An investment apartment is a commercial (service) property, not a residential property.
Yes. It is possible to register. Registration is a record-keeping procedure. According to the Population Registration Act, the registration obligation consists in registering at the place of permanent or temporary residence. The registration authorities only check whether a person actually resides at the address provided with a specific intention, but do not assess the purpose of the premises or its compliance with building regulations. Registration issues are independent of the purpose of the property. From the perspective of the Population Registration Act, registration in an investment apartment is therefore permissible.
An investment apartment is, by its very nature, intended for temporary stays, although the regulations do not specify the maximum duration of such stays. There is also no uniform view on how long a stay must last before it ceases to be considered temporary.
Anyone can purchase an investment apartment. This includes both individuals who do not run a business and individuals who run a sole proprietorship. A company or family foundation may also be the purchaser. The purchase of an investment apartment does not require running a business.
The basis for purchasing an investment apartment is a notarized preliminary sales agreement (in the case of purchasing an apartment, a notarized developer agreement is concluded). Information about the conclusion of a preliminary sales agreement, i.e., a claim for the purchase of a premises, is disclosed in the land and mortgage register of the property on which the investment is being carried out. The final transfer of ownership takes place in the form of a notarial deed drawn up at a notary's office. Upon signing the deed, the buyer becomes the owner of the premises and is then entered in the land and mortgage register kept for those premises. The application to the land and mortgage register court is submitted by a notary.
Yes. Each investment apartment will have a separate land and mortgage register. After completion of construction, a certificate of independence will be obtained for each apartment, which will enable the establishment of an individual land and mortgage register for the premises. In accordance with the Act on the Ownership of Premises, independent premises may be both residential (apartment) and non-residential (commercial/service) premises. The land and mortgage register will be established after the conclusion of the sales agreement. After signing the notarial deed, the notary will submit an application for the separation of the premises from the existing land and mortgage register of the property and for the establishment of a new land and mortgage register for it.
Yes, unless the buyer and developer agree otherwise in the contract. After the investment apartment is handed over to the buyer, they are entitled to the warranty rights referred to in the Civil Code. This means that the developer is liable for defects in the property sold, and the purchase of an investment apartment is just as safe in this respect as the purchase of other properties. The warranty is valid for 5 years from the date of delivery of the premises.
Investment apartments are subject to the basic VAT rate of 23%. For comparison, residential premises with a usable area of up to 150 m² are subject to a VAT rate of 8%. VAT is included in the price of the property. At the same time, depending on the status of the buyer and the use of the apartment, it is possible to recover VAT in accordance with tax regulations.
VAT can be settled if the buyer is an active VAT taxpayer and the apartment is used for VAT-taxable activities. In this case, it is possible to deduct VAT in full or in proportion, depending on how the premises are used, under the conditions provided for in tax law. If the apartment is intended for VAT-exempt rental or private use, the right to deduct VAT is not available or is limited.
Yes. A natural person may also settle VAT, provided that they are registered as an active VAT taxpayer and use the apartment for activities subject to VAT. The mere fact that the purchaser is a natural person does not exclude the right to deduct VAT. The decisive factor is the VAT taxpayer status and the manner in which the premises are used.
In order to obtain a VAT refund, the buyer should: be a registered active VAT taxpayer, use the apartment for VAT-taxable activities, have a correctly issued VAT invoice documenting the purchase, and show the input tax in the VAT return. VAT refunds are made according to general rules, within the time limits specified in tax regulations. The buyer will receive the necessary information support regarding documents and the VAT settlement procedure. The refund itself is made as part of the buyer's standard tax settlements.
Yes. An investment apartment can be rented out. Both short-term and long-term rentals are permitted, generally without any time restrictions. A collective residential building is characterized by shorter stays of individual persons, with no predetermined maximum length of stay. Consequently, the form of rental (short-, medium-, or long-term) is not excluded per se.
It is possible to register a business (registered office address) in an investment apartment. However, as in a residential apartment, it is not permissible to run a publicly accessible office with customer service. Running a publicly accessible office would require meeting the requirements for public buildings and carrying out a procedure to change the type of use.
Yes, provided that the apartment is used for business purposes. Expenses related to the apartment may be considered tax-deductible costs to the extent that they are related to generating, securing, or maintaining income and are not of a private nature. In practice, the costs may include, among others: service charges (rent to the community), utilities, management and administration costs, insurance costs, expenses for equipment and ongoing maintenance, and interest on the loan.
The maintenance of an investment apartment is based on the same principles as in the case of a flat. Service charges (so-called community fees) are calculated in proportion to the share in the common property. They include, in particular, administration and cleaning costs, a renovation fund, and advance payments for utilities. The amount of these fees is usually similar to the rates applicable in modern apartment buildings of a comparable standard, e.g., with a reception and security. The amount of the fees is decided by the owners of the premises through a vote. An investment apartment has the status of a non-residential premises, which means that a higher tax rate applies than in the case of residential premises.
Yes. Upon transfer of ownership of the first unit, a condominium association is formed. All unit owners become members of the association and obtain the right to co-decide on matters concerning the common property. At the same time, a condominium board is appointed to represent the unit owners and manage the day-to-day affairs of the association. In addition, a professional management company is hired to provide technical and financial services for the property, including utility billing, ongoing maintenance of common areas, organization of services and maintenance work, community accounting, and reporting. As a result, owners can use the premises without having to manage the property themselves.
Yes. The investment apartment will constitute a separate property. A separate land and mortgage register will be created for the premises, which will enable its free civil law circulation. As a result, the premises may be sold, donated, or otherwise transferred in the future (e.g., as a contribution or in-kind contribution to a commercial company or family foundation).
Call us or make an appointment at our sales office. We will be happy to tell you more about the investment and help you find a property that suits your needs.
