be taxed at approx. 1 000 CZK / € 40 a year
- Transfer tax rate is 4 % of the purchase price or of the value as determined by a certified surveyor at the moment of its acquisition, whichever is higher
- The tax is payable when a property is sold and transfer of ownership takes place
- The taxpayer is the seller and the buyer is considered to be a guarantor of the tax. As a result, the buyer frequently insures this obligation of the seller in the contract. Alternatively, an amount corresponding to the value of the property transfer tax may be deposited with the notary
- Tax exemption – the first transfer of ownership of a newly-built (unused prior to the transfer) building or flat between a person or entity conducting business in the building industry or a municipality and the purchaser
- Gains on the sale of property in the Czech Republic are generally included in the computation for the aggregate taxable income. Capital gains are generally computed as selling price less acquisition costs
- Standard income tax rate:
- For natural persons: 15% of the tax base (for individual citizens of the Czech Republic, EU citizens and foreigners with long term residency)
- For legal entities: 19% of the tax base
- Tax base is the actual purchase price of the property (less acquisition costs)
- Tax exemption includes houses or apartments in the case where the seller:
- Lived in the property immediately before the sale and used the proceeds to buy a new apartment by the end of the following year, or
- Lived in the property immediately before the sale for at least 2 years, or
- Did not live in the property, but owned it for more than five years (applies also to other property assets)
- If the seller is a VAT payer, then a reduced VAT rate of 15 % will be applied on the transfer of an apartment up to 120 m2 and for a house up to 350 m² of total floor area. The transfer of other properties or of land plots is taxable at the standard rate of VAT 21 %.
- The sale of buildings, apartments and non-residential premises is exempt from VAT in the case that the transfer is made after three years from the acquisition of property or from its acceptance
- If the above condition is not met, the standard rate of VAT 21 % will be applied on the transfer of a residential building, house or apartment, with the exception of properties for social housing
including purchase agreement, preparation of ownership registration at the Cadastre Office (Property Register Office), verification of signatures on the purchase agreement: 5 900 CZK / 240 €
Price for appraisal carried out by a certified surveyor depends on the type of property and the difficulty of the appraisal. On average, prices range as follows: – Apartment: from 2 000 CZK to 4 000 CZK / from € 80 to € 160 – House: from 4 000 CZK to 7 000 CZK / from € 160 to € 280 – Land: from 1 500 CZK to 3 000 CZK / from € 60 to € 120
Application for ownership registration submitted by the parties together or individually, according to the agreement: 1 000 CZK / € 40
Refers to the deposit of the purchase price of the property until the transfer of ownership at the Cadastre Office has taken place. The Notarial Deposit is protected by the state. Fees are derived from standard table values (e.g. for a property with a value of CZK 10 million / € 400k the fee is approx. 23 600 CZK / € 950)
As the same purpose as the Notarial Deposit but is made with an appointed legal firm rather than a notary and is generally cheaper, although it is not protected by the state. The parties should decide jointly whether they wish to opt for a Notarial or a Lawyer Deposit.
Taking out a mortgage from a Czech bank comes with good news and bad news. The good news is that the big banks (ČSOB, Česká spořitelna, Komerční banka, UniCredit) sometimes offer Czech nationals a mortgage of 100% of the apartment's estimated value. Estimated is the key word. The property's value will be estimated by the bank, so that it oculd be that you won't receive the full sum the buyer is asking for. On the other hand, the mortgage can be used for other things such as renovation or furniture.
On the question of whether a foreigner entitled to a mortgage, the answer is – it depends on the bank. The Česká Spořitelna bank states that it is necessary for a candidate to have permanent or temporary citizenship. By comparison, the ČSOB bank says that a giving a mortgage to foreigners will be examined on an individual basis for every candidate. The Raiffeisenbank on the other hand will give 90% of the property's value but only to candidates who have been living in the Czech Republic for more than two years. A condition of receiving any mortgage is proof of a steady source of income. This can be achieved among other ways by means of setting up a company in the Czech Republic in your name.
source: https://www.google.com.ph/url?sa=i&source=images&cd=&cad=rja&uact=8&ved=2ahUKEwiWs5eti-XeAhUQuRoKHQydCb4QjRx6BAgBEAU&url=https%3A%2F%2Fwww.bakermckenzie.com%2Fen%2Flocations%2Femea%2Fczech-republic&psig=AOvVaw2fAMYFoUJqO0n4jfr0u3_k&ust=1542876051630283