LEGAL FOUNDATIONS
General:
Czech laws are again based to a large extent on the Austrian laws, as was the case until 1945. For this reason, many laws are comparable to our civil or commercial code.
Property Purchase Agreement
The property purchase agreement can be signed at one’s private capacity. It need not be concluded in the presence of a notary. (No certification requirement). It must only be in written form.
Ownership of an Apartment and Part-ownership:
The law regarding the ownership of an apartment governs the joint ownership of a building in which joint owners and owners of an apartment are also partial joint owners of the communal parts of the building. Both ownership and part-ownership of an apartment are created as a rule by a written contract (called the building contract between the builders: §7 of the Condominium Act). Owners of an apartment can also be legal persons. Ownership or part-ownership of an apartment is valid as of the transfer of the first unit. The units can be freely sold. The legal right of pre-emption for the joint owner does not apply.
LEGAL FOUNDATIONS
Land Survey and Real Estate Register
The land survey and the land register will not be kept separately. The real estate land register contains both technical and legal entries and as such fulfils the functions that the land survey and the land register have in Germany.
Taxation upon Purchase
The real estate transfer tax is to be paid by the seller. Still, the buyer should ensure that the contract states that the seller owes this tax. The rate of taxation is 3% of the value of the building or property. Tax exemption is possible. The purchase of real estate is exempt from purchase tax. With the transfer of buildings still under construction, the reduced tax rate of 5% applies. Income from rental and leasing are subject to income tax. For natural persons the rate is between 15% and 32%. For legal persons the rate is 24% as of 2006. Foreign nationals from EU countries generally purchase real estate through a corporation (GmbH or s.r.o.). This also simplifies resale. We would be happy to assist you with the founding and further support of a corporation.
