Several changes have occurred in the taxation of real estate transfers in the Czech Republic. The reason is to support the growth of investment in real estate by reducing acquisition costs and red tape.
The first of these changes is the abolition of the tax on the acquisition of real estate located in the Czech Republic. This applied to the acquisition of real estate for a consideration. The tax rate was 4% of the tax base (usually the purchase price) and was paid by the buyer.
The repeal of the law was carried out retrospectively on entries made in the Land Register from 1 December 2019. The acquisition of real estate in the Czech Republic is therefore no longer subject to a special tax burden.
Another novelty in the field of real estate is the extension of the time test for the exemption of income from personal income tax when selling real estate that is not used for the housing needs of the owner. For real estate whose entry in the Land Register will be made after 1 January 2021, the period between acquisition and sale necessary for the exemption of income is extended from 5 to 10 years. This regulation is intended to limit the speculative acquisition of real estate.
Michala Mrazíková
michala.mrazikova@bdo.cz
Monika Lodrová
monika.lodrova@bdo.cz