When you buy property in Czechia in 2026 you pay no transfer tax: the 4 % acquisition tax was abolished in 2020. As an owner you pay the yearly property tax, you can deduct up to CZK 150,000 of mortgage interest a year on your own home, and a sale is tax-free after 10 years of ownership or 2 years of living there.
The yearly property tax (daň z nemovitých věcí) on a 60 m² flat in Prague comes to roughly CZK 1,150 before the inflation coefficient and any local coefficient. The interest deduction cuts your income tax by up to CZK 22,500 a year.
Money is lost mainly on letting and on selling before the holding period is up. There the outcome depends on choices you can make only once a year, or only once at all. How to claim the mortgage interest tax deduction step by step is covered in a separate article.
Is there a property transfer tax in Czechia?
No. The 4 % tax on the acquisition of immovable property was abolished in 2020, so in 2026 neither buyer nor seller pays it; on a new build the VAT is already in the price. The other taxes, by what you do with the property:
| Situation | Tax | Rate or limit | Deadline | Source |
|---|---|---|---|---|
| Purchase | transfer tax abolished; VAT included in the price of a new build | VAT 12 % on a flat up to 120 m² or a house up to 350 m², otherwise 21 % (paid by the developer) | none: VAT is part of the purchase price | VAT Act |
| Ownership | property tax | depends on floor area, size of the municipality and the local coefficient | return by 31 January of the year after acquisition; payment by 31 May, above CZK 5,000 in two instalments by 31 May and 30 November | § 13a and 15 of Act No. 338/1992 Coll. |
| Living there on a mortgage | interest deduction from income tax | up to CZK 150,000 off the tax base, i.e. up to CZK 22,500 off the tax | annual payroll reconciliation, or a tax return by 1 April (a month later if filed electronically, 1 July with a tax adviser) | § 15 of the Income Tax Act |
| Letting | income tax | 15 % of the profit; actual expenses, or 30 % (max. CZK 600,000) | tax return for every year by 1 April of the following year (a month later electronically, 1 July with an adviser) | § 9 of the Income Tax Act |
| Sale | income tax, unless an exemption applies | 15 % of the gain, partly 23 % on high incomes | tax return for the year of sale, same deadlines; exempt income above CZK 5 million must be reported to the tax office by the return deadline | § 4, 10 and 38v of the Income Tax Act |
The bank deals with none of this; it simply sends you a certificate of the interest paid in January. Everything else is between you and the tax office.
How much property tax do you pay each year?
The base for the annual property tax on a flat is its floor area from the land registry multiplied by a coefficient of 1.22 if the flat is in an apartment building and includes a share of the land, otherwise 1.20 (§ 10(3) of Act No. 338/1992 Coll.). The rate is CZK 3.50 per m² (§ 11), multiplied by a coefficient for the size of the municipality, from 1.0 in a village of up to 1,000 inhabitants to 4.5 in Prague. Then come the inflation coefficient, which follows consumer prices since May 2023 (§ 11f), and the local coefficient, which a municipality can set anywhere from 0.5 to 5.0 (§ 12).
A 60 m² flat in Prague therefore comes to 60 × 1.22 = 73.2 m² × CZK 3.50 × 4.5 ≈ CZK 1,153 a year before the inflation and local coefficients. The tax roughly doubled from 2024, and municipalities can multiply it further through the local coefficient, so look up your municipality's ordinance.
What counts is the position on 1 January. If you buy a flat in 2026, you file the return by 31 January 2027 and pay for the first time for 2027. Tax of up to CZK 5,000 is due in one payment by 31 May (§ 15). Co-owners are liable for it jointly and severally.
The interest deduction, as long as you live there
Interest on a mortgage for your own home comes off your income tax base: up to CZK 150,000 a year for housing acquired from 1 January 2021 and up to CZK 300,000 for older purchases. At the 15 % tax rate that is worth up to CZK 22,500 a year. A CZK 4,000,000 mortgage at 5.00 % uses up the whole limit in the first years; in year one you pay CZK 198,127 in interest.
The entitlement ends with the year in which the flat stops being your home or your family's. There is no deduction for a flat you let out, nor for a holiday cottage.
Letting: flat rate or actual expenses?
Rental income is taxed under § 9 of the Income Tax Act. You claim expenses either at their actual amount, which includes mortgage interest and depreciation, or as a flat 30 % of income, capped at CZK 600,000. The flat rate covers every expense, and once chosen for a year it cannot be changed retrospectively (§ 9(4)). A full calculation including depreciation is in our guide to tax on rental income; the example below leaves depreciation out.
Worked through on a let flat (assumptions: mortgage of CZK 4,000,000 over 25 years at 5.00 %, annuity payment CZK 23,384; rent of CZK 20,000 a month, i.e. CZK 240,000 a year; insurance, property tax and minor repairs CZK 20,000 a year; 15 % tax rate).
- 30 % flat rate: expenses CZK 72,000, tax base CZK 168,000, tax CZK 25,200.
- Actual expenses: first-year interest by the annuity formula of CZK 198,127 plus CZK 20,000 of other costs. The tax base falls to CZK 21,873 and the tax to CZK 3,281; depreciation would bring it down further.
The gap is almost CZK 22,000 a year. Interest falls every year, though (to CZK 193,907 in year two), so the edge of actual expenses gradually wears off.
Actual expenses mean keeping records of income, costs and depreciated assets (§ 9(6)). Banks also treat a loan for a flat to let as an investment loan, for which the ČNB has recommended an LTV of no more than 70 % since 1 April 2026. More in Mortgage for an investment property and A mortgaged flat on Airbnb.
When is selling a flat tax-free?
- You have lived there for at least 2 years immediately before the sale (§ 4(1)(a)). For a flat in spouses' community property it is enough if one of them meets the condition.
- You lived there for less time, but you put the money into your own housing by the end of the year after the sale (§ 4b(2)). It also counts if you had already spent a matching amount on housing in the year before the sale.
- Holding period: more than 10 years pass between acquisition and sale (§ 4(1)(b)), or 5 years for property acquired before 2021. With an inheritance from a direct relative or a spouse, the time the deceased owned the flat counts too. Neither settling community property nor the creation of units interrupts the period (§ 4(2)).
If none of that applies, you pay tax on the difference between the sale price and the acquisition price plus documented expenses. A flat bought in 2022 for CZK 4,500,000, let out and sold in 2026 for CZK 5,400,000 (an assumption), makes a gain of CZK 900,000. After deducting, say, CZK 100,000 for the agent's commission and legal fees, the tax base is CZK 800,000 and the tax CZK 120,000. Exempt income above CZK 5,000,000 has to be reported to the tax office unless the office can find it in public registers (§ 38v).
How a mortgaged flat is sold is described in Selling a property with a mortgage. Our calculator works out what you keep after repaying the mortgage and what the property sale tax will be.
Do you pay tax when you sell a gifted property?
You do, unless the sale meets one of the exemptions. A gifted flat follows the same rules as a bought one, with one difference from an inheritance: the 10-year holding period runs only from the date of the gift. The law does not count the time the donor owned the flat; it adds the previous owner's time only for an inheritance from a direct relative or a spouse (§ 4(1)(b) of the Income Tax Act). Both exemptions, for two years of living there and for using the money for your own housing, apply to a gift as well.
The gift itself is exempt from income tax if it comes from a direct relative, a sibling or a spouse (§ 10(3)(c)). If you sell a gifted flat earlier and no exemption applies, you pay tax on the gain: from the sale price you deduct the price set under the Valuation Act on the day of the gift, plus documented costs such as repairs and the sale itself (§ 10(5)).
Sources
- Act No. 586/1992 Coll., on income taxes, § 4(1)(a) and (b), § 4(2), § 4b(2), § 9(4), § 15(3) and (4), § 38v
- Act No. 338/1992 Coll., on immovable property tax, § 10, 11, 11f, 12, 13a and 15
- Financial Administration of the Czech Republic – immovable property tax, deadlines and local coefficients
- ČNB – recommendation for investment housing loans from 1 April 2026 (LTV 70 %, DTI 7)