More than three-quarters of families in the Czech Republic own real estate and are therefore subject to real estate tax. Did you know that you pay less if you have a heat pump at home? And that a pool in your backyard doesn’t increase your tax bill?
Who Must File a Tax Return?
Anyone who owns real estate pays an annual tax to the government. However, paying taxes does not automatically mean you must file a tax return. You only need to file one in the year following the acquisition of real estate . So, if you bought, inherited, or received real estate as a gift in 2015 and were the owner as of January 1, 2016, you must file the tax return by February 1 (the regular deadline, January 31, falls on a Sunday this year). In subsequent years, you will then only pay the tax.
However, if you make significant changes to real estate (for example, adding another floor or purchasing an adjacent plot of land), you must file a tax return again the following year. You must also complete this form if you wish to apply for a tax exemption.
Now, even those whose properties are located in the former Brdy military zone and who were previously exempt from real estate tax must fill out the tax return form. Conversely, real estate owners in Jablonec nad Nisou do not need to worry about filing a tax return, even though the coefficient used in the calculation has increased for 2016—the authorities calculate the tax based on existing records.
Could my property value have changed even if I haven’t bought or sold anything?
Theoretically, yes. Due to so-called digitization, it is possible that your real estate was measured as slightly smaller—in this case, you will not be affected. If, on the other hand, it was measured as slightly larger, you should file a tax return and pay a higher tax. You have certainly been informed of the survey results. If you are unsure, you should seek advice from the relevant municipal office or tax office.
In most cases, the property owner pays the real estate tax. However, there is one exception: for example, if a field or garden is leased, the tenant pays the tax. This applies if the property is registered in the land registry using the so-called “simplified method.” This information is noted in the property’s land registry extract and can be viewed at http://nahlizenidokn.cuzk.cz/ .
Thanks to the heat pump I installed, I’m supposedly exempt from paying tax
The situations in which a real estate owner is exempt from tax are listed in Sections 4 and 9 of the Real Estate Tax Act. The most common tax relief applies to holders of a ZTP or ZTP/P card, as well as, for example, those who have converted their heating system to renewable energy (it must not involve direct combustion; the exemption is valid for five years). This applies to your case; you claim the exemption by filing your tax return.
Where and when is the tax return filed?
You can pick up the blue form for the real estate tax return directly from the tax office or download it from the internet. It’s fine to print it out in black and white. If you have a electronic databox or an electronic signature, you must complete and submit the form electronically. Submit the completed form to the tax office responsible for the property’s location. If you own real estate in multiple regions, you must file multiple tax returns.
How do you pay the real estate tax?
The tax is always due by May 31. The tax office sends real estate owners a payment slip with the calculated tax amount. The payment slip is mailed by May 25 at the latest—so if you’re unlucky and are in the last mailing group, you’ll only have one week to pay. Use the information on the payment slip for the bank transfer, even if you’re not taking the money to the post office in person but are transferring it from your account.
Since 2016, it has been possible to pay the tax via SIPO. In this case, however, a notification must be submitted to the tax office on the prescribed form by the end of January. The tax is generally paid in a single lump sum. Payment in two installments would only be possible if the amount exceeds CZK 5,000.
Multiple owners of a property – who pays the tax?
For a property, either a single tax return can be filed, or the co-owners can each submit their own returns for their respective shares. It is therefore advisable to agree in advance on how the co-owners wish to proceed. If one co-owner submits a return for their share, all others must do the same.
Who can help with your tax return, and what are the costs?
If all the references to laws, regulations, and tables seem very complicated to you, you have two options. Either take your tax return—filled out to the best of your knowledge—to the tax office and ask for help there. In about half of the cases, you’ll encounter a helpful staff member who will assist you in filling it out. In the other half of the cases, you’ll leave the office without success and with the recommendation to hire a tax advisor—that’s the second option. However, not every tax advisor specializes in real estate tax. You can find the right experts on the website of the Chamber of Tax Advisors by selecting the “Real Estate Tax” specialization. The costs, of course, depend on the complexity of the tax return. Advisors indicate that for an apartment or a single-family home, you can generally expect to pay around CZK 1,000-2,000.
Can a fine be imposed for real estate tax?
If you file your tax return more than five business days late, you will be charged a penalty of at least CZK 500. For longer delays, the penalty may be higher. It amounts to 0.5% per day of delay. If you delay payment of the tax, you must pay interest starting on the fifth business day. This interest is calculated annually at the base rate set by the Czech National Bank, plus 14 percentage points—currently 14.05%.
I have a pool in my backyard. Does that actually mean I have to pay more tax?
A higher real estate tax in effect since 2016 does not apply to pools at single-family homes, but only to bodies of water used for business purposes, such as fire ponds, outdoor swimming pools, or fish ponds.