Annual Real Estate Tax in the Czech Republic: An Explanation of Reporting and Payment Obligations
Unlike in Israel, where municipal tax (Arnona) is paid by the property occupier (tenant or owner) and determined by usage, in the Czech Republic there is a “Real Estate Tax” (Daň z nemovitých věcí) imposed on the owner registered in the Land Registry.
When do you file and when do you pay?
The tax is determined based on ownership status as of January 1st of that year.
The tax declaration must be submitted by January 31st. Please note: If there have been no changes to the property or ownership, there is no need to file a new report every year; the payment voucher will be sent automatically.
Payment Deadline
If the tax is lower than 5,000 CZK: It must be paid in a single installment by May 31st. However, if the tax is higher than 5,000 CZK: It can be split into two equal installments.
How is the tax calculated?
The calculation is complex and is based on the property area, type of usage, and various coefficients set by the local authority. The tax consists of two parts:
- Land tax: Calculated according to the type of land (agricultural, building plots, forests, etc.) and the area in m².
- Tax on buildings and units: Calculated according to the floor area or built-up area.
The final amount is affected by a “location coefficient” (dependent on the number of inhabitants in the municipality) and a “local coefficient” that the municipality may establish. Therefore, an apartment in the center of Prague will be liable for a higher tax than an identical apartment in a small village.
Additional important points to know
- Agricultural land and forests: Tax rates and calculations for agricultural land, forests, or fishponds differ from those for residential real estate and are sometimes calculated based on an average price per m² set by regulations.
- To read more about the tax system and the various taxes in the Czech Republic, click here.
- Need help with this? Talk to us
