Basic Principles
In addition, certain basic principles of the applicable laws must be respected by the acquisition of the real estates in the Czech Republic. These principles are as follows:
- Real estates situated in the territory of the Czech Republic are registered in the publicly accessible Land Register. The Land Register contains facts about the particular real estates as well as information about legal relationships to them, especially the identification of their owners and limitations of the ownership rights. Before any acquisition, it is thus advisable to check the Land Register for the legal status of the real estates being acquired, preferably with the help of an appointed consultant who is specializing in the relevant legal field.
- The principle “superficies solo cedit“ (the surface yields to the ground) does not apply in the Czech Republic. Thus, if someone is acquiring a building, he/she is not automatically acquiring the land on which the building is situated. Therefore, it is necessary in every acquisition to ensure that besides the ownership title to the building being acquired, the acquirer also acquires the ownership (or at least the enjoyment) right to the land on which it stands.
- Real estates in the Czech Republic are being acquired upon entry of the ownership right in the Land Register (referred to as a two-phase acquisition of ownership right). Thus, for the transfer of an ownership right to an acquirer it is not sufficient to sign the respective contract (e.g. on purchase or on a donation), but the ownership right must also be entered in favor of the acquirer in the Land Register. Only then is the property acquisition accomplished.
- From the formal point of view, a written form is obligatory for legal acts (especially contracts) concerning the transfer and acquisition of the real estates, and the signatures of the parties (i.e. the transferor and acquirer) must be on the same document. In order to prove the identity of the parties vis-á-vis the respective cadastral offi ce, it is regularly required that the signatures on this document be officially certified.
- Transfers of the real estates are subject to real estate transfer tax, which amounts to 3% of the price of the real estates being transferred. The tax is payable by the transferor, but the real estates acquirer becomes by operation of law the guarantor of the tax liability. Consultation with specialists is advisable on other tax liabilities related to the acquisition of the real estates.
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