Immovable property acquisition taxation in Czech Republic

Prague, 3 October 2016

On 1 June 2016, the Czech Parliament issued a tax bill that resulted in a change to the levied immovable property acquisition tax. Usually, in the most frequent cases (sales contracts), the tax was payable by the transferor (seller), although the parties may contractually agree that the tax should be paid by the acquirer (buyer). According to the proposed amendment, the tax will be paid by the acquirer (buyer) in all cases.

Therefore, there will no longer be any choice regarding who pays the tax. The tax rate of 4% on the taxable consideration does not change. However, the tax base calculation will be different in some cases with respect to the exchange of property.

The registration date of the ownership title in the land register or the effective date of the contract in case such contracts are not required to be registered are criteria in raising tax events. For example, the tax is due for sales contracts when they are registered in the land registry.