Property Taxes in the Czech Republic
From calculating what you owe, to filing your first return, to paying up, a Prague-based accountant offers a basic guide to the process
General Information about Property Taxes in the Czech Republic
Property tax returns (daň z nemovitosti) are due January 31st. The Czech Republic doesn't calculate property according to the market value, but rather according to the size of the property. Consequently, property taxes here are very inexpensive in comparison to other countries. The base property tax rates are different depending on the purpose of the property.
You must file a property tax return the first year, and then, once your property tax rates have been established and approved by the financial authorities, you just need to pay the same tax amount each year on or before May 31st if less than 5,000 CZK in taxes are due.
Property taxes are not paid on new apartments until the building has been inspected and approved by the local building inspection authorities (Stavební Úřad) for construction code compliance. The inspectors will issue an inspection approval (Kolaudační Rozhodnutí) verifying this to the tax office. After this, the owner of the property whom is listed in the Czech Republic's Property Registry (Katastralní Úřad) is the party responsible to pay the property taxes.
If an apartment has been remodelled, then another inspection must be conducted. Consequently, new rates are established and another return must be prepared by January 31st the following year.
The property return includes separate estimates for building and land. The base rates for building and land taxes are set by the law, but vary by city. The base rates are 1 CZK per square meter, 4 CZK per square meter for garages, and 0.10 CZK per square meter of land, multiplied by a coefficient of 1.20, then multiplied by the city rate, which is determined by the city's population size. In Prague, the local rate is 5.0.
Therefore, as an example we can preliminarily calculate the property tax due for an 85 square meter apartment in Prague without a garage and land:
(85 square meters x 1.2) x 5.0 = 510 CZK property tax due for one year
However, there are many exceptions and rates can also vary by districts within the city. As you can imagine, the process for understanding these exceptions and knowing the local authority's rates, along with re-calculating the final tax rate is daunting. It is recommended that you get an experienced Czech advisor to accurately calculate the tax rate which must be paid each year, and to prepare your tax return
Tax Payments Process
Property taxes are paid to the tax office in the region where the property is located to a bank account specially set up for this purpose. Taxes can be paid by bank transfer, or in cash at the tax office's cash desk (pokladna).
All other taxes are paid to the tax office (Finanční Úřad) where your company or your EU card (a Czech residency permit for European Union citizens) is legally registered. For each tax due, whether it's corporate tax, road tax or value added tax (VAT), there's a separate bank account, with its own number, into which your monies must be paid. The payments your company makes will be identified by a number (variabilní symbol or VS) matching your company's business license number (IČO). EU card holders must inform the tax office of the tax ID number that they will be using, which is often their passport number.
• For more information on property taxes in the Czech Republic, please contact BlueQ
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