The Czech Cabinet has approved the move which will now be presented to politicians. They are expected to vote yes as it is a condition of EU membership and must be enacted within the five year transition period.
The proposal backed by President Mirek Topolánek does not allow foreign property investors to buy agricultural land. This will only be possible two years from now because the transition in this case is seven years.
At present foreign property investors can only buy property if they set up a company. Analysts believe that it might be mainly people from eastern European states who would be interested in buying.
'People from outside the EU will welcome the amendment. We expect a lot of interest in middle and high end property,' said Ondřej Novotný, a King Sturge analyst.
But the current credit crunch means a property boom is unlikely. 'The financial crisis makes any judgment of what will happen in six months difficult. Right now investors are very cautious. Moreover, property prices in the Czech Republic are very high compared to countries outside the EU,' said Gabriela Dilhelová, from the real estate company Efektim.
Jiří Fajkus, from Real Spektrum, does not think the amendment will have an immediate impact. 'It is nonsense to think that the foreigners are lining up outside our borders to buy some property. Had they wanted to invest here, they would have done it already through companies or though individuals,' he said.
However there are benefits. 'The amendment will bring the Czech Republic closer to western Europe. The property market will be more mature,' he added.
According to data from real estate company M&M, it is the Slovaks who top the list of foreigners buying property in the Czech Republic followed by the Vietnamese, Russians, Ukrainians and the Dutch.
