This method of buying has seen phenomenal profits for the investors over the past few years in the Czech Republic.
What does it mean?
Buying off-plan property means that you reserve the property of your choice on a new development before the construction is completed, often before it has begun or even before the developer has been granted the license to build.
How it works?
This way of purchasing property is attractive due to low prices and because you are being offered to purchase an empty plot of land and an architect’s drawing. Usually, you would have to pay 30% of the purchase price as a deposit and then nothing more until completion which can then be financed by a 70% mortgage. This enables you to make a very handsome profit on your original investment.
As construction begins and the development takes shape, the purchase price is increased substantially. Once the development has been completely finished, other interested parties are willing to pay more for the completed property. So, it is profitable to make such investments, of course with proper legal advice and thorough research.
An advantage of buying off-plan properties is that if you sell the property before or on a completion, there is no Capital Gains Tax to be paid irrespective of how much profit you have made.
At the time of pre-construction the developer is enthusiastic to sell as many properties as possible to minimize his risk and negotiate lower interest rates from their investors. It is noteworthy that a 30% deposits are often all you need to invest in the pre-construction.
A great investment
Buying off-plan properties in the Czech Republic can be a great investment with outstanding returns in a considerably short period of time. It is important to remember that all the investments should be done wisely with a help of a legal consultant.