International Property News
Czech MPs approve extension of rent deregulation
1st April 2009
The Czech Chamber of Deputies on Wednesday in its final reading approved a proposal to extend the period of rents deregulation in flats with regulated rents until 2012, from the originally planned 2010.
The draft will now be discussed in the Senate.
Deputies across the whole political spectrum voted in favour of the slowdown of rents deregulation. Finance Minister Miroslav Kalousek was against, however.
The proposed draft amendment to the law does not plan to freeze the rents but only to slowdown the process of rent deregulation, which means that the final level of the deregulated rent in 2012 will be the same as it should have been in 2010.
"We have divided the rent increase into three phases, three years," Zdenka Hornikova (Civic Democrats, ODS) told journalists.
Representatives of tenants have welcomed the plan to extend the period of rents deregulation, but home owners have criticised the planned change.
Extension of deregulation may deprive the state coffers of up to Kc10bn, house owners' civic association (OSMD) chairman Tomislav Simecek told CTK.
Municipalities will allegedly lose Kc5-6bn due to lower rents and home owners will lose Kc4bn, Simecek said. The latter are, however, hoping to be awarded compensation based on the European Court of Human Rights' decision.
According to the original proposal, the rents deregulation should have been completed in 2010.
"However, we were aware of the fact that we are in a difficult economic situation, in recession...when many households are dealing with difficult social problems," Hornikova said.
Among the towns where rents deregulation will last longer will be localities where rents will increase by more than Kc40 per square metre this year, according to the proposal. This concerns, except the cities of Usti nad Labem, north Bohemia, and Ostrava, north Moravia, all regional cities and all cities in central Bohemia with over 10,000 inhabitants.
Source: Prague Monitor