Tomorrow we fly to Prague. All of us!
Needless to say, WE’RE EXCITED!!!
Business or Pleasure? Both.
My wife and I are taking our 2 kids (8 & 10 years old) for a vacation.
But the trip is also business: we fly there to sign the sale of our Prague home.
I had started to sell it back in 2012. But the market and exchange rates make it a poor choice. Good thing, too, as I gained a better understanding to what’s really at stake in selling a home abroad. (more on that below)
In 2006 we moved from the United States to Prague, Czech Republic. Back then, it was my wife and I, and our infant daughter.
That was a whirlwind adventurous move, done in just 3 months! We sold our car, our house, quit our jobs and moved to Prague. And for many of my clients since, that’s the adventurous move of choice.
It took us 3 months from “Hey, wanna move abroad?” to “And here’s our new home.”
In 2007, just a year later, we bought our flat. A beautiful location, in downtown Prague 6, between two major parks, quick walking distance to Old Town Square. That was home for 3 more years.
After our RV Parkers-turned-Griswolds trip, we made a choice between New York City, US and Halifax, Nova Scotia. Given a growing family, we chose Halifax. yeah!
Meanwhile, our Prague flat was rented – and stayed so for the past 6 years. Our long-term tenent has been itching to buy it these past few years. Finally, game on.
Business Talk for Those Interested
Taxes and exchange rates cannot be ignored. When timed right, exchange rates play very well in your favour. In 2012, I backed out of selling the flat because I finally appreciated what can happen if you have poor timing.
I listened and learned from our guru accountant. I patiently watched the exchange rates between Canada/US/Czech Republic. This time, we’re selling at a great time. Here is why:
- The Czech housing market is a “Seller’s market,” so an opportunity to sell.
- The Czech crown is stable, hence a reliable ride from decision to signature.
- The US dollar is stronger than when we bought. So to the IRS, our sale is a “loss.”
- The Canadian dollar is slightly weaker, so the sale is profitable, but not too much.
- With a weaker Canadian dollar, our Czech proceeds exchange into more for us.
- We owned the flat for 9 years, so no capital gains tax (over 5 years).
Now, I know this is just a bullet list thrown at you in a blog post. I’m sure you know there is more not explained here. But this really is the big picture.
Everybody’s scenario is different. You may be in different countries, so different rates & timing. But the understanding is the same and should “translate” well. 🙂
We’re going to Prague!
We’re going to have fun, to see his “hometown” as our 8 year old proudly calls it.
And we’re going to make some hard-earned money.
And I’d be wrong to leave out we feel a bit of sadness, too, to be finishing the Czech chapter in our lives.
If you have a quick question, feel free to contact me.
If you want the full blow-by-blow of how this process works, I plan to write it up next month in the Gone In One Year program.