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Calculation of property tax

Have you bought a house or land and are about to file your property tax return in January? It’s not as hard as it may seem at first glance. Find out how with our article.

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As with other taxes, the amount of the property tax is calculated by each taxpayer in his/her own tax return. Although we have encountered in practice overzealous officials of tax offices who, on the basis of public registers, have themselves alerted the forgotten owner of the flat to the forgotten return and even prepared the return for him, such a procedure cannot be counted on.

The calculation itself is based not only on the area of the land or building, but also on statutory rates and coefficients (local coefficient and coefficient according to the size of the municipality). Before you start filling in the form, prepare all the documents containing information about your property. A land registry extract, a purchase contract or perhaps a building permit will be useful. For the calculation you will need:

  • the type of building or land,
  • the area or built-up area in m2,
  • number of floors above ground,
  • the coefficients that apply to your building (you can find them on the website of the Financial Administration of the Czech Republic).

As part of the tax changes from 2021, town halls have been given the possibility to determine the local coefficient for individual parts of the municipality. They can, for example, collect more money in industrial areas. The truth is that this is the only tax that remains for the municipality or city. By setting its level, the council can support the local economy.

Selling a property?

We will prepare for you a perfect package of all the necessary contracts (especially the reservation, purchase and future contract) without legal flaws. If you’re buying a property, we’ll guide you through the whole process and check the contracts thoroughly so you don’t sign up to something you might regret later.

Tax base for buildings and units

The tax base for taxable buildings and units is the built-up area in square metres. This is based on the situation as at 1 January of the tax year.

The built-up area corresponds to the area covered by the above-ground part of the building. In the case of units, the so-called adjusted floor area is used. This is the floor area of the unit itself multiplied by a coefficient of 1.22 (if the unit is in a residential building and includes a share in the land) or by a coefficient of 1.2 in other cases.

Tax rates for buildings and units

Tax rates are also found in the Act and vary depending on the type of building, structure or unit. The rules are as follows:

(a) for a residential building, the rate is 2 crowns per 1 m2 of built-up area; for other buildings forming an accessory to a residential building on an area exceeding 16 m2 of built-up area, 2 crowns per 1 m2 of built-up area,

b) for a building for family recreation and a building of a family house used for family recreation, the rates are higher. The rate is CZK 6 per 1 m2 of the built-up area, and for a building which performs an additional function to these buildings, with the exception of a garage, the rate is CZK 2 per 1 m2 of the built-up area,

(c) for a garage built separately from residential buildings and for a taxable unit the predominant part of the floor area of which is used as a garage, the rate is CZK 8 per 1 m2 of built-up area or adapted floor area,

d) for a taxable building and for a taxable unit, the predominant part of which is used for business, the rates are as follows:

  • in the case of business in agricultural primary production, forestry or water management, the rate is CZK 2 per 1 m2 of built-up area or adjusted floor area,
  • in the case of business in industry, construction, transport, energy or other agricultural production, the rate is CZK 10 per 1 m2 of built-up area or adapted floor area,
  • for other types of business, the rate is CZK 10 per 1 m2 of built-up area or adapted floor area.

e) for other taxable buildings, the rate is CZK 6 per 1 m2 of built-up area,

f) for other taxable units, the rate is 2 crowns per 1 m2 of adjusted floor area.

The basic tax rates may be further increased in connection with additional storeys.

Tip: Every property owner is required to register for tax. This can be done by filing a real estate tax return. When does filing a tax return apply to you? We have addressed this in a separate article.

Tax base for land

For land, the tax base is determined depending on the type of land.

In the case of arable land, hop-growing areas, vineyards, gardens, orchards and permanent grassland, the tax base is the price of the land determined by multiplying the actual area of the land in m2 by the average land price per 1 m2 set out in the Decree.

In the case of farm forests and ponds with fish farming, the land price is the product of the actual land area in m2 and the amount of CZK 3.80.

In the case of other land, the tax base is the actual area of the land in m2 determined on 1 January of the tax period.

Tax rate for land

The tax rate also varies according to the type of land. In the case of:

(a) arable land, hops, vineyards, gardens, orchards, the rate is 0.75%,

(b) permanent grassland, farm forests and fish ponds: 0.25%,

c) paved areas of land used for or in connection with business activities serving primary agricultural production, forestry and water management 1 crown for every 1 m2,

d) paved areas of land used for or in connection with business serving industry, construction, transport, energy, other agricultural production and other types of business 5 crowns for each 1 m2,

e) for building land 2 crowns for each 1 m2,

f) other areas 0,20 crowns for every 1 m2,

g) built-up areas and courtyards 0.20 crowns for every 1 m2.

Tip: Did you become a new property owner in the previous calendar year? Check out a quick summary on property tax – what it is, when it is due and how to apply for it. We’ll also answer common questions about what to do if you no longer own the property, or what to expect if you didn’t file your tax return on time.

Local coefficients

A municipality may, by general binding ordinance, establish a single local coefficient of between 1.1 and 5 for all immovable property within the entire municipality or for all immovable property within a particular part of the municipality. This coefficient is then multiplied by the taxpayer’s tax for each type of land, taxable building or taxable unit.

If the municipality does not set the coefficient by ordinance, the statutory coefficient is used, based on the population at the last census. This is:

  • 1.0 in municipalities with up to 1000 inhabitants,
  • 1,4 in municipalities over 1 000 inhabitants and up to 6 000 inhabitants,
  • 1.6 in municipalities with a population of over 6 000 inhabitants and up to 10 000 inhabitants,
  • 2.0 in municipalities over 10 000 inhabitants and up to 25 000 inhabitants,
  • 2.5 in municipalities over 25 000 inhabitants and up to 50 000 inhabitants,
  • 3.5 in municipalities over 50 000 inhabitants, in statutory towns and in Františkovy Lázně, Luhačovice, Mariánské Lázně and Poděbrady,
  • 4.5 in Prague.

If I can’t count

There are many online calculators to help you calculate your property tax. If you still don’t know how much tax to pay, don’t be afraid to contact the experts at Affordable Advocate who can help you with the calculation.

And what if the coefficient for the calculation changes? In that case, you don’t have to worry about recalculating your tax. The tax office will take care of the changes and will notify you of the property tax increase and ask you to pay it.

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Author of the article

JUDr. Ondřej Preuss, Ph.D.

Ondřej is the attorney who came up with the idea of providing legal services online. He's been earning his living through legal services for more than 10 years. He especially likes to help clients who may have given up hope in solving their legal issues at work, for example with real estate transfers or copyright licenses.

Education
  • Law, Ph.D, Pf UK in Prague
  • Law, L’université Nancy-II, Nancy
  • Law, Master’s degree (Mgr.), Pf UK in Prague
  • International Territorial Studies (Bc.), FSV UK in Prague

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