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The Number of Czech Residents Not Paying Rent is Growing

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As tenants struggle to find new housing, landlords face their own challenges from the other side. Evicting non-paying tenants can result in months of lost income.

Rental housing in the Czech Republic has been overshadowed by homeownership, but interest in renting has been growing due to the economic crisis and unaffordable mortgages. Consequently, rental prices have been increasing, and this trend is expected to continue with the rise in property taxes. The problem lies in the relationship between tenants and landlords. Many tenants are offered only yearly contracts, which leaves them uncertain about their future. On the other hand, landlords deal with property damage and difficulties in evicting non-paying tenants.

The number of non-paying tenants has been on the rise. According to the “Ideal Tenant” service, the number of non-payers increased by 11% in the last quarter of the previous year and by 34% in January 2023. These figures consider tenants who owe at least 500 crowns for at least one month, excluding minor accidental debts.

Experts and the Ministry of Labor recognize that both landlords and tenants face the same problem. Shortening the eviction period for non-paying tenants could encourage landlords to offer longer-term contracts. The Rental Housing Association is advocating for changes in the law to make evicting non-payers quicker, as it currently takes several years to do so.

A recent study in the Ostrava area by Investment and Real Estate Management (SIAN) showed that the number of non-payers has tripled. This increase is attributed to the current state of the economy. However, as the market stabilizes, it is expected that the number of non-payers will decrease.

The increase in property taxes was anticipated in the housing market, as it has been a topic of discussion for some time. While the current property tax rate is relatively low compared to other developed countries, the increase is considered fair but may impact rental prices, as it is an expense borne by landlords.

Though rental housing remains less popular in the Czech Republic compared to the EU average, experts predict a potential increase in demand in the future. More people, especially those moving to large cities, are showing interest in renting due to rising property prices and decreased financial capacity to buy homes.

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