Purchasing real estate in the Czech Republic- this time in Racice (only 50 minutes away from Prague)

A 19th century farmhouse with six bedrooms and five bathrooms is up for sale in Racice- a small town near Prague. The house sprawls over 240 square meters and includes two floors and grounds of nearly a quarter of an acre. The yard of the house contains mature, fruit bearing, nut and cherry trees as well as a pool with waterfowl. How much will you pay for this magnificent property? Pay attention- no more than 484,000 US dollars.

In the early 20th century the property served as a workshop and as a drying shed for beer hops, but it was renovated between 1989- 1993 by its current owners. For example, the old building used to store carriages serves today as a porch with a large fireplace and a minibar. The furnishings of the house, including collectors’ items, is included in the price of the property. The walls, most of which are painted white, are constructed of bricks and stone. The floors, windows and stairs are constructed out of pine.

The first floor includes an office and a bedroom (both with a view of the village), a kitchen, two bathrooms, a service room with a biofuel stove, a dining room for 12, an additional kitchen, a fireplace and doors that open towards the garden. The two kitchens include wooden flooring, storage cabinets and basic implements.

The second floor includes a separate housing unit with two bedrooms and a bathroom. The unit has a magnificent view and is furnished with a sofa and couches from the Biedermeier period. The rest of the second floor has two additional bedrooms (one of them includes an exterior staircase for the garden) and two additional bathrooms. The ceilings of one bedroom and of another bathroom are made of traditional rounded wooden beams.

The village of Racice.

The village of Racice is populated by around 300 residents and contains taverns, stores, restaurants and supermarkets in a radius of 10 minutes’ drive. The area has many castles and many bicycle paths, tennis courts, fishing spots, horseback riding establishments and even a small airport. The village is also a center of rowing and kayaking. The village is only 50 minutes away by car from the center of Prague and about an hour away from the Rozin Airport, the Czech’s Republic international Airport.

A review of the Prague real estate market

The real estate market in Prague is stable and most units are sold quickly (within a matter of weeks) following interest by several buyers. “Due to the limited supply of apartments in Prague and the absence of new development in the city for bureaucratic reasons, the real estate prices in Prague sometimes rise by double digits every year,” says Thomas Belhuthe, a senior real estate consultant in the Svoboda & Williams Company.

“The market is driven by a low unemployment rate, a rise in wages, low interest rates, and a high availability of mortgages which were, until recently, at a level of 100%” says Blanke Wachovia, the research manager of the Czech Real Estate agency JLL and adds that “For foreign investors, the Czech Republic and Prague represent a stable and safe economic environment characterized by a high quality of life”.

According to her “The demand this year in the real estate market is expected to drop do to two changes: the application of strict rules regarding mortgages and changes in the field of the real estate acquisition tax which has hitherto been applied to the buyer”. Nonetheless, Zatpeter Visnovski, the CEO of the real estate agency Lexxus, claims the opposite is true: according to him delays in urban development limit the supply of apartments for sale and maintain a high price level.

Who buys real estate in Prague?

“Foreign investors make up about 15% of the purchasers and their representation rises in upscale apartments” says Visnovski “They tend to seek properties in the historic center of Prague and nearby, for example in the Lesser Castle District Town, and the Vinohrady neighborhood. Most foreign investors come from Russia, the Ukraine, the European Union States, the United Kingdom and the United States but there are also small groups of investors from Israel Vietnam, and China, primarily business men.”

Points to remember regarding the purchase of Real Estate in the Czech Republic

The Czech Republic is a member of the European Union, although it maintains its currency as the Czech Koruna. Since 2011 there are no limitations preventing foreign citizens from purchasing real estate in the country. However, Thomas Belhuthe recommends utilizing the services of a local real estate consultant for a single reason: the entire administrative process of purchasing the real estate property is performed in Czech.

Many foreign purchasers employ a local lawyer and the local professional fee per hour starts at 2000 Czech Korunas. Belhuthe claims that the professional fee can reach as high as 5000 Czech Korunas per hour when an international law firm handles the purchase. To this cost, a purchase tax of 4% that is paid by the purchaser and a real estate tax should be added, but mortgages can finance 70%-80% of the purchase price.

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