Foreigners should soon be free to buy Czech residential property. The cabinet has endorsed an amendment, presented by the Finance Ministry, that now needs to be endorsed by the parliament and signed by the president. The change would be valid from May next year.
Finance Minister Miroslav Kalousek says that the main reason behind the proposal is that the five-year transition period the Czech Republic negotiated with the EU is nearing an end.
The proposal endorsed by Mirek Topolánek’s cabinet does not allow foreigners to buy agricultural land. This will only be possible two years from now because the exception in this case is seven years.
Analysts agree that it might be mainly people from eastern European states who would be interested in buying. “People from outside the EU will welcome the amendment. Up until now, they were only able to invest into residential property in the Czech Republic if their company was located here,” said Ondřej Novotný, a King Sturge analyst. He expects them to be interested more in the flats of lower and middle price category since they have already inquired about the higher standard flats earlier.
Gabriela Dilhelová, from the real estate company Efektim, does not expect any big changes on the Czech real estate market. “The financial crisis makes any judgment of what will happen in six months difficult. Right now, the eastern investors are very cautious. Moreover, property prices in the Czech Republic are very high compared to countries outside the EU,” she said.
Jiří Fajkus, from Real Spektrum, does not think the amendment will “shake the domestic market” either. “It is nonsense to think that the foreigners are lining up outside our borders to buy some property and now their time has come. Had they wanted to invest here, they would have done it already through companies or though [Czech] individuals,” he said, adding that the amendment will bring the Czech Republic closer to western Europe. “The property market will be more mature,” he said.
According to the data of real estate company M&M, it is the Slovaks who top the list of foreigners buying property here, followed by the Vietnamese, Russians, Ukrainians and the Dutch.