When buying real estate in the Czech Republic must pay a tax of 3%. This is a sales tax, which is paid, as a rule, by the seller and its calculation is based on the estimated value of the property.
The buyer needs to receive a confirmation (statement) of the payment of tax by the seller. The data on the completed real estate purchase and sale transaction must be submitted within a month after the registration of the contract, the tax must be paid to the seller within 30 days after he receives a decision on the calculation of tax.
If primary real estate is being purchased, the buyer must pay VAT. The amount of VAT is 10% if an apartment with an area of up to 120 sq.m is purchased.m or a house with an area of up to 350 sq. m. VAT of 20% must be paid when buying an apartment with an area of more than 120 sq. m. m or houses with an area of more than 350 sq. m. As a rule, VAT is included in the price of the property. When buying secondary real estate in the Czech Republic, VAT is not paid.
The additional costs paid by the buyer may include a registration fee (about 0.02%), notary services (about 1% of the cost of the object). The cost of real estate valuation is paid by agreement of the parties and depends on the size of the housing area. If a loan is taken, then, as a rule, the appraiser's services are paid by the buyer. The cost of evaluating a three-bedroom apartment is about 100 euros, a family house is 200 euros.
All expenses are paid by bank transfer.
Annual taxes and utility bills
Annual property tax
The amount of the annual tax is calculated based on the area of the immovable object, and also depends on its location.
Information about the property tax is submitted in the first year of ownership of the property, then the tax is calculated annually by the tax authorities, who send a receipt for payment of tax to the owner of the property.
For residential real estate, the tax rate is calculated as follows:
- apartment in an apartment building – 1 crown (0.04 euros) per sq. m
- private house – 3 crowns (0.12 euros) per sq. m
- built-up land plots - 0.1 crowns (0.004 euros) per sq. m
- building plots - 1 crown (0.04 euros) per sq. m
The base tax rate per square meter for both residential buildings and land plots is multiplied by a coefficient that depends on the location of the property and is calculated according to the following scheme:
0.3 - in settlements up to 300 inhabitants
0.6 - in settlements from 300 to 600 inhabitants,
1.0 - in settlements of more than 600 inhabitants up to 1000 inhabitants,
1.4 - in settlements of more than 1000 inhabitants up to 6000 inhabitants,
1.6 - in settlements of more than 6000 inhabitants up to 10,000 inhabitants,
2.0 - in settlements settlements with more than 10,000 inhabitants up to 25,000 inhabitants,
2.5 - in settlements with more than 25,000 inhabitants up to 50,000 inhabitants,
3.5 - in settlements with more than 50,000 inhabitants (as well as in the cities of Marianske Lazne, Lugachovice, Frantiskovy Lazne, Podebrady)
4.5 - in Prague
Utility bills
The amount of monthly utility payments depends on the size of the housing, its location and the number of people living in it. Approximately monthly utility bills for an apartment can cost 2000-5000 kronor (80-200 euros), and for a house - 5000-15000 kronor (200-600 euros).
Rental tax
If the property is rented by an individual and the annual rental income exceeds 15,000 kronor, then the owner must declare the income and pay the tax. In the Czech Republic, the amount of income tax for individuals is 15%, and for legal entities – 19%.
The tax base will be calculated based on rental income, taking into account expenses. Expenses are determined in two ways – by actual proof of expenses or using a fixed rate of 33%.
Income tax, inheritance and donation of real estate
Income tax
According to Czech law, when selling real estate, it is necessary to pay income tax if the property is sold for more than it was purchased. In this case, the difference between the purchase price and the sale price is taxed. If the property is registered to a legal entity in the Czech Republic, then the tax amount will be 19%, and if it is for an individual, then 15%.
Income tax on the sale of real estate is not paid if:
- the property has been owned by the owner for more than 5 years
- the owner has been registered at the address of the property for at least 2 years
- if the owner has been registered at the address of the property for at least 2 years, and then sold the house and bought another one with this money, in which he registered again.
Inheritance and gift tax
According to the tax legislation of the Czech Republic, inheritance and gift tax is charged in the amount of 7 to 40%. But there are exceptions, according to which close relatives in the first line (parents, children or spouse) are not subject to this tax.
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