<p>Pension funds will be able to invest in housing, the Senate approved it.</p>

Prague - Pension funds will likely be allowed to invest in housing, which could support residential construction in the Czech Republic. The Senate approved this today in a related law that follows the new housing support law. Taxpayers may also be able to reduce their tax base by the interest on loans taken by housing cooperatives. The law also introduces a rule that will allow housing cooperatives and owners' associations to disconnect non-payers from services. The condition will be that the non-paying owner is in default for three months. The bill will be submitted to the president for signature.

"The amendment will allow pension companies to invest to a certain extent in real estate funds, which on one hand will strengthen the diversification of the portfolios of participants in pension insurance, and on the other hand, it will help the development of the domestic housing market," said Aleš Poklop, president of the Czech Association of Pension Companies, to ČTK.

All investments by pension funds in housing may not exceed 20 percent of the fund's assets. They could invest, for example, through a qualified investor fund or another legal entity. Such a legal entity, a Special purpose vehicle (SPV), could issue bonds that the fund would purchase. The pension fund could invest a maximum of ten percent of its assets into one SPV or qualified investor fund. "According to pension companies, the volume of their investments may reach up to nine billion by the end of the year and up to 20 billion CZK within five years. As a result, thousands of new apartments will be built," stated finance minister Zbyněk Stanjura (ODS) at the beginning of March.

The law will also allow taxpayers to deduct interest from the income tax base not only from their own loans for their own housing but also from loans of the housing cooperative. The condition will be that the taxpayer is a member of the cooperative and pays these interests and that the cooperative has allocated only the interests it pays to its members. This innovation was included in the law in the Chamber of Deputies based on an amendment proposed by Minister Stanjura and ODS MP Jiří Havránek.

The related amendment law introduces a court order for the eviction of an apartment. This aims to expedite disputes over the eviction of illegally occupied apartments. "Thanks to these changes, landlords will have quicker access to the apartment or house if the tenant refuses to move out after the lease ends, which should also motivate them to rent apartments based on long-term lease agreements," the government stated in the explanatory report.