Can I get a mortgage on a flat that is not yet registered in the land registry?

Standard mortgage draw-down does not allow this, because a mortgage cannot be registered against something that does not yet exist in law. Buyers usually conclude a contract for a future contract (smlouva o smlouvě budoucí) and the mortgage is drawn down after the owner's declaration is registered and the unit transferred. The exact process is set by each bank.

When do I become the owner of the flat?

Only upon registration of ownership with the Czech Land Registry. Under Act No. 256/2013 Sb., the land registry office cannot decide before twenty days have passed since notification, and the average registration time is about 22 days.

How do I protect the purchase price?

You pay through lawyer's or notary's escrow, from which funds are released only once conditions are met, typically after your ownership is registered. Cash payment is also limited by Act No. 254/2004 Sb., which makes escrow the practical choice.

What happens if the bank refuses the mortgage?

It is advisable to include a financing condition precedent in the contract, which sets out how the parties exit the reservation. The outcome depends on the exact wording of the contract.

Do I pay property transfer tax?

No; property transfer tax was abolished by Act No. 386/2020 Sb. Tax consequences for the seller, such as holding periods, are covered by the Income Tax Act; details should be checked with the Tax Office or a tax adviser.

Mortgage on a flat in a house being divided: what banks require

Published 31 October 2026

A bank will typically provide a mortgage on a flat once that unit has legal existence—that is, once the owner's declaration is registered with the Czech Land Registry (katastr nemovitostí)—and once the bank can register a mortgage (charge) against it. If the flat in a house being divided has not yet been registered, the parties use a staged approach, escrow for the purchase price, and the mortgage is drawn down after registration. The house owner must therefore structure the transformation in a way that is clear and verifiable for banks.

Summary

A bank needs an existing unit, clear ownership, an unencumbered title deed, and the ability to register a mortgage against it.
Until the owner's declaration is registered with the Czech Land Registry, the flat does not legally exist as a separate property and standard mortgage draw-down is not possible.
Bridging this gap uses a contract for a future contract (smlouva o smlouvě budoucí), escrow, and mortgage draw-down after registration.
The house owner speeds up sales by preparing documents in advance and confirming the procedure with banks before a reservation is signed.
The process differs from bank to bank, so buyers should confirm it with their bank before signing a reservation.

Why a mortgage on a unit in transformation is different

A buyer of an ordinary flat in a completed building presents the bank with a title deed (list vlastnictví), a purchase contract and a valuation report. In a house that is only being divided into separate units, the situation is different. A unit as a separate property comes into being only on the basis of the owner's declaration (prohlášení vlastníka) under §§ 1166 et seq. of the Civil Code (Občanský zákoník č. 89/2012 Sb.) and its registration with the Czech Land Registry. Until then, only the house on the land exists.

The bank secures the loan with a mortgage (charge) on the property. Under the Civil Code §§ 1309 et seq., a mortgage is created by registration in a public register. A mortgage cannot be created against something that does not yet exist in law. This is the source of almost all practical difficulties.

Checklist: what banks usually require

Each bank sets its own requirements in its internal rules. However, the same categories tend to recur. Buyers should have these ready, and the house owner should be able to provide them.

Unit documentation: current title deed entry (list vlastnictví), owner's declaration setting out the unit and the share in common parts, and if applicable, rules or regulations of the homeowner association.
Purchase contract or contract for a future contract (smlouva o smlouvě budoucí) with precise description of the unit, price and payment terms.
Valuation of the unit prepared by a surveyor or valuer recognised by the bank.
Clear legal status: no outstanding mortgages, enforcement records or other restrictions that would prevent the bank from taking first-position security.
Buyer documentation: income, liabilities, own resources for the buyer's contribution.
Property insurance and assignment of rights from the policy in favour of the bank.
Information on house management: who manages the building, how a maintenance reserve fund is built up and what the service charge regulations are.

What if the unit is not yet in the land registry?

This is the key point for a house being divided. The usual approach has several linked steps.

Reservation and contract for a future contract (smlouva o smlouvě budoucí under §§ 1785 et seq. of the Civil Code). This binds the parties to conclude a purchase contract once the unit is created.
Registration of the owner's declaration with the Czech Land Registry. Only this creates the units.
Conclusion of a purchase contract for the now-existing unit and application to register ownership.
Escrow of the purchase price with a lawyer or notary, which is released only once agreed conditions are met.
Draw-down of the mortgage and registration of the mortgage in favour of the bank.

Some banks allow mortgage draw-down only after the mortgage is registered; others require additional security, such as a mortgage on another property. Buyers should therefore ask their bank before signing a reservation whether, and on what terms, it will lend on a unit in a house undergoing transformation.

The role of the land registry and timing

Ownership passes only by registration with the Czech Land Registry. Under the Land Registry Act (Katastrální zákon č. 256/2013 Sb.), the land registry office must not decide before twenty days have passed since the owner was notified. The average registration time is about 22 days. When planning mortgage draw-down dates, this period must be accounted for, and it applies repeatedly: for the owner's declaration, for transfer of ownership, and for the mortgage.

For both buyer and bank, the order of registrations is essential. The registration of ownership and the registration of the mortgage are therefore usually applied for together, and their order is governed by the contract documents. The house owner thus prevents a situation in which the buyer bears payment obligations before acquiring ownership.

Protections for buyer and seller

Buyers worry they will pay and not receive the flat. Sellers worry they will offer a flat and the bank will ultimately refuse the loan. Both risks are reduced by the same tools:

Cashless payment via lawyer's escrow. Cash payment is also limited to 270,000 CZK per day (Act No. 254/2004 Sb.), which does not suit large purchase prices.
Financing condition precedent in the contract: if the bank refuses the loan, the parties are released from the reservation on pre-agreed terms.
Checking the title deed before signing and before release of funds from escrow.
Clear documentation of the building: technical condition, division of common parts, management arrangements.

The property transfer tax was abolished (Act No. 386/2020 Sb.), so buyers do not pay it. Tax consequences for the seller, such as the holding period or use for dwelling, are covered by the Income Tax Act (Zákon o dani z příjmů č. 586/1992 Sb.); details should be verified with the Tax Office or a tax adviser.

What the house owner should prepare

Successful per-unit sales depend on buyers being able to obtain financing. At the same time, the value of per-unit sales is typically 20–40 per cent higher than sale of the whole building; the precise figure is determined by feasibility analysis. This potential is lost if units cannot be sold because of bank conditions.

Practical steps for the house owner:

At the planning stage, structure the project so that the owner's declaration and bank documents are ready on time.
Clear any encumbrances on the building, such as existing mortgages, so that units can be transferred without restriction.
Prepare valuation documents and a standardised document package for each unit.
Set the sales timetable according to the actual land registry registration periods.

These questions are addressed in the Audit and Plan phase, which typically takes six weeks. The project passes three gates (legal, permit, sales) and moves to the next phase only with confirmed figures. If you wish to entrust the entire process including sales to one partner, see the End-to-end delivery page. Further answers are in the FAQ.