Zero Inheritance Tax – another good reason to invest in real estate in Czech Republic

posted 21 Jun 2017, 02:52 by Conbiz Info Center   [ updated 21 Jun 2017, 03:24 ]

Zero Inheritance Tax – another good reason to invest in real estate in Czech Republic 


We have already described, in previous articles, the reasons why purchase of rental and other real estate properties in Czech Republic can be incredibly lucrative investment. Here are some useful posts on this topic:

In this post we introduce another good reason for purchasing rental property in Czech Republic – the zero inheritance tax. The Inheritance tax is simply a tax imposed on a property inherited from an individual who passed away. Usually the sum of inheritance tax is calculated on the basis of the overall value of inherited property.

In the Czech Republic, since 2014, the inheritance tax has been abolished. This relatively new legislation is very beneficial for real estate investors whose purpose includes providing a secure future for their offspring. Why? Because owners of real estate located in the Czech Republic will never have to worry about inheritance taxes paid by their children (or other relatives) after they pass away.

How to minimize costs of inheritance procedure in Czech Republic

You already know that inherited property in Czech Republic is free of taxation. So perhaps you are wondering whether there are any other hidden costs for inheriting real estate in Czech Republic. Well, there can be costs related to inheritance procedure to which the inherited real estate is subject. But if you know how to make use of existing Czech legislation, these costs can be minimized, and effectively eliminated. Here is how to do it.

In the Czech Republic any property, prior to being legally inherited by the beneficiary, is subject to inheritance procedure performed by a public notary. The beneficiary has a legal obligation to pay the notary compensation after the inheritance procedure is concluded. This compensation is calculated on the basis of the estimated value of the inherited property (e.g. on the basis of the value of an inherited house set by professional state assesor). Accordingly, it is highly recommended that owners transfer their real estate to their beneficiaries as a gift in life, so that hey might decrease the valuation of the inheritance and consequent financial compensation to the notaries. According to Czech legislation immediate family members may receive gifts, including real estate, free of tax.

How to sell inherited real estate without paying income tax

Even though inherited real estate is not subject to inheritance taxes, it is subject to income taxes after being sold by the beneficiary. Normally, capital gains on the sale of real estate property are taxed as income in Czech Republic. There is, however, an exception - if the owner has held the real estate for at least 5 years before sale, income from transaction is not subject to income tax. If the beneficiary wishes to sell inherited real estate, this time period of 5 years is shortened by the period of time which the testator possessed the property prior to his death. For example, if the testator possessed a house for 2 years prior to his death, the beneficiary has to possess it for at least for 3 additional years prior to selling it to avoid income taxes.

Inherited real estate in Czech taxation system

Here is a short overview of taxation related to inherited real estate property in Czech Republic:
  • Inheritance tax. Taxation on inherited property was abolished in 2014.
  • Real estate tax. The beneficiary shall submit tax return concerning inherited real estate upon the end of January in the year following his registeration as a new real estate owner in the Czech Republic real estate cadastre (as a result of inheritance procedure). This will be the first year in which the beneficiary pays annual real estate tax.
  • Real estate acquisition tax. There is no real estate acquisition tax imposed on inherited property. This tax has, since 2016 been levied on the buyer after he acquires the real estate property by purchase.
  • Income tax. There is no income tax imposed on inherited property. However the beneficiary would be liable for payment of income tax, if he decides to sell inherited property prior to the passage of 5 years since purchase by the testator (as described above).

Note: you can find detailed information about all type of taxes mentioned above on our website.

As you can see, after you purchase a real estate in Czech Republic, you don´t need to be afraid of unpleasant surprises in regards to taxes in future. And neither do your family.

Investing in real estate in Czech Republic is a very attractive business but also very complicated, if you are not a local. We can help. Read our insights gained from our personal experience on Czech real estate market. And if you want to get started investing in Czech real estate fast, directly contact our consultants.


What should you take into account when purchasing an Airbnb apartment in Prague?

posted 14 Jun 2017, 00:35 by Conbiz Info Center   [ updated 20 Jun 2017, 13:00 ]

What should you take into account when purchasing an Airbnb apartment in Prague? 

In our previous article about Airbnb we revealed a well-known secret to you: renting out apartments via Airbnb results in a higher return in investment than purchasing apartments for long term rentals. In Prague renting out assets to serve Airbnb is considered very popular for two reasons:

  1. Unlike other places in the world, renting apartments in Prague through Airbnb is completely legal
  2. Tourist use of Airbnb apartments only increases from month to month.

But with the increased demand also comes increased competition. Therefore, in order, to be placed high in the Airbnb site you must be defined as a Superhost- in order to receive this brand it must meet the following criteria:

  • The apartment must have a track record of being rented out at least 10 times via Airbnb
  • The apartment must have a 90% response rating of the residential experience in the apartment.
  • Most of the responses (over 80%) must be at a 5 star level.
  • No cancellations were registered after reserving the apartment
In addition, by virtue of being “Superhosts” you will receive benefits such as: a 100$ coupon for hosting in another country, payment of a very lower commission in compared to other Airbnb apartments- and sometimes also a professional photography of the apartments by one of the Airbnb Photographers.

So how do you do it?

Tip 1- location, location, location

Select an apartment in a god touristic location. In Prague this includes the following locations: close to the Old Town Square (square where the Prague astronomical clock are), by the Czech Opera house, adjacent to the Municipal House, on the riverbanks, near the Prague Castle or by the Charles Bridge. Furthermore, note that proximity to public transportation stations, for example the metro, the tram or the bus stations will only increase the value of your real estate property.

Tip 2- industrial espionage

Tourists love renovated and well-designed apartments. Visit apartments in Prague whose owners are defined on Airbnb as Superhosts and do a little research. How does their apartment look? What have they done to win the sought after title? What was written in their reviews? For example : if a given apartment won high grades thanks to a coffee machine or parquet floors- go for it. In fact, a very small investment is sufficient to transform your apartment into a smashing successes.

Tip 3 – Management Company

In order to retain the attractiveness of the apartment over time, you must select a good management company that specializes in this type of asset. The reason for this is that this is a unique rental property which requires a unique style of management, including, for example, cleaning after every short rental period, management of the guestbook, damage control and repair and so forth. In Prague, these management companies charge 20-30% of your profits but you will still be left with more than enough profits in hand- a good and well managed Airbnb rental apartment generates a return on investment of between 8-12 percent a year.

Are you considering purchasing an apartment? Please make use of our experience.


Real estate experts estimate that the price of apartments in the Czech Republic will rise by 10% by the end of 2017

posted 29 May 2017, 01:21 by Conbiz Info Center   [ updated 29 May 2017, 01:22 ]

Real estate experts estimate that the price of apartments in the Czech Republic will rise by 10% by the end of 2017

If the economy of the Czech Republic maintains its positive trend, the Czech Republic real estate market is projected to grow by 10% until the end of 2017 and by a further 7.5% in 2018. These findings are the result of a study performed by the Real Estate Market Development Association. This study included some 70 leading experts in the field of real estate in the Czech Republic. The experts wrote in the report that changes in the law have an impact on residential loans. The toughening conditions for approving mortgages promulgated by the Czech Republic Central Bank have a moderating effect on the rate of the real estate price rise.

Nonetheless, the prices of apartments in the Czech Republic are rising sharply, particularly in the cities of Prague and Brno. In Prague the apartment prices have already exceeded the peak prices of 2008, prior to the economic crisis. For example, new apartments in Prague experienced a double digit rise in 2016 and the average price for square meter is 75,000 Czech Coronas. According to the opinion of a senior analyst in- Cenovamapa, the new apartment prices serve as a gauge for the market situation. They are first to rise when the market is expanding and first to decline when the market shrinks.

The primary reason for the projected price rises is the low interest rates on the mortgages that resulted in a rise in demand. A report by the Real Estate Market Development Association that was recently published was written by experts in the central bank of the Czech Republic. In fact, the projections regarding the rise of real estate prices (10% in- 2017 and- 7.5% in 2018) are based on the projections of these experts.

Another reason for the rise in real estate prices is the population growth in Prague. According to the demographic projections, the population of Prague is projected to grow by an additional 93,000 people by 2030 and 82,400 new apartments will be required. To meet this demand it was necessary to complete the construction of 5,500 apartments this year. In practice, however, only the construction of 4,300 was completed over the past few years.

Nonetheless, outside of Prague the situation is completely different and prices remain 2% below their peak level in 2008.

Are you interested in purchasing Real estate in Prague? Contact us.


Trends in Prague’s 2016 real estate market

posted 9 May 2017, 05:58 by Conbiz Info Center   [ updated 9 May 2017, 06:01 ]

Trends in Prague’s 2016 real estate market 

The year 2016 is considered by experts as the start of Prague’s golden age of real estate.

The most attractive areas to invest in in Prague are presently Prague 1, 2, 3, 5, 9, and – 13. In these locations, and particularly in Prague 1,2 and the Vinohrady neighborhood there is no projection of a future decrease in prices- on the contrary, they are projected to rise. There are a number of additional districts that are also considered to be attractive for investment.

  • Prague 6 is considered a good and safe investment, particularly the Stromovka neighborhood.
  • Prague 7 is considered to be a good investment in two respects: the apartments in this district are large and spacious and there is quite a bit of new construction there.
  • Prague 10 is attractive for investors for two reasons: the district has both a unique ambience and relatively low prices.

In 2017 the Czech purchase tax was placed on the buyers, rather than the sellers, which encouraged the sale of real estate assets and further ballooned the real estate market. In 2015 18% more new real estate assets were sold than in 2014, particularly apartments and ground level houses in the suburbs of the cities. This trend is expected to increase. The demand for real estate is a product of the Czech macro-economic situation (for example, parking space shortages in the center of the cities) and the low interest rates on mortgages.

As a result, apartment process in Prague are continuing to rise. The price of an average apartment in Prague was 3.5% higher in 2016 compared to 2015, and 7% higher compared to 2015. The expectation for 2018 is for prices to rise by an additional 12-15%, particularly midrange budget apartments in the center of the city that are walking distance away from the central streets and the shopping centers.

The lease rates in Prague have also risen. For example, in the first 3 months of 2015 leases had risen by 160,000 Czech Korunas per square meter and have reached an historic peak- 500,000 Czech Korunas for square meter. As Prague is a central European city businesswise, the prices of leasing commercial real estate assets in central business districts and malls is rising, particularly in Prague and the other major cities in the Czech Republic.

For additional information on real estate investment opportunities in Prague please contact us and we will be happy to advise you.


Investment in real estate in the Nusle neighborhood in Prague 4

posted 5 May 2017, 04:24 by Conbiz Info Center   [ updated 5 May 2017, 04:50 ]

Investment in real estate in the Nusle neighborhood in Prague 4


The real estate market in Prague has been in ferment over the past few years and for good cause. Many investors from different states are choosing to invest their money in purchasing real estate in the various districts of the Capital of the Czech Republic. One of the neighborhoods emerging as an attractive real estate target over the past few years is the Nusle neighborhood.

The Nusle neighborhood is located primarily in the Prague 4 and partially in the Prague 2 districts. It is adjacent to two neighborhoods: the Pankrác neighborhood abuts it on one side, and the Vinohrady neighborhood abuts it on the other. The considerable rise in the socioeconomic level of the population over the past years in those neighborhoods has brought about, among other outcomes, the rise in demand for apartments in the Nusle neighborhood and with it prices as well.

In fact, two real estate trends are developing in the Nusle neighborhood

  • Various projects for construction and expansion of assets: both residential apartment buildings and offices
  • Various infrastructure upgrade projects on the roads and sidewalks are taking place in order to render them more modern and accessible.

Nusle – then and now

Nusle began, in the 11th century, as a small remote village. Most of the current built up area was then farms and vineyards. There are several reasons this village developed into a desirable real estate target.

These include:

  • Transportation access – the neighborhood is relatively close to the center of the city. With private vehicles it is possible to reach downtown in only seven minutes. Public transportation, which includes both the tram line and the metro CC line crisscross the neighborhood and connect it to the center of the city. Furthermore, the neighborhood serves as a gateway for Prague to the suburbs and provincial centers such as Brno.
  • The streets of the neighborhood are particularly wide as a result of its rural history. Accordingly, the residents enjoy a village like atmosphere. In addition, the neighborhood has a number of parks that serve as green lungs such as, for example, Vyšehrad, and provide attractions for children such as, for example, Generála- Kutlvašra and- Jezerkaa.
  • The amount of houses built in the neighborhood is upwards trending. As of 2017 the neighborhood contains over 1500 buildings, most of them of excellent quality.
  • The neighborhood contains various tourist interest sites: the Nuselsky bridge, the town hall located in it since 1908, the Parish church, the Nusle brewery and the various squares of the neighborhood: the Ostrcilovo square and the main, Kutlvasr square.
  • The neighborhood contains a wide variety of sports facilities: basketball courts, ice skating rinks, soccer, football, athletics, volleyball and other facilities.
  • The neighborhood contains the Prague Conference Center and its upcoming expansion will greatly increase the value of property in tis proximity.
It is no wonder that the Nusle neighborhood is considered an excellent residential neighborhood in general and for young people in particular, especially young couples and students in the Charles University. 

Every reason to invest in real estate in the Nusle neighborhood.

It is no wonder that the Nusle neighborhood is a paradise for investors in real estate. On the one hand the real estate prices in the neighborhood are considered relatively inexpensive compared to the rest of Prague and on the other hand – the demand for real estate in the neighborhood and the value of apartments in it has steadily increased over the past few years.

The neighborhood has a plethora of apartments suitable for purchase for which one can receive up to 80% financing from Czech Republic banks. Thanks to its location, the neighborhood is suitable for purchase of remunerative assets on the long term. In addition, thanks to the advantages of the neighborhood, real estate assets in it will be leased quickly and provide a high yield on your investment.

For more details on investments in real estate in the Nusle neighborhood please contact us.


Young Americans are voting with their feet for Prague

posted 19 Mar 2017, 07:10 by Conbiz Info Center   [ updated 19 Mar 2017, 07:11 ]

Young Americans are voting with their feet for Prague 


The New York Times, the renowned U.S Newspaper, has surveyed the 20 most popular destinations for American Millennials in their twenties. Topping the list for Europe is Prague (ranked fifth amongst the most toured European cities). The New York Times outlines the reasons for this: The city is welcoming for young people and is famous for its excellent beer, much beloved by young Americans.

The paper claims that Prague is a magical city filled with energy and it especially recommends the Zizkov Quarter. The reason for this recommendation is that the rent in this quarter is considered low, and attractive for students, musicians and artists. The result is a quarter with a unique and free spirited atmosphere and a plethora of galleries, coffee houses and pubs beloved by those in their twenties.

Furthermore, the Zizkov quarter is considered to be a “young” site thanks to the presence of the University of Economics in this quarter, and its proximity to the center of the city. In fact, the quarter, though considered young in spirit is very close to the historical center of Prague- only 5-10 minutes away in public transportation. While the quarter has been considered to have bright prospects for many years now, it seems that the young Americans have only discovered it now.

The Odyssey paper has also investigated which 12 cities are most worthwhile visiting in your twenties. The paper ranked Prague at seventh place and claimed that living in the city was relatively inexpensive, that the culture of Prague was incredible and that it’s architecture was breathtaking. The paper recommends you visit the Lennon wall in Prague 1 to get a taste of the local free spirit, a spirit which remained unvanquished and unbowed even during the darkest periods of communist rule.

In another survey carried out by the travel agency Good Travel Young, Prague was ranked in the 15th place. The travel agency recommended that young people visit Prague as it is a perfect blend of architecture, history and old fashioned pleasure. The travel agency claims that architecture students will particularly enjoy the city because it has a wide variety of architectural styles: renaissance, baroque, Rococo, Ars-Nova and more.

Aside from the young American tourists projected to arrive in the city as a consequence of the publication of these studies, Prague already hosts 4 million tourists a year. You can, believe it or not, turn a profit on tourism in Prague by renting out an apartment for a short period of time in a Airbnb style. In Prague, unlike other cities worldwide, the municipality allows, and even encourages, renting out apartments in this manner.

For additional details on purchasing real estate in Prague for investment purposes please contact us.


The Czech Republic – the best country in the world to raise children

posted 19 Mar 2017, 07:02 by Conbiz Info Center   [ updated 19 Mar 2017, 07:02 ]

The Czech Republic – the best country in the world to raise children


The international organization InterNation carried out a study to determine which countries were best for the children of immigrants in 2016. The study was based on the reports and information provided by immigrants to 45 different countries. The study included 43 parameters including: education, access to leisure activities, cost of living and more. The parameters reviewed all fields of life starting with education and continuing to security and health. By the way, an immigrant was defined by the survey as anyone living and working out of the countries in which they were born. For example: high-tech workers, many of which live in the Czech Republic.

The survey found that in 2016 The Czech Republic was ranked second, and increase from being ranked 14th place in 2015. The significant rise in it’s ranking was achieved thanks to lower education costs in the country – 75% of the respondents thought that education in the Czech Republic was affordable. One of the most influential parameters was the fact that higher education in the Czech Republic was free if provided in the Czech Language. Still, the parameter holding back the Czech Republic from being ranked in the first place was the quality of education.

The survey also examined which states were the places easiest to successfully integrate work and family life and the results are as follows: the Czech Republic is ranked 11th out of 67 surveyed states. Finland, by the way, that was ranked first place in the field of raising children was not even included in this surfer, so that in the overall balance the Czech Republic is the best country in the world to raise children in.

Another survey carried out by InterNation ranked the Czech Republic 8th out of 67 states in the field of cost of living. This survey relied on information provided by 14,300 immigrants. According to the survey the costs of food, transportation and accommodations in the Czech Republic were significantly less expensive than those in other Western Countries and it has far greater possibilities for employment.

This study reinforces the results of other studies showing the Czech Republic to be an attractive state for multinational corporations, such as Google, Amazon, Siemens, Skype and other with branches in Prague. This final survey by InterNation indicates that the Czech Republic is not merely attractive financially but also has other advantages, such as in the field of raising children and in balancing work life with family life.

Are you considering moving the Czech Republic? Are you considering purchasing a property in Prague? We will be glad to advise you.


Israeli Innovation Visas

posted 2 Mar 2017, 02:47 by Conbiz Info Center   [ updated 2 Mar 2017, 02:52 ]

Israeli Innovation Visas: Start-up Nation is opening its door to talented foreign entrepreneurs from all over the world


Without any doubt one of the most precious assets of Israel is country`s start-up business culture. It is indeed a huge variety of supportive frameworks available for entrepreneurs from both government and private sector that makes Israeli economy one of the most innovative economies in the world. From high-tech start-ups to progressive neurotechnologies – Israel`s politics is to provide support to perspective innovations of all kinds to maintain position of country as a global leader of start-up innovations.

Recently Israeli officials aim to strengthen position of Israel as a global leader of innovations and start-up culture by enacting a new type of visas called the Innovation Visas. Innovation Visas are designed with a goal to become more than a mere administrative measure. They can be actually perceived rather as a complex program with many long-term benefits for entrepreneurs. Therefore entrepreneurs who are granted Innovation Visas can be seen rather as ‘participants’ than ‘visa holders’. Innovation Visas create suitable legal framework which motivates foreign entrepreneurs to develop their projects and ideas in their early stages directly in Israel. Israeli government expects that Innovation Visas will attract talented entrepreneurs with knowledge, experience and groundbreaking ideas from the entire world to work in Israel.

Israel's Innovation Authority

Whole framework of Innovation Visas has been in drafting process for more than one year. It supposed to be ready in the first half of this year. Concept of Innovation Visas was born in the offices of Israeli Innovation Authority. This public body was formerly known as the Office of the Chief Scientist of the Economy Ministry. The Authority is in charge of the nation’s innovation policies and aims to accumulate resources and create good conditions to promote the nation’s innovative ecosystem. Not long ago the CEO of Apple’s Israel activities, Aharon Aharon, has been appointed to lead Israel’s Innovation Authority.

Why is it worth to apply for Israeli Innovation Visas?

Innovation Visas will enable the entrepreneurs to stay in Israel for 24 months while receiving different kinds of support from both public and private organizations previously only available to resident entrepreneurs. Also to each participant one mentor will be assigned (officially named as ‘Landing Pads’). Mentor can be an experienced organization which role will be to help inventors with development of their ideas, at a pre-seed stage. Other important task of a mentor will be to introduce a participant to key business players in particular industry or investors. Mentor will naturally try to connect a participant with potential business partners. Selection process of mentors - Landing Pads is still running. Companies will be chosen carefully by Israeli Innovation Authority. After Landing Pads are selected and listed on the officialpages of Innovation Visa program, foreign entrepreneurs may apply to the relevant Landing Pads expertise of which matches with their projects.

Another major initiative related to Innovation Visas program is opening the Israel`s Innovation Authority’s Tnufa program for participants. Tnufa program was designed by the Innovation Authority specifically to help inventors with great ideas at a pre-seed stage. Successful Innovation Visa applicants are entitled to receive a grant up to 85% of approved expenses associated with such services as prototyping, registering a patent, and designing a business plan (maximum threshold of 1 grant is 50,000 USD).

From Innovation Visa to Expert Visas

If Innovation Visas participants decide to transform their early stage business ideas into business reality, for example by establishing company in Israel and launching their products on Israeli market or by further development of an idea in Israeli company, they would be eligible to apply for the Expert Visa, which would give them full access to Israeli innovation grant programs. Expert Visa also enables their holders to reside in Israel for next 5 years.

Israel's Innovation Visa – FAQs

When can I submit my application for Innovation Visa?

The program should be open for applications in early 2017 when the screening process for Landing Pads (mentors) is completed.

Do Innovation Visas serve also as work permit?

Innovation Visa are not a work permit. Their purpose is different and that is to enable more talented innovators to live and develop their innovative ideas in supportive environment directly in Israel. However, after 2 years on an Israeli Innovation Visa, if an entrepreneur desires to continue to develop the approved project while employed or by starting a new business in Israel as a shareholder, he can apply for an Expert Visa which are connected with work permit.

Does the Israeli Innovation Visa apply also to family members?

Not directly. If an entrepreneur wishes to come to Israel with immediate family members (spouse and children up to the age of 18), he must submit applications for them in accordance with Tourist Reservation procedures.

Do you want to find out more about Israeli Innovation Visas?

Do not hesitate and contact our Conbiz Information Center. Our consultants based in Israel are native speakers familiar with Israeli administrative systems and processes. Therefore they can help you with your visa application or with other way of entering Israeli market.


All you need to know about real estate tax in Czech Republic

posted 21 Feb 2017, 03:05 by Conbiz Info Center   [ updated 27 Feb 2017, 00:41 ]

All you need to know about real estate tax in Czech Republic 

prague

Owners of any piece of privately-owned real estate in Czech Republic have duty to pay every year real estate tax. This property tax has one major difference from other types of taxes levied in Czech Republic – it must be paid in advance (always for upcoming year). So what exactly is this real estate tax in Czech Republic about? How is it calculated? And how it impacts finances of real estate owner?

I. Real estate tax model in Czech Republic

Real estate tax belongs to the group of so called property taxes. Generally speaking, property taxes are taxes that are levied by municipality or state on possessions. In Czech Republic the most important property taxes are levied on different types of privately-owned real estate (f. e. lots, flats, houses) and heritages. In particular, subjects of Czech real estate tax are lots (lands) registered in Czech real estate cadastre, completed or occupied buildings, apartments (flats) and other engineer constructions as defined in Act about the Cadastre of Real Estate (Cadastral Act). Real estate tax is assessed locally by Czech municipalities and its purpose is to raise operating revenue for particular city or town where real estate is located. But do not confuse real estate tax with another property tax - real estate transfer tax which equals to 4% of property`s value and is paid by buyer after he purchases a real estate.

II. Real estate tax in Czech Republic - how much do I have to pay?

Property taxes are almost always based on the value of a possession. Real estate tax is not an exception. How is real estate tax calculated? If your real estate property is located in an attractive area close to downtown, you will pay higher tax. But you can stay calm since Czech real estate tax is certainly not a budget`s destroyer – its amount usually oscillates in hundreds of Czech korunas (CZK).

Real estate tax amount is result of multiplying your real estate`s area by particular tax rates and coefficients. Here are basic steps to calculate approximate amount of your real estate tax:

1) Identify properly size of your real estate property – this is your tax base.

Your real estate's size is a tax base from which real estate tax is calculated. In case that you are owner of an apartment which also includes balcony, loggia, terrace or cellar, make sure that you don` t include this areas into apartment` s total square meter for the purpose of tax base`s determination (see more further in chapter Specific questions regarding real estate taxation in Czech Republic).

2) Multiply tax base by particular tax rate.

Once you identified your real estate`s size you also determined a tax base of real estate tax. Now you need to multiply area of your real estate by particular tax rate. Real estate tax rates are assessed by Czech Tax law according to type of real estate. For example tax rate for apartment in Czech Republic is currently 2 CZK per square meter. Minimal tax rate for house in Czech Republic is also 2 CZK per square meter. However to this rate also rate 0,75 for each house`s floor above ground must be added.

For example your house has 1 floor above ground. Your tax rate will be 2+0,75=2,75 per sq. m.

3) Apply municipality coefficient set by Czech Tax law.

In case that your subject of real estate tax is a house, apartment, non-residential apartment (f. e. office) or a building lot, you need to apply special municipality coefficient set up by the Czech Tax law and sometimes also local municipal tax rules (sometimes there are 2 coefficients). Amount you got from step 2 must be multiplied by this coefficient or coefficients. Figure of the coefficient depends on the town where your real estate is located and its population. For instance municipality coefficient in Prague is currently 5, in Pilsen 3,5.

4) If subject of real estate tax is an apartment, apply also coefficient for real estates with common premises.

If you own an apartment you have to multiply figure you got from steps 2 and 3 also by coefficient currently equal to 1,2. This coefficient substitutes your shares of common premises in the building where your apartment is located (f. e. building`s corridors, halls, stairs, etc.).

Example of calculating real estate tax of apartment in Czech Republic:

For example, if you own an apartment in Prague with area 50 m2, your tax base is 50. Multiply this amount by (i) tax rate for apartment – currently 2 CZK per sq. m., (ii) municipality coefficient – currently 5 in Prague and (iii) coefficient of common premises – currently 1,2. Calculation: 50x2x5x1,2 = 600CZK. Your real estate tax is 600 Czech korunas.

III. Tax return for real estate tax


Good news is that you don`t need to fill tax reports for your real estate property every single year. You have duty to submit tax return only once – in year which follows after year when you were registered as new real estate owner in Czech real estate cadastre. Deadline for submitting tax return is always the end of January.

Example: Let’s say you concluded a purchase contract to purchase an apartment in February, 2017. Assuming that you will be registered in cadastre as a new owner in April 2017 you would have duty to fill tax return next year – till 31st of January 2018.

In years which follow after year when you submitted your first tax return you don` t need to fill other tax returns. Financial office will only notify you every year to pay particular amount of real estate tax (in amount calculated in your tax return). The only case when you have to fill tax return again is when you make a significant changes to your real estate since this affects your real estate tax amount (for example you sell your flat, increase area of your house, etc.).

IV. Specific questions regarding real estate taxation in Czech Republic

I own more than one real estate property in Czech Republic. Where do I have to submit tax return?

In general tax return must be submitted to a competent financial office according to a place where your real estate is located. If you own more real estate properties in the same financial district you can include them in one cumulative tax return which you submit to competent financial office in financial district where your properties are located. However if you own real estate properties located in different financial districts you have to draft tax returns for each real estate separately and submit them to competent financial offices in financial districts where your real estate properties are located.

I own property with my spouse in undivided co-ownership of spouses. Do we have to submit 2 tax returns?

No, in such a case only one of you submits a tax return. The one who submits a tax return will represent both of you in this matter.

Do I have to include area of balcony, loggia or cellar into a tax base?

Balcony, loggia and cellar are according to the Tax law considered as accessory premises of a real estate. Therefore you shouldn`t include their areas into a tax base in your tax return.

Do I have to fill separate tax return for garage?

If your garage was in purchase contract defined as your right to use a certain space of building as a parking lot, you shouldn`t submit separate tax return for garage. Other situation is if your garage was purchased as separate non-residential premise. In this case you have to include garage in tax return together with your apartment.

I inherited a real estate. When do I have to submit tax return?

Have you inherited a house or an apartment in Czech Republic? In such a case you have to firstly find out whether inheritance procedure subject of which is this property, was finished by final decision. You have duty to submit tax return in the year which follows after year when your inheritance decision become final. Mind that if you inherit a property in Czech Republic, you won` t become new registered owner in Czech real estate cadastre automatically. You have to submit an application to real estate cadastre together with a final inheritance decision of Czech notary public or court.

Do you have other inquiries regarding real estate taxation in Czech Republic? Or you are considering investing into real estates in Czech Republic? Do you already own a real estate in Czech Republic and have some question related to its property management? Our team of consultants is ready to help you with all these inquiries. Contact us here.


Air traffic volume in the Czech Republic is on the rise

posted 12 Feb 2017, 00:25 by Conbiz Info Center   [ updated 12 Feb 2017, 00:26 ]

Air traffic volume in the Czech Republic is on the rise


Aerial transport in the Czech Republic is developing and maintaining the highest levels of safety, precision and sustainability. According to an article published in the Air Traffic Management, the year 2016 was the busiest year yet in the country in terms of air traffic. According to the ANS CR (Aerial Navigation Service of the Czech Republic) This is the third consecutive year in which the air traffic records over the Czech Republic has been surpass.

In comparison to the previous year, 2015 air traffic had increased by 6.95%, particularly in the Prague airport that reached capacity: 136,419 flights which landed and took off from it. This represents a rise of 6.4% in comparison to 2015. In fact, in 2016 a rise of over 200% took place in air traffic over the Czech Republic in comparison to 2002.

The busiest month aerially speaking in the Czech Republic was July, with 87,583 flights, of which 3,018 on the busiest day- the 30th of July. The amount of passengers passing through Czech airports (arrivals and departures) reached 130 million people in 2016.

The aim of the Czech Aerial Navigation Service is to provide maximal aerial safety in the air space of the Czech Republic. The CEO of the company, Yan Klas, claims that in 206 this aim has been successfully achieved in three parameters:

  1. The European standard in regard to flight delay has been met. In the Czech Republic, the average delay was 0.01 minutes, whereas the European standard is 0.09 minutes.
  2. An increase in the number of services provided. In 2016, the ANS CR provided 7.9 more ground services in comparison to the previous year. They handled aircraft with greater mileage and handled more cargo.
  3. An improvement in the organization and safety of the air space and the flight paths over the Czech Republic since February 2015. This improvement has brought about greater safety, led to parsimony in fuel and greatly reduced the environmental impact.

These parameters indicate that the field of aviation in the Czech Republic is a growing and developing field of business on the one hand, and one that is secure on the other hand. This is yet another indication of the Czech Republic being an attractive and secure destination for economic investment in various fields of business. To receive additional details of safe business opportunities in the Czech Republic in developing economic fields, please contact us.


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