Property tax in 2023: Who is affected and what are the deadlines

The obligation to submit a tax return for the tax on real estate occurs only in the year following when people became their owners by being registered in the real estate cadastre.

At the same time, the owners of a house or apartment for which a building permit has been issued or construction has begun or approval has been given also submit tax returns. The latest deadline for submitting a tax return is always January 31.

“The return is submitted to the tax office according to the address of the real estate. So if you own real estate in several regions, you must submit multiple returns and submit each one to each region separately,” points out Jana Jáčová, head of UOL Účetnictví.

It is ideal to file the tax return electronically on the portal Mojedane.cz. It is also possible to pick up a paper form at the tax office and submit it there as well.

“In the case of real estate jointly owned by spouses, tax obligations are fulfilled by one of the spouses, as in such cases it is a joint tax obligation,” reminds tax expert Gabriela Ivanco from Mazars.

The tax is paid until the end of May

The real estate tax itself, which all owners of real estate and some plots of land have to pay, is due by the end of May. People usually receive information about the amount of tax from the tax office, either by receipt or in data boxes, if they have one set up.

“The calculated amount of real estate tax depends on several parameters, especially the type of property, the size of the property and the relevant coefficients of cities and municipalities,” adds Ivanco.

Cities and municipalities can adjust the coefficients. As a rule, however, the tax is higher in larger municipalities, while the highest is in the territory of the capital. For example, for an apartment with an area of ​​50 square meters in one part of Prague, 610 crowns are paid in tax, in another part of the city 1220 crowns.

Jana Jáčová reminds that for ordinary residential real estate, usually only a few hundred, at most a few thousand crowns are paid. “On the other hand, business complexes can pay hundreds of thousands in this tax,” says the expert.

Those whose annual tax is higher than five thousand can pay the tax on real estate in two installments, by the end of May and by the end of November.

What if one property has multiple owners? “They can choose from two options. Either the tax is declared and paid by one co-owner for everyone, or everyone files a return for themselves and everyone pays separately,” Jáčová explains, adding: “If you have a cooperative apartment, you don’t have to worry, you have to pay the tax cooperative as owner.”

Although in the vast majority the tax must be paid by the owner, for example on land encumbered by the right of construction, the tax is paid by the builder, in certain cases the user, lessee or so-called tenant, typically an entity that leases and cultivates agricultural land for profit.

“If you own a certain type of forest or body of water in which you do not raise fish, then this tax does not apply to you. In the same way, properties serving non-profit organizations, schools, museums, libraries, medical and social facilities and other types of real estate are exempt from it.” reminds Jáčová.

Compared to other countries, Czechs pay little

In the Czech Republic, income from the tax on real estate accounts for a little over one percent of the total income from all taxes, which in absolute terms represents something around 10 billion crowns.

“Compared to the countries of the European Union, the share of real estate tax revenue in total tax revenue is one of the lowest. In 2019, it was 0.5 percent, while in the EU this share was three percent,” points out Jan Jelínek from V4 Group.

According to him, it is understandable that at a time when the state is running a high state budget deficit, it will look for ways to increase the income part of the state budget, and the idea of ​​increasing the tax on real estate is being proposed.

“However, it does not necessarily have to be about changes to the law on real estate tax. It would be sufficient to use the powers of municipalities when determining coefficients, taking into account that the revenue from real estate tax is the income of municipal budgets,” suggests the tax expert.

According to Jelínek, if the municipalities use the option to move the coefficient to the maximum possible amount, the tax on immovable property could increase to 43.6 billion crowns, which would represent 4.6 percent of the total tax revenue.

He reminds that municipalities have the possibility to influence the amount of the tax through
the coefficient, which is determined by the number of inhabitants, the coefficient, which is set at a value of 1.5, and the so-called local coefficient, which the municipality can set in the range of values ​​from 1.1 to 5. “For example, in 2019, out of the total number of 6,258 municipalities only 1,988 municipalities have at least one coefficient, i.e. 31.8 percent,” concludes Jelínek.