The following real estate
taxes exist in the Czech Republic:
- tax on purchases of real estate
- tax on sales of real estate
- tax on the inheritance or donation of real estate.
In any of these cases, one must file the appropriate report and pay
the required taxes within 30 days after the purchase, sale, inheritance
or donation has been recorded in the real estate registry. The
report must be submitted to the tax inspection authority where
the real estate is located.
Tax on purchases of real estate
A real estate purchase tax report is required only once, in the
first year when real estate is purchased, but the tax is due every
year that the property continues to be owned, by May 31.
The real estate purchase tax depends on the size of an apartment,
the numbers of floors in a building, a city’s location in the
country, and so on. For example, in Prague, the real estate purchase
tax rate is about $0.023 per square foot. Thus, the tax for
an 860 square foot apartment in Prague would be approximately $20.00
per year; for a 1900 square foot apartment, it would be approximately
$44.00 per year – a very modest fee.
Tax on sales of real estate
The real estate sales tax is 3 percent of the selling price of a
property. This tax is paid by the seller, although the buyer is considered
a guarantor of the tax payment. The tax is calculated on the basis
of the price of the property as evaluated by an official agency,
or on the basis of the actual price of the sales contract, whichever
is higher.
A person who becomes the owner of the real estate through inheritance
or a gift must pay the real estate inheritance or donations tax.
Companies that own real estate in the Czech Republic can avoid the
real estate sales tax upon the sale of their property. If the real
estate belongs to the company that is officially registered in the
Czech Republic, the sales transaction can legally be considered not
as a sale of real estate, but as a change in the ownership of the
company that owns the real estate, and thus not subject to the real
estate sales tax. |
