Real Estate Information
How to be Real Estate Savvy in Prague
When you want to purchase or rent property, you need the relevant facts to make an informed decision. Prague’s fast-moving real estate market can overwhelm with its vast variety of properties, agents and prices. The Svoboda & Williams real estate company can help you make sense of it all. Below you will find information on the most desirable investment locations in Prague, procedures for buying or renting, mortgage conditions and more.
Buying Real Estate in Prague
People from all over the world are investing in Prague, one of the most beautiful cities in Europe. Compared to residential and commercial real estate in other European cities, prices in Prague are still reasonable and have solid growth potential. Below we answer some frequently asked questions to help you make your purchasing decision.
Can a foreigner buy real property in Prague?
Yes. Under EU law, anyone can buy a house, apartment, buildable land, agricultural land or forests in the Czech Republic, regardless of citizenship or residency.
Can foreigners live in the property they purchase?
Of course. But foreigners are obliged to obtain residence permits if they intend to stay in the Czech Republic longer than 90 days, regardless of whether they own property here. Foreigners can apply for residency on the basis of a work visa, business visa or student visa. You may obtain a business visa as a partner or manager of your own Czech company, which in turn owns your property. Our legal department will be happy to assist you with all the above.
Are mortgages available to foreigners?
Yes. Many foreigners find it convenient and cost effective to work with a mortgage broker. Several local banks also offer plans designated for foreigners who want to purchase residential real estate.
Real estate tax: All properties are subject to a nominal annual real estate tax depending on the position and size of the property. A typical two-bedroom apartment in the center, for example, would be taxed at about CZK 1000 per year.
Transfer tax: When a property is sold and title is transferred, there is a real estate transfer tax of 4% of either the assessed valuation or the sale price, whichever is higher. The seller normally pays this tax unless the parties agree otherwise.
Income tax: A property owned by a company and generating income is subject to taxation at the current rate of 19%. Individual Czech persons, EU citizens and foreigners with residence permits are subject to a 15% income tax based on the amount of income earned in the Czech Republic. With a "Zivnostensky List", or business license, individual Czech persons, EU citizens and foreigners with work permits are subject to a 15% income tax based on the amount of income earned in the Czech Republic during a relevant taxation period. With a Zivnostensky List, 20-60% (depending on the kind of business activities) of the total revenue is used as base for the calculation of the 15% income tax. The total income tax is then reduced by certain tax benefits. In most cases, the total charges (income tax, social charges, health insurance [if you have permanent residency]) will be around 15% of the total revenue, so approximately 85% of what you have earned you will have at your disposal.
VAT on sales: The new amendment to the VAT act defines criteria for apartments and family houses to meet be classified as “social housing“ structures: The entire floor area of an apartment must not exceed 120m2; a family house, 350m2. Newly built “social housing“ is subject to VAT at 15% of the purchase price. New residential properties which exceed the limits of “social housing“ are subject to 21% VAT. Commercial sales are usually subject to 21% VAT of the purchase price. Ask your Svoboda & Williams agent for specifics concerning your particular circumstances.
Services for Foreigners in Prague
Our agency will be glad to tailor relocation packages to suit you, including filing applications for work permits, customs clearance, etc. We familiarize newcomers with Prague and its schools, neighborhoods, medical facilities, entertainment spots and all other information to help you settle in your new home. We can also recommend housekeeping and babysitting services. For further information regarding Prague, please see our comprehensive guides at Svoboda-Williams.com Lifestyle, Prague-Stay.com Lifestyle and FeelHome.cz All About Housing.
Setting up a company
Our legal department will be glad to assist you. For further details, please see Legal Services for Foreigners.
Prague is divided into 15 districts. The Prague center includes Prague 1, 2, areas of Prague 7, and the Smichov riverbank area of Prague 5. This is the oldest, most charming part of Prague. Prague has an excellent public transportation network; for further information on metro, trams and buses, visit www.dpp.cz. Most visitors find that exploring the center on foot is the most rewarding way to get to know the city.
Areas of Particular Interest for Investors:
Prague 1 is the historic part of Prague. It spans the Vltava River and includes Malá Strana (The Lesser Town), Old Town, the Jewish Quarter, and the Prague Castle area (Hradčany). The world famous Charles Bridge and Old Town Square are in Prague 1.
Staré Město (Old Town) is the center of historic Prague 1. The impeccable preservation of centuries-old architecture gives Old Town a fairytale-like atmosphere, complemented by many restaurants, sidewalk cafes, shops, businesses and abundant nightlife.
The Jewish Quarter (Josefov) in Old Town is an architectural feast for the eyes, with block upon block of elegant highly decorated neo-classical, and Art Nouveau buildings displaying the wealth of past centuries. Five major synagogues, the historic Jewish cemetery and Prague’s most glamorous shopping street, Pařížská, are in Josefov.
Malá Strana is on the left bank of the Vltava River. Just below Prague castle, it is a romantic old neighborhood with picturesque buildings and narrow cobblestone streets winding up the hill to Prague Castle. Malá Strana has a special tranquility not found on the opposite bank of the Vltava.
Hradčany is the charming neighborhood surrounding Prague Castle and overlooking Malá Strana. In the past Hradčany was part of the castle grounds.
Prague 2 has more of a residential character than Prague 1. Hence it is quieter, but nevertheless lively. Most of the architecture dates from the late 19th century and early 20th century.
Vinohrady (formerly the royal vineyards) is a residential neighborhood on a hill just behind the National Museum. It is a short walk to Old Town and is less touristy. Most of the apartment buildings date from the mid to late 19th and early 20th centuries (high ceilings, traditional lines, parquet flooring, ornate facades, etc.).
Nové Město (New Town) was laid out by King Charles IV in the 14th century. It spreads eastward from the Vltava River and south of the National Theater. Partly in Prague 1 and mostly in Prague 2, Nové Město has beautiful architecture from the late 19th and early 20th centuries but boasts more urban flare than Vinohrady. Close to Old Town but not as exclusive, parts of Nové Město are quickly developing a unique character and are often referred to as the Soho of Prague.
Prague 4 is one of the largest districts in the southern part of Prague stretching from the lower edge of the center to the city limits. The southern part of Prague 4 includes many small villages, residential neighborhoods and open farmland. There are several major large retailers, shopping centers and newly built modern office complexes located in Prague 4.
Prague 5 starts from the bank of the Vltava and stretches to the western edge of the city. The area has a variety of individual houses, large row houses and apartments. Prague 5 has several newly built shopping and commercial centers.
The riverbank area in Prague 1, 2 and the northern sections of Prague 5, is virtually in the city center and offers many attractive apartments in the late 19th century and early 20th Neo-Classical and Art Nouveau styles. Properties offer breathtaking views of the river and Prague’s world famous architecture.
Prague 6 extends from Prague Castle to the northwestern city limits. This is primarily a residential area offering individual family homes with gardens. Most of the diplomatic community lives and works in Prague 6.
Many people factor in the availability of schools in the area of residence when looking to buy or rent property. Following is a list of the most popular international schools in Prague.
The International School of Prague (ISP) is in Prague 6, Nebusice. The ISP is convenient to all of Prague 6, parts of Prague 5, and the villages of Nebusice, Horomerice, Predni Kopanina and Mala Sarka. This area is home to families with school children from all over the world. ISP offers an educational program for students in pre-kindergarten through grade 12. More information about the International School of Prague is available at www.isp.cz.
The Prague British School (PBS) is a fully accredited school providing education based on the English National Curriculum. It serves the international as well as the Czech community with a current enrollment of 600 students. The PBS has comprehensive academic programs beginning with elementary education up to completion of the secondary education. In addition there is a daycare center for children over 20 months as well as pre-school program for children 3 – 5 years old. The school currently has two separate facilities, Kamýk in Prague 4 and the Vlastina campus in Prague 6. For detailed information please visit the PBS web site: www.pbschool.cz.
The English International School is in Libus, Prague 4 and is for children from 2 to 18 years old. Many pupils then transfer to the English College in Prague whilst others go on to boarding or day schools in the UK and elsewhere. More information is available at www.eisp.cz.
The English College in Prague is located in Prague 9. The school is convenient to public transportation. Families with students attending the English College usually live in other areas of Prague and the students use public transportation. The English College Foundation, London, established the English College in Prague to provide a broad and balanced education in English for students between 13 and 19. More information is available at www.englishcollege.cz.
Lyceé Français de Prague is located just southwest of the city center in Smichov, Prague 5. It is convenient to the center, the riverbank and to Prague 5. More information is available at www.lfp.cz.
The Riverside School is an accredited International School in Prague for children aged 3-18 years. It offers British National Curriculum and American teaching resources. For more information, visit www.riversideschool.cz.
The German School, for children of all ages from kindergarten through gymnasium, is located in Jinonice, Prague 5, in a modern campus. More information is available at www.dsp-praha.cz.
Prague 4 - The International Montessori Preschool enrolls children from 18 months to 6 years. Children are taught in English. The school is located in Prague 4 and is convenient by metro and by car. More information at www.montessori.cz.
Prague 6 - Bumble Bee has preschool children ages 3-6, an after-school club for children 6-10, and summer session for children ages 3-10, weekdays from 8 a.m. until 6 p.m. More information is available at www.bumblebee.cz.