Why sell / buy property in the Czech Republic? It's cheaper.

23/03/2020

Every now and then I hear not only from my clients, but from the whole public, how expensive

it is in the Czech Republic to buy or sell real estate, that it is cheaper elsewhere, that we have to pay this or that with us on land and so on.


It has been a few days since I consulted one client with a property in Austria, and I was quite surprised at what it is normal to pay for such a purchase / sale in Austria. And it's not exactly small money.

Property transfer tax

In our country, the so-called real estate acquisition tax is 4% of the purchase price and few taxpayers leave this tax cool. After all, taxing something I buy from already taxed money is immoral, we say to each other. But it should be added that this tax, whatever its name is a little different, is common in the vast majority of developed countries. In Austria it is 3.5% of the purchase price (perhaps the only thing that is cheaper in Austria compared to the Czech Republic), but in Germany, for example, buyers must prepare equal 6% of the purchase price!

Fee for registration in the land register

Please note that according to Act No. 364/2019 Coll., Amending certain tax laws in connection with the increase of public budget revenues, with effect from 1 January 2020, the amount of some administrative fees, especially the fee for the adoption of the proposal, from the original CZK 1,000 to CZK 2000. In Austria, however, the so-called Grundbuch is also paid, equal to 1.1% of the purchase price. So if you buy a property in Austria for 300.000, - EUR, for registration in the land you pay the state 3.300, - EUR, ie about 88.000, - CZK.

Attorney or notary custody

If my clients insist on the attorney's or notary's custody of the purchase price, they must always count on additional costs beyond the mediation commission. Lawyers with whom I cooperate for a long time charge about 5000, - CZK for custody. The notary is governed by a tariff, where in most cases the price of custody ranges from CZK 5,000 to CZK 20,000. Does it seem too much? In Austria, a notary charges between 2% and 3% of the purchase price. I.e. for a property worth EUR 300,000, you give the notary even EUR 9,000 for safekeeping and related work. That's almost a quarter of a million crowns! In Germany, in most cases, 1% of the purchase price is paid for legal services. Nor is it a negligible load.

Brokerage commission

Here we are with Germans and Austrians at similar prices. In Austria, the commission for brokering is mostly around 4% + VAT, in Germany we are somewhere around 5% to 6% + VAT, which are similar tariffs as in our country. If we add up the costs associated with buying / selling real estate in Austria or Germany, we get significantly higher amounts than are common in the Czech Republic. In Austria, as a buyer (who pays most of the costs associated with the trade), we have to expect an additional approx. 10% of the purchase price, in Germany even 13%! So what do you say. Do you still find that the costs associated with buying / selling real estate in the Czech Republic are high?

Do you have any questions or comments about my article? Coptact me. I'm glad to discuss it with you.