The residential construction in the Czech Republic has been facing a confusing permitting system, lengthy processes and frequent obstructions. The Czech Republic has long been one of the countries with the most complicated construction procedures in Europe, ranking, according to World Bank data (2020), 157th out of 190 countries monitored, reports the real estate office Philip & Frank.
The construction law in the Czech Republic is changing almost constantly. It has undergone several amendments over the past 10 years, and the new version, valid from 2024, also has many exceptions. Unpredictability discourages both domestic and foreign investors.
The Czech construction permitting process includes an average of 21 procedures and takes 246 days – 8 months just for the construction permit itself, compared to Denmark (64 days) or Germany (around 120 days). At the same time, dozens of different authorities deal with applications, each of which has its deadlines and comments. Digitalisation is still only on paper
The current legal framework allows anyone – individuals, environmental associations and municipalities to appeal against almost any permit. This can mean stopping the entire project for months or years. In practice, a developer could invest millions in project documentation and land preparation, and then everything stops with one appeal due to a lack of parking spaces or noise.
The builder’s portal was supposed to be a groundbreaking tool for speeding up the process. However, the reality is different: its implementation was accompanied by technical difficulties, outages and chaos in who should process applications and how. Building authorities are not uniform in their stance – some reject digitalisation, others cannot handle it, and send developers back to paper applications. Instead of speeding up the process, it often takes longer than before.
New European directives require new buildings to meet ESG criteria. "Although this is an important trend, it often becomes another administrative barrier in our country - there is no uniform assessment methodology, and ecological assessments often take months to process," says Filip Šejvl, Managing Partner of the real estate agency Philip & Frank. In Austria and Germany, the whole process is more efficient thanks to the cooperation of local governments with developers and the emphasis on clear rules and standards. In addition, in Vienna, there is active urban development, which complements the market supply and keeps apartment prices at a reasonable level.
The Czech Republic has the potential to build quickly and with quality, but it must stop holding itself back. The key will be to simplify the building code, fully functional digitalisation, unify ESG assessment methodologies and limit the possibilities of unjustified appeals.
