With the arrival of the new year, several major changes are coming to financial products that most of us have. These updates affect citizens and may influence strategies related to financial planning.

What changes await us, and most importantly, from when? 🙂

Building Savings Changes from 01/01/2024: Secure the current level of state support for another 6 years even if the law changes

State support for building savings will decrease from January 1, 2024, to 5% of the annually saved amount, but at most from a base of 20,000 Kč (800 €). The maximum annual contribution will therefore decrease from 2,000 Kč (80 €) to half = 1,000 Kč (40 €).
The change will affect all building savings contracts, regardless of the date of conclusion. Despite the reduction of state support, building savings will remain an attractive savings product. Until the end of the year, most building societies promise new clients that they will compensate the reduced state support from their own resources. We will be happy to inform you which building societies these are.

Mortgages from 01/01/2024: Improved Accessibility

The Czech National Bank (ČNB) deactivated the binding DTI limit for mortgage loans, effective January 1, 2024 (the DSTI limit had already been deactivated earlier, effective July 1, 2023). The binding LTV limit of 80–90% (the ratio of mortgage amount to property value) remains in place.

👉 The deactivated DTI limit set the upper threshold at 8.5 times the applicant’s annual income (9.5 times for applicants under 36 years).
👉 The previously deactivated DSTI limit set the upper threshold for loan repayment at 45–50% of the applicant’s net monthly income.

Compulsory Liability Insurance in 2024: Insurance Beyond Just Cars

The new law on compulsory liability insurance, which has already passed part of the approval process, instead of its previously announced effective date of December 23, 2023, will come into force only in the first months of 2024 – most likely in March 2024.

• The range of vehicles required to have liability insurance will expand, most often mentioned are: electric scooters, segways, snowmobiles, snow groomers, with a design speed above 25 km/h.

• The minimum insurance coverage limits will increase to at least 50 million Kč (2,000,000 €).

• The obligation to carry a green card will end. Police officers will now be able to check compulsory insurance online in a database.

• The vehicle operator will be responsible for paying the insurance.

Pension Savings: Changes from July 2024

The state wants to motivate citizens to save more money for retirement. Therefore, it is adjusting the amount of state contributions, which will only be paid from 500 Kč (20 €) upwards. In such a case, the state will contribute 100 Kč (4 €).

You can receive up to 340 Kč (13.6 €) per month from the state, i.e. 4,080 Kč (163 €) annually. To receive the maximum contribution, you must save 1,700 Kč (68 €) or more.

These changes will only take effect in the second half of 2024, so we will cover this topic in more detail in upcoming newsletters.

Note: All conversions from CZK (Kč) to EUR (€) were made using a fixed rate of 25 Kč = 1 €.