Obligations When Selling a Property: What to Check Before Signing the Contract

When selling a property, it is not enough to simply find a buyer and agree on the price. It is equally important to have tax obligations, the Energy Performance Certificate, building documentation, information about the technical condition and contractual documents in order. These seemingly minor details often determine whether the sale proceeds smoothly, without unnecessary discounts and without disputes after handover.

From my experience as a real estate agent, I know that most problems do not arise because the seller wants to hide something. Often, they simply do not know which documents to prepare, what to disclose to the buyer and which obligations actually apply to them. That is why it is worth dealing with the legal, tax and technical preparation before publishing the listing, not only once a serious buyer appears.

Income Tax When Selling a Property: When It May Apply to the Seller

Income from the sale of a property may or may not be subject to income tax. It mainly depends on how long you owned the property, whether you lived in it, how you acquired it and whether you will use the proceeds for your own housing needs.

For properties acquired from 1 January 2021, a ten-year time test is generally assessed. For properties acquired before this date, the original five-year regime often applies. However, the specific assessment always depends on the circumstances, especially in cases involving inheritance, business assets, cooperative shares or the use of proceeds for your own housing needs.

If the income is not exempt, it is reported in the tax return for the year in which you received the income. For higher amounts, I recommend discussing the tax implications with a tax advisor before signing the purchase agreement. Early assessment of tax impacts can have a significant effect on how much of the sale proceeds you actually keep.

Exempt Income Above CZK 5 Million: When a Reporting Obligation May Arise

Please note: even if the income from the sale is tax-exempt, this does not automatically mean that you have no obligation towards the tax authority.

An individual is generally required to report exempt income if a single item of income exceeds CZK 5 million and it is not a situation that the tax authority can verify from available records. In practice, it is therefore worth paying attention, for example, to certain transfers of membership rights in a housing cooperative or less common transfers where the income may not be easily traceable by the tax authority.

For this reason, with more expensive properties, inherited assets, cooperative flats or more complex transfers, it is advisable to have the tax aspect checked by a professional.

Property Tax After the Sale: What to Deal With After the Transfer

After the sale, it is also necessary to think about property tax. Changes that affect tax assessment are usually dealt with towards the tax authority by 31 January of the following year. Typically, this includes the sale or purchase of a property.

If you sold your only property in a given region, the termination of your tax obligation is usually dealt with. If you still own other properties in the same region, it may be necessary to file a partial tax return and reflect the change in it.

In practice, after the ownership transfer has been registered in the Land Register, I recommend checking that everything has also been settled correctly from a tax perspective. It is a small step, but it helps prevent later requests and misunderstandings.

Energy Performance Certificate When Selling a Flat or House: When to Deal With It

The Energy Performance Certificate, often referred to in Czech as PENB, is one of the documents a seller should deal with before starting the advertising process.

When selling a building or a self-contained part of a building, the owner is obliged to obtain the certificate, present it to the prospective buyer before the agreement is concluded and hand it over to the buyer no later than when signing the purchase agreement. The energy class is also reflected in the listing and other information materials related to the sale.

For flats, the certificate for the entire building is often used. The unit owner requests it from the homeowners’ association or the building manager. If the certificate is not available in time, it is necessary to proceed carefully and correctly set up both the listing and the contractual documentation.

An exemption may apply, for example, to older buildings constructed and last significantly altered before 1 January 1947, provided both parties agree to this in writing. However, it cannot be assumed automatically. It is always necessary to verify whether the exemption actually applies to the specific property.

Building Documentation and Building Passport

For family houses, recreational properties and other buildings, buyers often ask not only about the technical condition, but also whether the documentation corresponds to the actual completed state of the building. If the documentation is missing or does not match reality, a building passport may need to be prepared.

If the documentation has not been preserved, does not reflect the actual state or the house has undergone alterations without clear supporting documents, this may become a problem during the sale, financing or subsequent use. Buyers often ask about final approval, records of extensions, technical rooms, garages, wells, cesspools or layout changes.

This does not mean that a property cannot be sold without perfect documentation. It does mean, however, that the situation needs to be checked in time, the buyer must be truthfully informed and the risks should be properly addressed in the contracts.

Technical Condition and Hidden Defects

One of the biggest risks for the seller is hidden defects. In certain cases, the buyer may raise defects even after the transfer of ownership, especially if the defect already existed at the time of sale and could not be detected during a normal inspection.

Typical examples include roof leaks, moisture behind tiles, sewer defects, hidden mould, faulty insulation, structural defects or problems with utility systems.

The seller should not rely solely on a general statement that the property is transferred “as it stands and lies.” A safer approach is to describe the condition specifically, provide known documents, list identified defects and prepare a high-quality handover protocol.

For older houses, I often recommend a technical inspection or at least a professional assessment of the riskiest parts. This gives the seller a better overview of what they are selling, while the buyer receives clearer information about the condition of the property.

Inspections and Checks: When They Make Sense

Not every inspection report is mandatory for every sale. Nevertheless, inspections and checks can significantly reduce the risk of disputes, especially for family houses, recreational properties and older real estate.

This is not a universal list of mandatory documents for every sale. Rather, it is an overview of documents that may be useful or important for negotiations with the buyer depending on the type of property.

It often makes sense to prepare or locate, for example:

• an electrical installation inspection or check,
• documents for the boiler, gas equipment and heating system,
• a report on the inspection or revision of the flue system,
• a lightning conductor inspection report, if one is installed,
• documents relating to a well, wastewater treatment plant, cesspool, septic tank or heat pump,
• manuals and service records for technologies in the house.

For flue systems, there is a difference between a regular check and a revision inspection. A revision inspection is carried out, for example, before a new flue system is put into operation, after construction modifications to a chimney, when changing fuel, after a chimney fire or if cracks are suspected.

For gas equipment, it is advisable to verify the specific condition with a qualified professional or the equipment manager. Regulations and requirements in this area develop over time, and older legal references may not reflect current practice.

What to Prepare Before Starting the Sale

Before the property is publicly listed, it is advisable to prepare a basic package of documents. The exact scope differs depending on whether you are selling a flat, family house, recreational property or land. A well-prepared sale appears more trustworthy and makes it easier for buyers to decide.

For a flat, the usual documents include the title deed, acquisition title, Energy Performance Certificate, registration sheet, advance payment schedule, information from the homeowners’ association, statutes or declaration of the owner, and, where applicable, minutes from owners’ meetings and information about planned repairs.

For a house, there are usually more documents. In addition to the title deed and acquisition title, it is useful to have building documentation or a building passport, final approval or another occupancy permit, the Energy Performance Certificate, inspection and service reports, information about the water source, wastewater disposal, heating and access to the property.

For land, it is important to check the zoning plan, access, utility connections, protective zones, easements, lease agreements, tenancy relationships and any restrictions on use.

Good Preparation Protects Both the Price and the Seller’s Peace of Mind

Obligations when selling a property are not just an administrative formality. A well-prepared sale helps protect the price, increases buyer confidence and reduces the risk of disputes after handover.

Some owners postpone document preparation until they already have a serious buyer. But that is late. If a problem appears during negotiations with the buyer, it can lead to pressure for a discount, a longer sale process or even the loss of the buyer.

That is why, when preparing a sale, I do not check only the price and marketing. I also look at the documents, technical condition, contractual risks and practical issues that buyers will raise. This preparation often determines whether the sale will be fast, safe and advantageous.

FAQ: Frequently Asked Questions About Obligations When Selling a Property

Do I Have to Pay Income Tax When Selling a Property?

Not always. It depends on the ownership period, method of acquisition, whether you lived in the property, whether you use the proceeds for your own housing needs and other circumstances. For properties acquired from 2021 onwards, a ten-year time test is generally assessed; for older acquisitions, the five-year regime often applies. For more complex cases, I recommend consulting a tax advisor.

Do I Have to Report the Sale of a Property Above CZK 5 Million to the Tax Authority?

Sometimes yes, but it is not just about the sale price itself. The reporting obligation generally applies to exempt income of individuals above CZK 5 million, unless a statutory exemption applies. It is typically advisable to check cooperative flats, inheritance and other less standard situations.

Is the Energy Performance Certificate Mandatory When Selling?

In most cases, yes. When selling a building or a self-contained part of a building, the seller is obliged to obtain the certificate, present it to the prospective buyer and hand it over to the buyer. For a flat, the certificate for the entire building is usually used.

Do I Need Building Documentation When Selling a House?

The owner of a building should have documentation corresponding to the actual completed state of the building. If it has not been preserved or does not reflect reality, a building passport may need to be prepared. For the sale, it is important that the buyer knows exactly what they are buying and what the legal and technical condition of the building is.

How Long Can the Buyer Raise Hidden Defects?

For real estate, a period of up to five years from acquisition is often dealt with in practice. However, it depends on the specific circumstances and the nature of the defect. The seller should therefore truthfully describe known defects, provide available documents and not rely only on general wording in the contract.

Can Inspections Help When Selling a Property?

Yes, especially for older houses, recreational properties and properties with gas, a chimney, boiler, older electrical installation or more complex technologies. Inspection and service reports can increase buyer confidence and reduce the risk of later objections.

What Should I Do First If I Want to Sell a Flat or House?

First, have the market price realistically estimated and at the same time check the documents, legal status and technical risks. This way, you know what you are selling, how to set the price and what needs to be resolved before the listing is published.

Are You Planning to Sell a Property?

If you are considering selling a flat, house, plot of land, recreational or investment property, I will be happy to help you prepare a safe process. Together, we will review the market price, available documents, technical condition, possible risks and the appropriate sales strategy.

As a real estate agent, I work mainly in South Bohemia, especially around Jindřichův Hradec, Tábor and České Budějovice. Depending on the type of property, I also handle sales in Prague, the Vysočina Region and Central Bohemia. Thanks to the background of RE/MAX Atrium, I can combine personal local experience with legal, marketing and real estate services.

Contact me if you want to know the realistic market price of your property or verify in good time what needs to be prepared before the sale begins.