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REAL ESTATE BUYER's GUIDE:

Successfully Shopping for Real Estate in the Czech Republic

Overview

Since gaining its independent, the Czech Republic has experienced a boom in the number of foreign investors who have become active in the real estate market in that country. More and more foreign nationals -- primarily from the EU but also from many other nations around the world -- are becoming involved in the real estate market in the Czech Republic.

Literally thousands of foreign nationals have invested in commercial real estate in the Czech Republic. The government of the Czech Republic has worked to liberalize and streamline the laws in the Czech Republic that deal with foreign ownership of real estate. While there remain some hurdles to foreign ownership of real estate in the Czech Republic, particularly for foreign nationals from non-EU countries, these hurdles hardly are insurmountable today. In addition, there are proposals in the works that will remove many of the barriers and hurdles to foreign ownership of real estate in the Czech Republic within the coming decade. But, again and with that said, any of the hurdles that remain in place today are far from insurmountable.

Investment Real Estate

As has been referenced, since the entry of the Czech Republic, there has been a surge in the number of foreign nationals who have taken to investing in real estate in the Czech Republic. Many of these foreign nationals have tried to take advantage of the economic growth that has been experienced in the Czech Republic in recent years by investing in and by purchasing commercial real estate in that country.

Investment in real estate is occurring not only in the more urban, commercial centers in the Czech Republic but also in some more rural areas of the country as well. The government of the Czech Republic has been intent on decentralizing commercial and industrial interests in the country to help boost the economic prospects and wellbeing in all parts of the country. Thus, many foreign nationals are investing in real estate in what otherwise might be considered remote regions of the nation.

Residential Real Estate - Single Family Dwellings

Within the Czech Republic are many graceful estates with long histories. In recent years, many of these large residences have been put on the market for sale. Many foreign nationals have taken an interest in buying these properties for two reasons. First, these foreign investors have taken to purchasing these properties for use as their own second or holiday residences.

In addition to buying these properties for their personal uses, some foreign nationals are also buying these properties to convert them into inns or bed and breakfasts that are being used in the ever growing tourist trade in the Czech Republic.

Residential Real Estate - Apartments

For many years, apartments have been the primary residences for many people who reside in some of the more major urban areas in the Czech Republic. This trend has not changed significantly in recent years.

Since the entry of the Czech Republic into the European Union, more and more foreign nationals have been spending extended periods of time in the Czech Republic for business purposes. In this regard, many foreign nationals have taken to purchasing apartments in the major urban and commercial centers in the Czech Republic for their own residential purposes while they are in the Czech Republic on business.

A growing number of foreign nationals -- from the EU and from other nations the world over -- are buying apartment units and buildings for investment purposes. These people are in turn renting these units to other people, generally foreign nationals who are in the country for business purposes. Industry analysts maintain that this trend is likely to continue well into the next decade as more and more foreign nationals are spending time in the country for business purposes and reasons.

Vacation Real Estate

Many people who are interested in investing in real estate in the international market are surprised to learn that the vacation real estate market in the Czech Republic is doing booming business in the 21st century. In the past decade, the Czech Republic has become a major stomping and stopping ground for tourists from across Europe and, indeed, from many other countries from around the world.

With the increase in tourism in the Czech Republic since the country gained its independence, there has been a similar increase in the development and remodeling of different properties that are being used by tourists and visitors to the country. For example, a significant number of apartment developments have been constructed with the goal of providing living space to men and women who intend to visit the Czech Republic for extended stays.

In addition to apartments, other vacation properties including hotels and stand alone single family residences are being developed, constructed and remodeled to provide living space for people who are interested in traveling to the Czech Republic for holiday purposes. Foreign nationals are highly involved in this type of real estate development.

Successfully Purchasing Real Estate in the Czech Republic

Specific Steps to Buying Real Property in the Czech Republic

Overall, the process of purchasing real estate in the Czech Republic by a foreign national is a rather simplistic process. There are some additional requirements imposed upon a foreign national when it comes to the purchase of real estate in the Czech Republic at this point in time.

At the present time, the Czech government is working to liberalize and streamline the laws governing the purchase of real estate by a foreign national. Much of this effort is being expended due to the Republic's admission into the European Union.

At the present time, a foreign national from the European Union can purchase and own real estate in the Czech Republic directly. Historically, in the Czech Republic, a foreign national from any nation simply could not purchase and own real estate in the Czech Republic directly. In other words, in order to purchase and own real estate in the Czech Republic in days gone by, a person who was a foreign nation needed to establish a limited liability company in the Czech Republic for the purpose of taking title to real estate in the Czech Republic.

In today's Czech Republic, a citizen from one or another of the nations that comprise the EU no longer needs to establish a limited liability company in the Czech Republic to take possession or and title to real estate in the Czech Republic. Instead, a citizen of one or another of the EU member nations can own real estate in the Czech Republic directly.

At the present time, residents and citizens of other countries the world over that are not a part of the EU cannot buy real estate directly in the Czech Republic at this time. With that said, there is determined movement being had on the part of the Czech Republic's government to revamp the provisions of the law that prevent direct ownership of real estate by foreign nationals who are not part of the EU. These changes in the law are expected to take effect within the Czech Republic within the coming decade.

In any event, and has been mentioned previously, a foreign national from a non-EU can buy and possess real estate in the Czech Republic after establishing a bona fide limited liability company in the Czech Republic, the limited liability company being the entity that will take title to real estate in the Czech Republic on behalf of the non-EU foreign national.

Once the limited liability company has been established by the non-EU foreign national, in some instances the purchase of real estate in the Czech Republic can be a rather simple two step process. In some instances, the purchase of real estate can be as simple as executing one written contract for the purchase of real estate. Subsequent to the preparation and execution of the contract for the purchase of real estate, in some instances the only other step that must be taken to complete the sale and transfer of ownership in the subject real estate is the filing of a petition regarding the sale and transfer with the Cadastral Registry.

In some instances in the Czech Republic a foreign national will be interested in buying real estate that is in the process of being developed. In other words, the foreign national has an interest in buying real estate that includes a building or structure that is in the process of being constructed or that is slated for construction. The buyer desires to have the construction of the building, the development of the property, be a part of the overall sales transaction. In such a situation, rather than signing a simple contract for the purchase of real estate, the purchaser will execute what is known as a contract for future purchase contract. In other words, the buyer is executing an agreement to enter into a sales contract upon the completion of the construction or development on the subject property in question.