As some of you know, I'm currently in the process of buying an apartment in Prague. I thought it might be useful to share my experiences in the hope that it may aid others.
The process for buying property in the Czech Republic is quite simple (in theory). Once you have found a place and your offer has been accepted then you have the dilemma of how to complete the sale.
As an EU citizen you can presently buy property in two ways, via a S.R.O or with an EU Residency Permit. Both cost money and are the only ways property can be purchased .
A S.R.O is basically a limited company. When you buy a property you can purchase of off the shelf company for the sole purpose of buying property and set yourself up as a director of the company. However this is subject to annual accounting and has trickier tax implications later. For instance capital gains tax when you sell the property. People outside the EU can only purchase property in the Czech republic this way.
A Czech EU Residency Permit allows foreigners to purchase property as an individual in their own name. This is cheaper (in the long run- i.e. No accounting) and after 5 years you do not incur capital gains tax when you sell the property. A residency permit also makes obtaining a mortgage in the Czech republic easier.
Once this is set up you can apply for a mortgage (if you need one). There are numerous companies out there that can help set up both your mortgage and purchase method, these most notably include Ceres, Star Capital Finance and Czech Point 101.
Czech Banks are very cautious about lending money for property purchases and will probably under value the property when they do a valuation, so the bigger the deposit the better. Interest rates in the Czech republic are also ridiculous for lending money, typically 3.15% at present. In my case I have gone for 10 years with 5 year fixed rate. This means that I may the mortgage off over 10 years but have the option to pay the remainder after 5 years without penalty. I could have chosen a term of 5 years and 5 years fixed rate but the interest rate would not be as favorable as the bank will assume that all business will cease after that 5 years. However my intention is to pay off the remainder at 5 years.
My biggest tip is be wary of the agents, it seems that estate agents are the same no matter where you go. In my case I felt rushed to sign the reservation contract; but the mortgage advisor at Star Capital suggested it should be viewed by a lawyer first. I'd also say this is crucial. The lawyer I am using charges around £650 for the complete service and he definitely acts in your best interests.
I'll post more when the sale is complete and I start renting the property out. If anyone has any questions, feel free to send me an email