Selling a tenanted flat in Prague without an unnecessary discount

Should you sell a let flat now, or wait until it is vacant? We explain who to offer a tenanted flat to, how to handle viewings, the deposit and the tenancy agreement, and how to avoid losing value in negotiations.

Selling a flat with a sitting tenant is common in Prague and legally safe. A change of owner does not end the tenancy, and the buyer automatically takes over as landlord. A vacant flat usually appeals to a wider range of buyers and often sells for a higher price. A tenanted flat, however, can make sense for an investor who wants income straight away. What matters is the length of the tenancy agreement, the level of rent, your relationship with the tenant and how well you prepare the sale.

Sell tenanted or vacant?

Anyone can buy a vacant flat, including people who want to live in it and are financing the purchase with an owner-occupier mortgage. A tenanted flat, on the other hand, mainly attracts investors, who work out the yield and set their price on that basis. There is no standard discount for a let flat. The difference depends on how long the tenancy still has to run, whether the rent is at market level and how reliable the tenant is.

Waiting for the flat to become vacant also has a cost: several months without rent, possible refurbishment and new photographs, energy and management costs, and, not least, the risk that the market or interest rates change in the meantime. If the tenancy ends within a few months and the tenant is willing to leave, it is usually better to wait. If a fixed-term agreement has a year or more left to run and the rent is in line with the market, it is often more sensible to sell the flat as a ready-made investment.

The pool of buyers for a tenanted flat is narrower, but easy to identify. It makes sense to aim the offer mainly at these groups:
- private investors who want income from day one and do not want to look for a tenant or furnish the flat,
- parents buying a flat with a view to a child who will be studying, who do not mind a temporary tenancy,
- investors buying several units in the same building or area,
- clients who buy outside public listings and value discretion and ready-prepared documentation.

An off-market sale has a further advantage with tenanted flats. The tenant is not exposed to dozens of viewings, and only vetted prospective buyers visit the flat, having already seen the yield, the agreement and the condition of the flat in the documentation.

What happens to the tenancy agreement after the sale

Under Section 2221 of the Civil Code (občanský zákoník), when the owner changes, the rights and obligations under the tenancy pass to the new owner. The tenancy agreement therefore remains in force on the same terms. The one exception is that the new owner is not bound by any landlord obligations beyond those set by law that they were not aware of. For this reason, it is important to give the buyer the complete agreement, including all addenda, and to put any verbal arrangements in writing.

Under Section 2222, neither party may terminate the tenancy merely because the owner has changed. For the buyer, this means secure income; for the seller, it is a clear argument: the tenant cannot block the sale itself, nor use it as an excuse to leave.

After the transfer, the rent belongs to the new owner. The tenant should therefore be informed of the change in writing, ideally in a joint letter from the seller and the buyer giving the new account number and contact details, so that no payment goes to the old account.

Viewings, photographs and communication with the tenant

Section 2219 of the Civil Code requires the tenant to allow the landlord to inspect the flat to the extent necessary, provided the landlord gives reasonable advance notice. It does not expressly cover viewings for the purpose of a sale, and overly frequent visits could be regarded as disturbing the tenant. In practice, therefore, an agreement counts for more than an argument over how the law should be read.

It works well to approach the tenant first, explain that their tenancy will continue, and agree fixed slots for viewings, for example two a week. Photographs and a virtual tour, taken once while the tenant is present, will reduce the number of visits. The tenant's personal belongings should not appear in the photographs; if necessary, they can be covered or edited out. Some owners offer a small rent reduction in return for cooperation, which is cheaper than a sale that drags on because the flat is hard to access.

Deposit, prepaid rent and service charge statements

The security deposit (jistota) on a residential tenancy may not exceed three months' rent (Section 2254 of the Civil Code), and the tenant is entitled to have it returned when the tenancy ends. The deposit is not paid again when the flat changes hands; at the end of the tenancy it is returned by whoever is the landlord at that time, which will be the new owner. The seller should therefore transfer the deposit, together with any interest accrued, to the buyer – most commonly by offsetting it against the purchase price – and record this in the purchase agreement or the handover protocol.

The same applies to rent paid in advance and to advance payments for services. The agreement should clearly set out the date from which rent passes to the buyer, who will settle the service charges for the current year, and how the parties will deal with any overpayment or arrears. Attach the meter readings as at the handover date, a record of payments and confirmation that the tenant has no outstanding debts. Ambiguity on these points is one of the most common reasons a transaction is delayed just before signing.

How to reflect rental yield in the price and negotiations

Investors look at yield. According to the Deloitte Rent Index for the second quarter of 2026, the most expensive Prague districts included Praha 7, with an average of CZK 493 per square metre per month, and Praha 9, at CZK 468. If your tenant pays below the market rate, the buyer will factor this into their offer; if they pay market rent and the lease includes an inflation clause, you are in a strong position.

Prepare an overview that the buyer will not have to work out for themselves: the rent and advance payments, payment history, the lease end date, the rent review mechanism, and the owner's contributions to the repair fund and insurance costs. The more precise the documentation, the less room there is for a discount justified by uncertainty. For flats in the upper segment, it is advisable to have the price assessed both by the income method and by comparison with vacant flats in the building.

When an agreement to end the tenancy and a compensation payment make sense

If the flat would fetch significantly more with vacant possession than it would cost to vacate it, you can agree with the tenant to end the tenancy. A compensation payment, help with the move or waiving the final month's rent often costs less than the discount an investor would demand. The agreement must be voluntary and in writing, with a clear date for handing over the flat, its condition at handover and the settlement of the deposit. It is sensible to make the compensation payable only once the flat has actually been vacated.

Do not pressure the tenant with threats or an unlawful notice. Besides the risk of litigation, you can easily lose the very time you were hoping to save. Under an open-ended lease, the landlord may give notice only on statutory grounds, and a sale is not one of them.

The sales process for owners living abroad

An owner living abroad can complete the sale without being present in person, using a power of attorney with an officially certified signature – abroad, this is usually certified at a Czech embassy or consulate or by apostille. The purchase price is normally deposited in a lawyer's or notary's escrow account and released only once the ownership right has been registered in the Land Registry (katastr nemovitostí). The administrative fee for the application for registration is CZK 2,000, or CZK 1,600 when filed via the electronic Návrh na vklad application. Proceedings at the Land Registry office usually take several weeks.

The tax side is crucial. Income from the sale of a flat is exempt if you have owned it for more than ten years (for flats acquired before 2021, five years is sufficient); otherwise it is taxed in the Czech Republic. Where the seller is not tax resident in an EU or EEA state, the buyer is generally obliged to withhold a tax security of 10 per cent of the purchase price and pay it to the tax office; the seller can then claim any overpayment in their tax return. It pays to resolve this in advance with an adviser so that the release of funds from escrow is not delayed.

Frequently asked questions

Can the tenant prevent the sale of the flat? No. The tenant's consent to the sale is not required, and a change of owner is not in itself grounds for termination; however, the tenant is only obliged to allow viewings to the extent necessary and after prior notice, so agreeing on dates is key.

Who returns the deposit to the tenant if I sell the flat? When the tenancy ends, the new owner returns it, so the deposit needs to be transferred to the buyer as part of the sale – usually by offsetting it against the purchase price – and this should be stated explicitly in the purchase agreement.

Will a buyer relying on a mortgage be able to purchase a tenanted flat? Yes – banks routinely finance investment properties, although the terms may differ from those of a mortgage for owner-occupied housing, for example by requiring a larger deposit. Buyers should therefore check the terms with their bank before signing the reservation agreement.

The rules described here reflect the situation as of October 2026; always have specific contracts and tax matters reviewed by a lawyer and a tax adviser. DALILE LIVING can help with valuing a tenanted flat, preparing documentation for investors, arranging an off-market sale and coordinating the sale remotely.