Immovables and foreigners – incoming liberalization

The amendatory Act already at the Parliament. If the amendatory Act passes, foreigners could acquire immovables free of any limitation, with exeption of agricultural land resources.

In the year 2009 expires the transitional period, which was negotiated by Czech Republic with the European Union concerning some limitation relating to acquiring „premises of housing collateral" by the foreign citizens - foreigners and thereby ends the exclusion of the principle of free movement of capital, which is one of the fundamental Community law principles. With respect to the above mentioned limitation the foreigners, who wanted acquire immovables, had to so by the medium of a company or had to obtain the well-known „confirmation of residence for the EU citizen". „The EU citizen is entitled, not obliged to apply for confirmation of temporary residence" which is clarified, with needful irony, on the websites of Foreign Police.

The term „premises of housing collateral" was broadly interpreted in this country. Practically, according to the Ministry of Finance, it could be any flat or family house. A prestigious law office took a view, that a flat is not a premise of housing collateral, which is used by the foreigner for main housing, if he does not keep at disposal his own flat in a country, he comes from. The truth is, that all the foreigners were interested in getting the confirmation of temporary residence (or in founding a company, in dependence on particular cases), to avoid obstructuins.

Regular readers of this magazine may remember, that we have been alredy solving this problem at the Progletto Repubblica Ceca magazine. In the course of two years the foreign exchange law ( Act N. 219/1995 Coll.), which imposes a limitation in relation of foreigners, is still in force. However now the Government has proposed to omit the section of §17 in the law, which defines the „premises of housing collateral" as any immovable distinct from agricultural land resources intended to be the cultivated soil. By omitting this section in the law would acquiring immovables by foreigners become possible for everyone, without the need of applying for confirmation of temporary residence or founding a company. The explanatory report of the proposed amendatory Act clarifies, that omitting the mentioned section in the law is necessary for reasons of the statutory duty fulfilment, which arises from Accession Treaty of the Czech EU membership. The amendatory Act is now at the Chamber of Deputies at the first reading.

However the limitations relating to the agricultural land resources and forests stay in force for another two years, respecting these two matters the European Union has agreed on the transitional period, which lasts seven years.

Massimiliano Pastore