Pros for obtaining a property in the Czech Republic
Acquiring residence permits in relatively easy in the Czech Republic and it can lead to citizenship in 5 years. There has been a solid GDB growth. GDP per capita is 22,843 EUR. Low interestest rate, low inflation, high growth rates; uneployment rates at very low levels.
Properties in Prague are considered to be heavily overvalued but still constitue an interesting investment direction. Czechia is a property market in a developed economy. Yields are not that high - 3% maybe 4% yield is possible.
Czechia is considered to be a country with good work ethics and many opportunities and Prague is within a strategic location in Europe. Berlin, Vienna and Wroclaw are still within 350 km. Population is growing and the increase is expected, as opposed to other countries.
There are low buy-sell costs when it comes to property purchase. The 4% real estate transfer tax has been abolished.
The real estate prices away from the city center can be found for 3,500 - 4,500 EUR. Every apartment in the city center or the business center is already way above these prices.
Residence permits on the grounds of owning real estate
There are no restrictions on foreign buyers in the real estate markets. You can set up a company dealing with real estate or any other line of business. Once you are there you can simply increase your assets by purchasing a real estate.
Residence permits on the grounds of company formation
Setting up a business is the quickest option. You have to prove that you have around 15,000 EUR on the bank account and you can support yourself and you have to participate in the national healthcare scheme. Proof of a place to stay is necessary; then you get get a residence permit for yourself and your dependants. It is a quick process - takes 3-6 months.
Taxes & Rental income tax
Rental Income Tax is low; it is 15% to 23% and there is a stardard deduction of 30% for expenses, including CGT. Capital Gains Tax is added to gross income in the year. If you keep the property for 10 years after purchase you do not pay CGT. 15% is the general income tax; there is no wealth tax.
Other residence types in Czechia
There is a multitude of other residence types in Czechia; however as an investor you may be interested primarily in the company formation model which is mostly straight-forward and fastest.
Which residence permits offer a path to permanent residency and citizenship?
There is a variety of residence permit types leading to acquiring the passport. It guarantees access to the Schengen Zone, US and Canada.
Restrictions & Challenges
High prices - are a disadvantage. It is a mature market and tourism is not expencted to grow in the future. There has been a development shortage and there aren't that many construction sites.