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Typically from 3 to 5% of the purchase price (get a flat fee by using our unique Power of Attorney sale service)
2. Real estate transfer tax
3% of the sale price or valuation price (based on a valuation by someone authorized by the State) whichever of the two is higher. This is paid by the seller to the State.
3. Cost of the valuation for real estate transfer tax
Typically from 3,500 to 7,500 CZK + VAT per flat.
4. Redemption cost of the mortgage
If you don’t pay your mortgage out at the time of fixation there are typically heavy penalties from the banks. The penalties range from 10% to 25% of the remaining unpaid amount of the mortgage at the time of making a payment.
5. Final tax accounting and filing
If you have collected rent in the year in which you sold the property or made a net profit on the sale, you will be required to file a tax return to the local Financial Office. This can cost from 7,500 to 15,000 CZK + VAT.
6. Income or corporate taxes on net profit
If the owner of the property was a Czech SRO the company will need to pay corporate tax (in 2010 this is 19%) on any net profit. This includes on capital gains of the property or rental income.
If subsequent payment to the owner(s) exceeds any shareholder loans this additional amount would be subject to a 15% dividend tax.
An individual who has not held the property for at least 5 years (the time at which an investment property becomes capital gains free) will have to pay income tax (in 2010 this is roughly 15%) on the net profit whether from rental or capital gains.
7. Possible additional costs
It is advisable to have an attorney review the sale contract as the real estate agencies often don’t protect the interests of the client but are just interested in securing their commission.
There can be additional costs based on whether you would be physically present for the concluding items such as signing of the sale contract, turn-over of the apartment, transfer of utilities, etc.
If the property was owned by an SRO there can be the additional costs of liquidating the company.
For further information read: 5 Vitals to Execute a Maximum Value Resale in Czech Republic.
You can ask any questions about this article or Czech property in general, by contacting us at: info@czechpoint101.com.
What are typical selling costs for a property in the Czech Republic?
Submitted by Nathan Brown on – No Comment |
With many owners thinking of reselling at this point, one of the most common questions we get asked recently is about what the selling costs are in Czech Republic. Here are a list of them which may or may not apply to your property.
1. Real estate commission or fee
The costs of selling Czech real estate - explained.
Typically from 3 to 5% of the purchase price (get a flat fee by using our unique Power of Attorney sale service)
2. Real estate transfer tax
3% of the sale price or valuation price (based on a valuation by someone authorized by the State) whichever of the two is higher. This is paid by the seller to the State.
3. Cost of the valuation for real estate transfer tax
Typically from 3,500 to 7,500 CZK + VAT per flat.
4. Redemption cost of the mortgage
If you don’t pay your mortgage out at the time of fixation there are typically heavy penalties from the banks. The penalties range from 10% to 25% of the remaining unpaid amount of the mortgage at the time of making a payment.
5. Final tax accounting and filing
If you have collected rent in the year in which you sold the property or made a net profit on the sale, you will be required to file a tax return to the local Financial Office. This can cost from 7,500 to 15,000 CZK + VAT.
6. Income or corporate taxes on net profit
If the owner of the property was a Czech SRO the company will need to pay corporate tax (in 2010 this is 19%) on any net profit. This includes on capital gains of the property or rental income.
If subsequent payment to the owner(s) exceeds any shareholder loans this additional amount would be subject to a 15% dividend tax.
An individual who has not held the property for at least 5 years (the time at which an investment property becomes capital gains free) will have to pay income tax (in 2010 this is roughly 15%) on the net profit whether from rental or capital gains.
7. Possible additional costs
It is advisable to have an attorney review the sale contract as the real estate agencies often don’t protect the interests of the client but are just interested in securing their commission.
There can be additional costs based on whether you would be physically present for the concluding items such as signing of the sale contract, turn-over of the apartment, transfer of utilities, etc.
If the property was owned by an SRO there can be the additional costs of liquidating the company.
For further information read: 5 Vitals to Execute a Maximum Value Resale in Czech Republic.
You can ask any questions about this article or Czech property in general, by contacting us at: info@czechpoint101.com.
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