Guide to Buying Property in Prague for Expats Living in the Czech Republic

1. Can Expats Buy Property in Prague?

Yes. Expats and foreign investors legally residing in the Czech Republic can freely buy property.

• EU/EEA citizens: Can buy real estate freely, no restrictions.

• Non-EU citizens residing in Czech Republic: Can buy freely

• Non-EU citizens non-residents: Can buy residential real-estate as individuals or through a Czech legal entity (s.r.o.), with no real legal limitations since 2011 (however, this might change in the foreseeable future). There are several restrictions in terms of property type (i.e., land or agriculture) , financial options and tax liabilities

2. Choosing the Right Property

Popular options for expats include:

• New builds with modern amenities

• Centrally located historical flats

• Family homes in quieter districts (Prague 6, 4, 5)

Key factors: Proximity to international schools, transport links, and job hubs.

Foreign investors often target:

• New developments in desirable neighborhoods (Vinohrady, Karlín, Smíchov, Dejvice)

• Historical apartments in the city center (Old Town, Malá Strana)

• Buy-to-let apartments near universities, embassies, or business hubs

• Short-term rental properties (though more regulated since Airbnb restrictions)

Tip: Rental yields in Prague range from 3–5% gross, depending on location and management style.

3. Mortgage Availability for Expats

Expats residing in Czech Republic can apply for a mortgage from Czech banks.

Requirements:

• Residence permit (temporary or permanent)*

• Proof of income (international earned income more restrictions can apply, primarily for non-EU residents)

• Deposit: 10–20% (depending on various factors such as age, but also some banks require a higher deposit for non-EU citizens or if income is earned outside of Czech Republic)**

• Documentation: Credit history, employment contract, employer confirmation letter and bank statements

Popular lenders: Česká spořitelna, ČSOB, Komerční banka, UniCredit.

* Mortgage is not available for non-EU who are not-residents of Czech Republic.

** Some banks may apply more restrictions on non-EU citizen  who reside in Czech Republic and/or property buyers whose income is earned outside of Czech Republic.

A mortgage advisor is highly recommended to support you throughout this process. We can recommend our partners who are extremely experienced with handling mortgage on behalf of international clients.

4. Legal Process and Contracts

Steps in the purchase:

1. Reservation Contract – secures the property, deposit (~1–2%)

2. Preliminary Agreement – optional, often used in new developments (often an advanced payment of 10%-20% of purchase price is required at this stage for a new develpment project)

3. Purchase Contract – legally binding sale agreement

4. Registration – ownership is registered at the Land Registry ("Katastr nemovitostí"), takes ~30 days

5. Escrow: Always use a notary or bank escrow account to protect your deposit.

5. Taxes & Fees

One-Time Costs:

• Property transfer tax: 0% (abolished in 2020)

• Legal fees: ~1–2% of purchase price

• Real estate agency fees: often paid by seller, but confirm in contract

• Notary/escrow fees: ~10,000–20,000 CZK

  
  

Ongoing Costs:

• Property tax: ~1,000–5,000 CZK/year

• Mortgage (lien) registration fee: ~2,000 CZK

• Provision of mortgage loan: ~5,000 CZK

• Home insurance: Required by lenders

Costs above may vary per mortgage provider and each provider may impose additional charges

Capital Gains Tax:

Generally, Capital Gains Tax varies from 15% -23% (depending on the ownership type, Individual vs. Company)

Capital Gains Tax on property sale varies and it primarily depends on:

• Residency status in the Czech Republic

• Ownership period

• Property use ("investment vs. personal use)

• Ownership type (individual vs. Company)

Capital Gains Tax Exemption for Czech Republic Residents:

Resident property owners (i.e. with residence permit) could be eligible for certain exemptions if:

• the property usage purpose was for personal use and the owner has been living there for minimum 2 years or more

• the property's ownership period was for over 5 years (or 10 years for properties bought before 2014)

• investment properties held for over 10

• Full proceeds from the sale of the property are used for reinvestment into a new home for personal use --> Several conditions must be met in order to be eligible including using the entire proceeds for reinvestment

Nevertheless, non resident property owners are generally not entitled to an exemption.

We can recommend you our trusted legal professionals as well as tax advisors should you need legal assistance

*The above should not be viewed as tax consultation and we recommend to always consult with an experienced professional tax advisor (laws may have also changed)

6. Tax on Rental Income (If Renting Out)

Rental income* is taxed at 15% (up to ~1.7 million CZK/year). Above that, 23% applies.

Deduction options:

• 30% lump-sum expense deduction (simpler)

• Actual expenses (maintenance, interest, depreciation)

  
  

*You must file a Czech tax return annually (even if you are not a residence of Czech Republic)

7. Best Neighborhoods for Expats

• Prague 2 (Vinohrady): Vibrant, walkable, expat-friendly

• Prague 6 (Dejvice, Břevnov): Family-oriented, green spaces

• Prague 5 (Smíchov): Riverside, shopping and schools

• Prague 4 (Podolí, Braník): Quiet residential areas

• Prague 8 (Karlín): Trendy and central

• Prague 7 (Holešovice): Revitalizing, highly developed, promising neighborhood

8. Living vs Investment Property

• If buying for personal use, consider long-term comfort, commute, and family needs.

• If planning to rent out, choose locations near metro, universities, or business hubs.

  
  

Tip! Some properties are ideal for dual-purpose (live now, rent later) from my personal experience.

9. Legal Structure: Private or Company?

As an individual:

• Simpler and ideal for smaller investments

• Income taxed at 15%

Through a Czech company (s.r.o.):

• Suitable for high-value/multiple properties

• Corporate tax: 21, yet more deductibles

• Better for inheritance planning and resale of assets

10. Step-by-Step Checklist for Property Purchase

• Find your ideal property (we can help you)

• Get mortgage pre-approval (if applicable to you)

• Choose a reliable agent and lawyer (we can connect you to Prague's top team)

• Decide on Legal Structure (Individual vs. Company)

• Sign reservation contract and pay deposit

• Sign final purchase contract

• Register property at Land Registry

• Hire a property manager and tax advisor (mainly for foreign investors)

• Set up utilities and home insurance (we can assist)

• File tax return (if renting out)

11. Property Management for Non-Residents

You’ll likely need:

• Property manager (maintenance, rent, legal issues)

• Tax advisor/accountant

Management Services include:

• Basic (tenant find + rent collection)

• Full-service (cleaning, turnovers, furnishing)

• Property maintenance

  
  

Note: Be aware of Airbnb regulations in Prague—some districts limit or license short-term rentals.

We collaborate with several property management companies who you can trust to ensure your property will be taken care of and a trustworthy tenant is found