If you plan to buy or sell a property in the Czech Republic, it is useful to become familiar with the type of local taxes and fees in advance. On our website we provide you with the basic information to ensure you obtain a solid overview and professional support.

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Taxes and fees paid when buying or selling a property in the Czech Republic

Taxes

1) Property tax
2) Real estate transfer tax
3) Income tax
4) Value added tax (VAT)

1) Property Tax (Daň z nemovitosti)
• The only tax concerning the buyer
• Once a property is purchased a yearly property and land tax has to be paid. In general the amounts are minimal and depend on the location and the size of the property. For example an apartment of the size 100 m² in the centre of Prague will be taxed at approx. 1 000 CZK / € 40 a year

2) Real Estate Transfer Tax (Daň z převodu nemovitostí)
• Transfer tax rate is 4 % of the purchase price or of the value as determined by a certified surveyor at the moment of its acquisition, whichever is higher
• The tax is payable when a property is sold and transfer of ownership takes place
• The taxpayer is the seller and the buyer is considered to be a guarantor of the tax. As a result, the buyer frequently insures this obligation of the seller in the contract. Alternatively, an amount corresponding to the value of the property transfer tax may be deposited with the notary
• Tax exemption – the first transfer of ownership of a newly-built (unused prior to the transfer) building or flat between a person or entity conducting business in the building industry or a municipality and the purchaser

3) Income tax (Daň z příjmu)
• Gains on the sale of property in the Czech Republic are generally included in the computation for the aggregate taxable income. Capital gains are generally computed as selling price less acquisition costs
• Standard income tax rate:
– For natural persons: 15% of the tax base (for individual citizens of the Czech Republic, EU citizens and foreigners with long term residency)
– For legal entities: 19% of the tax base
• Tax base is the actual purchase price of the property (less acquisition costs)
• Tax exemption includes houses or apartments in the case where the seller:
– Lived in the property immediately before the sale and used the proceeds to buy a new apartment by the end of the following year, or
– Lived in the property immediately before the sale for at least 2 years, or
– Did not live in the property, but owned it for more than five years (applies also to other property assets)

4) Value Added Tax (DPH – daň z přidané hodnoty)
• If the seller is a VAT payer, then a reduced VAT rate of 15 % will be applied on the transfer of an apartment up to 120 m2 and for a house up to 350 m² of total floor area. The transfer of other properties or of land plots is taxable at the standard rate of VAT 21 %.
• The sale of buildings, apartments and non-residential premises is exempt from VAT in the case that the transfer is made after three years from the acquisition of property or from its acceptance
• If the above condition is not met, the standard rate of VAT 21 % will be applied on the transfer of a residential building, house or apartment, with the exception of properties for social housing

*For the avoidance of doubt, there is no stamp duty (as common in some Western European countries) in the Czech Republic
Other Fees

Legal Services

including purchase agreement, preparation of ownership registration at the Cadastre Office (Property Register Office), verification of signatures on the purchase agreement: 5 900 CZK / 240 €

Appraisals

Price for appraisal carried out by a certified surveyor depends on the type of property and the difficulty of the appraisal. On average, prices range as follows:
– Apartment: from 2 000 CZK to 4 000 CZK / from € 80 to € 160
– House: from 4 000 CZK to 7 000 CZK / from € 160 to € 280
– Land: from 1 500 CZK to 3 000 CZK / from € 60 to € 120

Entry to Cadastre Register

Application for ownership registration submitted by the parties together or individually, according to the agreement: 1 000 CZK / € 40

Notarial Deposit

Refers to the deposit of the purchase price of the property until the transfer of ownership at the Cadastre Office has taken place. The Notarial Deposit is protected by the state. Fees are derived from standard table values (e.g. for a property with a value of CZK 10 million / € 400k the fee is approx. 23 600 CZK / € 950)

Lawyer Deposit

As the same purpose as the Notarial Deposit but is made with an appointed legal firm rather than a notary and is generally cheaper, although it is not protected by the state. The parties should decide jointly whether they wish to opt for a Notarial or a Lawyer Deposit.

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