As the name suggests, property tax is paid on the purchase or exchange of real estate. However, it has undergone a major change since 2016. The tax is always paid by buyers instead of sellers. It will therefore effectively be a tax on “acquisition”. And how high is the tax actually?
Please note: In 2015, no tax is payable on the acquisition (transfer) of real estate. For more information, see the article Abolition of the Real Estate Transfer Tax.
Many people still remember the previous situation. The tax was usually paid by the seller and the buyer was only in the position of a guarantor, whose obligation only passed if the seller failed to pay the tax. According to a statutory measure of the Senate, which came into force later, it is the buyer who is the taxpayer in the case of a transfer of real estate for consideration.
Thus, the seller is not even a guarantor and does not actually have to be concerned with the payment of the tax. Since November 2016, the tax has only been imposed on buyers who, at worst, have at least a property that the state can seize if they fail to pay the tax. According to the law, no other choice is possible.
Today, this regulation is practically no longer applicable, as the acquisition tax was completely abolished in 2020 and is not payable in 2025.
Whether you are buying or selling a property, everything that is important should be written in the contract. In our next article, we therefore give you a list of what should be included in a property purchase contract.
Only transfers of real estate for consideration are subject to tax – the most typical example is the purchase of real estate. However, it can also be, for example, an exchange of land. Conversely, transfers of real estate without consideration, most often in the case of a gift of real estate, are never subject to tax. The law also provides for certain exceptions where no tax is payable even though the transfer is for consideration. These are mainly sales of new houses or flats when they are first sold.
Since the transfer tax was abolished in 2020, exemptions from its obligation no longer apply in practice. However, you may be subject to other taxes on transfers (e.g. VAT on some transfers of new builds or income tax on sales) but not to the acquisition tax.
We can help you navigate the law, whether it’s dealing with a specific tax situation, preparing for an audit by the tax authority or defending yourself in court.
For the most common transfers of flats, family houses, cottages, chalets or garages, the tax is calculated as 4% of the agreed purchase price. However, the purchase price must be more than 75% of the local normal price. This will be verified by the tax office from price maps and other documents collected by the tax office. If you are filing a tax return, you often have to give the tax office detailed information about the property you are buying, from the age of the building to the number of toilets.
The 4% rate and the 75% of normal value rule applied until the abolition of the tax. From 26 September 2020, the acquisition tax is no longer levied and these rules do not apply.
If you are a new property owner, you are subject to the obligation to file a property tax return. When and under what conditions does this apply to you? Find out in our article.
However, if the property you are selling is exceptional for some reason (e.g. in extremely poor condition with the need for extensive renovation), this method may not be advantageous. The purchase price is small, but the surrounding properties are expensive and so is the tax.
Therefore, the legislator has also allowed for an alternative determination of the tax. You can have an expert’s report done (in addition, you can deduct the cost of the report from your tax base). Compare the amount of the agreed price in the contract with 75% of the price in the appraisal. Tax is again paid on the higher amount.
This mechanism was in place until the abolition of the tax in 2020; it no longer applies in 2025.
Please note: The acquisition tax return is no longer filed as this tax has been abolished. The following information concerns the real estate tax (property tax).
The tax return can be filed electronically or in hard copy. It is submitted to the tax authority, which is the tax office in whose district the land or building is located. The return is due by 31 January and includes all buildings acquired or altered in the previous year.
Under what conditions do you have to file a tax return?
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As mentioned above, you can also file your real estate tax return electronically. To file your tax return electronically, we recommend using the Electronic Filing for the Tax Administration (EPO) or the Online Tax Office. However, only full tax returns can be filed this way, not partial returns.
If one person has multiple properties throughout the Czech Republic, he or she cannot file one summary tax return, but must file individual returns with the individual tax office in whose territorial jurisdiction the properties are located. However, it is possible to file a summary tax return with one tax office for several immovable properties located within its territory.
Property acquisition tax was previously payable on a transfer for consideration (typically a purchase) and since 2016 has been payable solely by the purchaser; transfers for no consideration (donations) were not subject to it and exceptions included the first sale of new flats or houses. The rate was 4% of the agreed price, which could not fall below 75% of the normal price; alternatively, an expert’s report could be used (always the higher of the two amounts). However, this tax was abolished with effect from 31 March 2020.
The real estate tax return is due by 31 January to the tax authorities according to the location of the property. It can also be filed electronically (e.g. via EPO or the Online Tax Office). If you have more than one property in different counties, the return is filed separately with the relevant tax office.
He can. Whether the sale is subject to VAT is governed by the VAT Act (typically within 5 years of completion/occupation it may be a taxable transaction). However, this is not a replacement of the abolished tax, but a different regime. The amount and regime of VAT must be assessed according to the specific transaction.
Yes, the standard administrative fee for the entry of the ownership right into the cadastre is CZK 2,000 per proposal.
You file the return in one lump sum upon acquisition (or substantial change) and only pay the assessed tax in subsequent years until the parameters of the property or ownership change.
The acquisition tax was a one-off (and is abolished). The real property tax is annual; returns are usually filed by 31 January after the acquisition or on a significant change.
Not sure how to do your taxes correctly so you don’t get it wrong? We can help you navigate the law, whether it’s dealing with a specific tax situation, preparing for an audit by the tax authority or defending yourself in court.
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.
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