avatar-01@2x
Solutions Tailored for You
Máme 1 variantu řešení vašeho problému
Zobrazit

Real Estate Sale Income Tax – How to File It Properly

Have you sold a property and handed its possession over to the new owner? Then you are under one last obligation – to pay the tax. Read on to learn where and how to go about it.

Daň z příjmu z prodeje nemovitosti – jak ji přiznat a správně postupovat?
5 minut čtení

In the previous article, we examined the taxes paid upon property transfer. Now, we’re going to concentrate on how to file a property sale income tax and how to pay it.

When is the tax on real estate sale income paid

Every seller should take notice here, as the sale income tax concerns them; however, numerous exceptions exist that could exempt them from paying it, namely the following:

  • The seller has owned the property for no less than 5 years. This period is extended to 10 years for any property obtained after 1 Jan 2021.
  • The above condition has already been fulfilled by a previous owner of whom the current seller is the heir apparent.
  • The seller has themselves occupied the property for at least two years prior to selling it.
  • The seller invests the received sum in a home of their own.

Tip: All the exemptions are discussed in more detail in this article about the taxes on property transfer.

You must file the tax even if you don’t pay it

Do you fulfil any of the above conditions? Then you needn’t pay the tax; however, you are obligated to inform the tax office about the sale. As of 2015, any tax-free income greater than 5 million crowns must be reported. Real estate was exempt from this decree until the end of 2020, prior to which the tax office was allowed to collect the information about property sales from the Land Register. As of 1 Jan 2021, however, property sale income must be reported along with the evidence of meeting one of the aforesaid conditions. And, you must always report the sale of a coop flat, regardless of the amount of your profit.

Circumventing or forgetting about these obligations will by no means pay off; you may be fined up to 15% of the income that was either unreported or reported belatedly, although the fines tend to be lower in practice.

We will help you to fulfil the legal obligations

Are you selling a property? Or, have you already done so and merely need to pay the tax now? We’ll provide advice, draft any necessary agreements or other documents, or help with the tax return. In a word, we’ll assure that everything runs smoothly.

I want to help sell the property

Muž podepisující podnájemní smlouvu
Man signing real estate sales tax forms

When you must pay the tax on property sale income

If none of the aforementioned conditions concern you, you’ll need to pay the tax. Selling property counts as any other income and as such must be included in the tax return, which is normally handed in no later than 31 March of the subsequent year. The real estate sale income is regulated by the Czech National Council’s Income Revenue Act no. 586/1992, where it is described among other income in § 10.

Upon selling property, filing the tax return is mandatory unless you are exempted from the tax. This includes retired persons or any other persons with no other taxable income. The PAYE by your employer doesn’t suffice.

Tax return

When completing the tax return form, you will want to direct your attention to Appendix 2, where you are to state the selling price along with the purchase price, plus any expenditures connected with the sale. Your net profit establishes the tax base. In other words, the basis of assessment is calculated as the difference between the total selling price and the sum of the purchase price and the transfer costs.

To elaborate, you ought to include among your expenditures not only the property purchase price (the money you paid for it), but also any outlays connected with selling the property: The cleaning or modification costs, emptying it, the brokerage fees, fees for contract drafting or the preparation of other documents, the escrow fee, and so on. You may also include the amount invested in its reconstruction. Bear in mind, however, that this incorporates only such expenses that resulted in an increased value of the property, e.g., the building insulation, the installation of new windows, etc.

What to do if you didn’t purchase the property? In the case of an inheritance, the purchasing price is substituted by the amount stated in the legal decision, whereas a donated property needs to be appraised by a court-sworn expert and dated to the day of its transfer to the new owner. The value will then stand in place of the purchasing price in the tax return. Again, it can be supplemented with the expenses spent on the reconstruction and selling process.

Tax remissions

Tax remissions normally serve to relieve the taxation of employees. However, if your income doesn’t depend upon your employment, you may take advantage of tax remissions when selling property. Aside from the basic taxpayer remission, others exist as well:

  • Tuition remission,
  • nursery school fees,
  • disabled remission (ZTP/P),
  • remission for a husband or wife with no taxable income.

In a similar fashion, you may deduct the following items:

  • mortgage loan interest,
  • building savings interest,
  • your life or pension insurance,
  • expenses on taking qualification exams,
  • labour union membership fees

Entrust us with selling your property and tax filing

We’ll protect any and all of your rights while meeting the legal requirements. We know which contracts to draft, what to file at the Land Register office and how to file and pay all the taxes. We’ll walk you through the whole process or any of its individual steps, and we’ll make sure everything is done properly.

Are you solving a similar problem?

Dostupný advokát team of online lawyers will solve it for you.

Solutions Tailored for You

Our team of experienced attorneys will help you solve any legal issue. Within 24 hours we’ll evaluate your situation and suggest a step-by-step solution, including all costs. The price for this proposal is only CZK 690, and this is refunded to you when you order service from us.

Preset Prices
All services pre-priced for no surprises.
We Do Everything Online
Save time, money and the hassle of travel.
We Work Fast
90 % of issues get solved by the following day.
Experienced Team
We have specialists for every field of law.

Pomohl vám tento obsah? Přidejte mu hodnocení

průměrné hodnocení: 5
hodnoceno: 1 krát

…nebo jej sdílejte

Autor článku

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.

Vzdělání
  • 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

Reviews of the Dostupný advokát service

MgA. Anna Leschingerová, Cvikov

před 2 years

I had no idea that there was an online service that could arrange all your legal paperwork for you. I’m so glad I found your service! Using Dostupny Advokat gives me the time to enjoy with my family and loved ones, instead of hassling with legal issues I don’t fully grasp.

Lucia Tóthová, Prague

před 2 years

We chose the premium package because it promised a fast reply within 24 hours, and we needed help quickly. A few hours after sending our order, Dostupný advokát called us. After discussing our issue and agreeing on the next steps, we felt confident in how the whole procedure would go since we had never experienced it before. (zobrazit více) We appreciate their patience.

Lukáš Řezníček, Prague 6 – Bubeneč

před 2 years

I am giving both the website and service provided my very highest rating. Dostupný advokát found a hidden risk in my contract for the transfer of an apartment, which would have cost me tons of money.

Zobrazit všechny reference

Mohlo by vás také zajímat

About us in public media
ct-inverse
hn-inverse
idnes-inverse
prima-inverse
ihned-inverse
cro-inverse
Logo Česká advokátní komora logo-apek-male
Sledujte novinky
Dostupný advokát © 2013-2023