The Czech Republic has had a relatively low level of property tax in recent years compared to many other EU countries. At the same time, unlike many neighbouring countries, it is typical for the Czechs to live in their own home. As recently as 2023, property taxes accounted for only 1% of total tax revenue. But the situation has changed in the last two years. So let’s take a look at how property taxes have increased.
To clarify what kind of tax we are talking about. Property tax is a property tax that we pay based on the mere fact that we own property. It is therefore not related to the transfer, sale or gift of the property, nor is it an inheritance tax.
The regime for this tax is governed by the Real Estate Tax Act. It stipulates that the taxpayer is any natural or legal person who owns or uses immovable property (land or a building). It can be levied on buildings or dwelling units as well as on land.
Are you about to make a property tax calculation? It’s not as hard as it may seem at first glance. Find out how with our article.
A property tax return must be filed by anyone who has become the owner of a new property or has made a significant change to an existing property. This applies to:
The property tax return must be filed by January 31 of the year following the change. The return is only filed in the year of the new situation – you don’t file in subsequent years if nothing has changed. The return is submitted to the tax office where the property is located – not where you live. You can file your property tax return in two ways – either electronically or on paper.
For the record, the UK has a completely different property tax system. This is a local tax, so it is collected by local (council) authorities. The tax base is based on the value of the market rent, whether notional or actual. The amount of the tax depends on the size, age and nature of the property and also on the zone in which it is classified. Interestingly, it is payable by the occupier of the dwelling, including the tenant if applicable.
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.
In 2023, a consolidation package was released that increased property tax rates for 2024 by an average of 1.8 times over previous years. The final increase was primarily influenced by which municipalities had a local coefficient. There, taxpayers had to start paying a little more. On the other hand, the adjustment was earned where no local coefficient was set.
TheMinistry of Finance originally proposed the increase in property tax in order to support the state budget. The Union of Towns and Municipalities disagreed with this form of budget strengthening. It pointed out that traditionally it was a tool for towns to increase their budgets. Even now, the tax revenue is 100% of the municipality’s income. Moreover, municipalities cover the costs of basic services related to the use of real estate.
Are you about to file a property tax return? When and under what conditions does filing a tax return apply to you? And how do you go about the actual filing? This is covered in a separate article.
As we have already mentioned, one of the main factors that now significantly affects the determination of the property tax rate is the location where the property is situated. Therefore, the rate is different if you live in Prague or, for example, in an apartment building in Horní Lhota. This is a coefficient that varies depending on the size of the municipality. It is based on the number of inhabitants in the municipality from the last census. The law sets the coefficients in seven levels, namely:
In addition, municipalities can also adjust the coefficient themselves by decree, either for the entire municipality or only for some of its territory. If the municipality does not set different coefficients for individual parts of the municipality by decree, then the statutory coefficient, which is given above, is added to the formula for calculation. The local coefficient may be set in the following range:
However, a change in the rate or a change in the local coefficient does not create a new obligation for the owners of the property concerned to file a tax return. If the amount of tax changes year-on-year in this way, there is no need to recalculate the amount of tax. The tax authority will automatically take these changes into account when calculating the tax for the current year itself.
Are you a new or long-time property owner? Find out the most important facts about property tax – how much it is, when it is payable and how and when to apply for it.
Property tax is a property tax paid by anyone who owns land, a building or a flat. It does not apply to the transfer of ownership, but only to the ownership itself. A return is only made if there is a change – for example, the acquisition of a new property, an extension or the division of land. The deadline for filing is 31 January of the following year and the return is submitted to the tax office where the property is located.
From 2024, the tax has increased on average 1.8 times due to the adoption of the consolidation package. The amount of the tax depends on the size of the municipality and local coefficients that municipalities can set by ordinance. The tax revenue remains 100% municipal revenue. A change in rate or coefficient does not require a new tax return – the office recalculates the tax automatically.
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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