Czech Republic

What’s covered:

• Residential loans for apartments and houses
• Buy to let loans
• Commercial loans are available

Buying in the Czech Republic:

• There are two options as a member of an EU Country.
   
  1. To set up company that will buy the property
     standard process
     maximum maturity 15 years
     notorial deed as a necessary condition = extra cost
      
  2. As a citizen of EU
     there is a condition for permission for permanent residence *
     maximum maturity 25 years
     no notorial deed

*To get permanent residence you need to be employed in the Czech Republic or run a business in the Czech Republic.

Therefore, foreign nationals who do not live in the Czech Republic are required to set up a Czech company 9SRO) in order to purchase real estate. For this step they need 200.000 CZK (cca £5,000) registered capital that will be deposit in their account till the registration has been recorded. After that they can use the registered capital for business – e.g. for purchasing of property.

Loans available:

• For purchase, re-mortgage or equity release
• Variable and fixed mortgages available
• Financing for parking spaces is available

Loan to Value (LTV):

• Based on the valuation of the property
• 95% if purchase of home with intention to live there – must be permanent resident of Czech Republic
• 70% LTV for buy to let properties
• 60% LTV for equity release

Interest Rates:

• 3.81% for a one year fixed rate loan
• 4.45% for a five year fixed rate loan

Maximum Term of Mortgage:

• Up to 25 years in case of private ownership
• Up to 15 years in case of company ownership

Maximum Age at Completion:

• The maximum age at completion is 60

Currencies Available:

• Euro and Czech Koruna mortgages are available

Bank Account:

• A Czech bank account is required at time of funding of loan

General Fees to Consider:

• Fidentia Fee
• VAT of 5% on property regardless of size – 2007 is the last year where this applies. From 2008 5% VAT will be limited for flats up to 90m2 and houses up to 140m2. All real estates that will not meet this condition will be charged 19% VAT.
• Bank Arrangement Fee of 1%
• Monthly fee – 150 CZK (cca £3,75)