Property Tax Return, Rental Income Tax Return, Transfer Tax Return

A property may be subject to three types of taxes / Tax Returns (more about each tax below):

  1. the Property Tax Return, deadline is 31.1 (January 31st)
  2. the Income Tax Return, deadline 31.3 (March 31st)
  3. the Transfer Tax - abolished since 2022

If you owned property during the previous year in Czech Republic, please check the following:

-do you need a Property Tax Return
If yes, then we can fill one in for you. If no, then pay the amount you paid last year.

-do you need an Income Tax Return
If yes, there is time until 31.3 (March 31st) to file.

-did you receive a letter of the taxoffice beginning with 'VYZVA',
It is a request for information from the tax office, usually meaning you did not pay taxes or there is something wrong with your Tax Return.

1. the Property Tax Return, deadline is 31.01 (January 31st)

The Propert Tax is the annual tax on the value of the property. This tax is usually only a couple of 100s or 1000s of CZK, and is calculated according to type of object, square meters and address. The address determines the 'tax coefficient' - it can be different for every (part of) town.

Anyone / any company owning on 1.1 property is supposed to pay this Property Tax, and if you bought property during the previous year, you should file a Property Tax Return.

Once you filed a Property Tax Return, there is no need to file a new one the next year, unless there are significant changes to the object, influencing the value. If nothing changes during the year, the amount to be paid to the the taxoffice is the same as on the original Property Tax Return.
This amount will be different from last year(s) in case the 'tax coefficient' changed for that part of town.

If you want us to file the Property Tax Return we need this information:

  • the complete address including part of town, cislo popisne and cislo orientacni (most buildings have a blue and a red sign with these numbers, for example 901 and 21)
  • for an apartment: the number of the apartment, the floor on which it is, and the number of square meters of living space AND number of square meters of each floor above (for the more luxurious apartments)
  • for a house: number of square meters of the ground floor AND number of square meters of each floor above (to avoid UK / US confusion: the groundfloor is on streetlevel)
  • very helpful would be a copy / scan of the 'vypis katastru' - you should have received it when you became owner in the landregister. It is also possible to get it from Czechpoint or a notary.

If you are unsure about your Property Tax Payments
  • We will contact the Tax Office and ask what you should pay
  • Also we will find out if everything was paid correctly for the previous years

2. the Income Tax Return, filing deadline 1.5 (May 1st)

In case you earn money with your property in the form or rent, then you / your company should file this as part of the personal or corporate income tax return.

Rental Income is so-called paragraph 9 income, and there is a standard 30% expense deduction (no questions asked). Service charges are not rental income, so it needs to be clear from the rental contract how high those charges are, so the service charges do not end up in par. 9.

Mortgage Payments consist of two parts: the base and the interest part. Only the interest part is deductable (not the entire sum) and we absolutely need an original paper overview stating the paid interests, we need to add it to the Tax Return. The bank sends it to you in the beginning of the year, if not: ask for it.
There is a maximum limit on how much the (rental) income total is reduced by interests, and it is 300.000 CZK. Also, you can only make use of this deduction if the mortgage is for the place you live in. No deduction is possible for mortgages on property that you rent out or do not useas main residence.

The remaining sum is subject to 15% or 23% income tax. A personal tax deduction of about 30.840 CZK may apply. For the average case, income taxes on rental income are therefore only a couple of 1000s CZK.
Capital Gains on Sales of Property may be taxable income. Note that any repairs / reconstruction / structural upgrades can be used to reduce these Capital Gains - provided these costs have been documented well (i.e. you need to provide paper proof).

In case the property has been your main residence for at least 2 years, or you have owned it non-commercially more than 5 years, then no Taxes on the Capital Gains will need to be paid at all. Also, if you do not own 2 / 5 years, but you use the Capital Gains 'for own housing needs', again the tax exemption applies.

3 - the Transfer Tax of 4% - abolished since 2022

The Transfer Tax of 4% was calculated after an expert has determined the value for taxes (this is NOT the same evaluation as was required for the mortgage). The 4% is based on the value for taxes or the selling price (whichever is highest).

Before 2018 the Seller had to pay the Transfer Tax. From 2018 the Buyer was responsible for the Transfer Tax (so just the opposite of what it was before). Currently, NO Transfer Tax is charged at all (!)

It is possible to do everything remotely, without visiting our office. You can send in your documents by mail / email / Google Drive share.

Note that this (Rental / Capital Gains) Tax Return is not different from a Personal Income Tax Return for an employed or self-employed person. If you have other sources of taxable income, you file only once per year - so not several returns for several sources of income.

How the Filing Process works

Part 1 : Your Part

  1. Order & Pay the Tax Return with the form on this page,
  2. Fill in the Online Questionnaire about your income situation,
  3. Book a free 30-minute online Document Intake meeting to talk about your details,
  4. Generate online the Powers of Attorneys for representing you at the authorities,
  5. In case you have a Datova Schranka there is no need to create PoAs - we (or you) can use your Datova Schranka for sending the documents to the authorities

Part 2: Our Part

  • we compare the Questionnaire with the received Documents,
  • we ask additional questions if necessary,
  • We prepare the Tax Return,
  • we calculate Tax Benefits,
  • we file the Tax Return at the Tax Office for you,

  • Part 3: Finishing up 2023, preparing for 2024

    • You will get a paper copy / pdf of the Tax Return,
    • You will get a document with Explanation of the Tax Return,
    • You will get Payment Instructions for 2023 and 2024,when and to which accounts,