A self-employed person (OSVČ) gets a mortgage on the same regulatory terms as an employee: a loan of at most 80 % of the property's value, or 90 % if at least one applicant is under 36. The only difference is what income the bank sees. Turnover does not interest it. It takes the partial tax base from your last one or two tax returns, deducts the tax and divides by twelve.
How you claim expenses therefore largely decides how much you can borrow. A graphic designer with business income of CZK 1,500,000 a year reaches about CZK 3.8 million with 60 % flat-rate expenses, but only CZK 2.6 million with actual expenses of CZK 1,100,000. We assume a rate of 5.00 %, a 30-year term and the banks' usual internal threshold of 45 % of net income for repayments; the full calculation is below.
How does a Czech bank count self-employed income?
From profit, not turnover, whether you are a freelancer or run a trade on a trade licence (živnostenský list). The starting point is the partial tax base from business under § 7 of the Income Tax Act, in other words income minus expenses. Most banks deduct the tax shown in the return and spread the result over twelve months. Some also deduct the social and health insurance you paid. Others add depreciation back, since that money never actually left the business. Between these methods, the same tax return can produce loan ceilings hundreds of thousands of crowns apart.
How many returns a bank wants varies. Some are satisfied with one covering a full calendar year, most prefer to see two. With two years they usually take the average, and if the second year fell noticeably they use only the lower figure. A rising trend tells the bank you are stable; a drop of a third is a question you will have to answer.
You also need to be clear of arrears. Unpaid income tax, social or health insurance means rejection at most banks regardless of income, and some ask for confirmation from the tax office and the insurers up front.
What does the bank see with flat-rate expenses, actual expenses or the flat-rate tax?
| Regime | What the bank counts as income | Example: turnover CZK 1.5 million |
|---|---|---|
| Flat-rate expenses (paušální výdaje) of 80 % (crafts, agriculture; expenses capped at CZK 1,600,000) | the tax base, i.e. income minus the flat-rate allowance, less tax, divided by 12 | tax base CZK 300,000, CZK 23,820 a month for the bank, ceiling ≈ CZK 2.0 million |
| Flat-rate expenses of 60 % (other trades; capped at CZK 1,200,000) | the same calculation | tax base CZK 600,000, CZK 45,070 a month, ceiling ≈ CZK 3.78 million |
| Flat-rate expenses of 40 % (other self-employment, e.g. liberal professions; capped at CZK 800,000) | the same calculation | tax base CZK 900,000, CZK 66,320 a month, ceiling ≈ CZK 5.56 million |
| Flat-rate expenses of 30 % (renting business assets; capped at CZK 600,000) | the same calculation | tax base CZK 1,050,000, CZK 76,945 a month, ceiling ≈ CZK 6.45 million |
| Actual expenses (tax records or full accounts) | the tax base after all costs, less tax, divided by 12; buying a car or equipment in the last year knocks it down | with expenses of CZK 1,100,000: tax base CZK 400,000, CZK 30,903 a month, ceiling ≈ CZK 2.59 million |
| Flat-rate tax regime (paušální daň) | no return is filed; some banks estimate income from account turnover with their own coefficient, others turn such applicants down | at a model 30 % of turnover: CZK 37,500 a month, ceiling ≈ CZK 3.14 million |
The ceilings assume a 30-year mortgage at 5.00 %, the banks’ usual internal threshold of 45 % of income for repayments, 15 % tax after the basic taxpayer credit of CZK 30,840 and no other loans. The percentages and caps are set by § 7(7) of the Income Tax Act, and which one applies depends on your activity. If you run a business alongside a job, the bank adds your salary from payslips to the tax base from the business, but the business only counts once a return has been filed.
Which regime works out better depends on your costs. In services with low costs, a programmer or a translator for example, the flat-rate allowance cuts the tax base more than actual expenses would, so you look poorer to the bank than you are. In a trade with expensive materials it is often the other way round. The bank doesn't care how you arrived at the figure; it only sees the result.
The flat-rate tax is a special case. No return is filed, so the bank has nothing to start from. Banks that do accept people in this regime estimate income from turnover shown on bank statements, using their own coefficient.
One turnover, three different ceilings
Jana, a freelance graphic designer (business income of CZK 1,500,000 for 2025; a 30-year mortgage at 5.00 %, i.e. an annuity repayment of CZK 5,368 per million; the bank allows at most 45 % of recognised income for repayments; Jana has no other loans):
- 60 % flat-rate expenses: expenses CZK 900,000, tax base CZK 600,000, and after the basic taxpayer credit of CZK 30,840 the tax is CZK 59,160. The bank recognises (600,000 − 59,160) / 12 = CZK 45,070 a month, CZK 20,282 for the repayment, a loan of at most ≈ CZK 3.78 million.
- Actual expenses of CZK 1,100,000, because Jana bought a car and fitted out her studio: tax base CZK 400,000, tax CZK 29,160, recognised income CZK 30,903, repayment CZK 13,906, a loan of at most ≈ CZK 2.59 million.
- Flat-rate tax: no return is filed. Assume a bank that recognises 30 % of turnover, i.e. CZK 37,500 a month. Repayment CZK 16,875, a loan of at most ≈ CZK 3.14 million.
By claiming actual expenses Jana saved CZK 30,000 in tax. It cut her mortgage ceiling by CZK 1.19 million. The 30 % share under the flat-rate tax is only a model figure: every bank uses a different coefficient, and some don't accept the flat-rate tax at all.
From these figures the bank still deducts repayments on other loans and the household's subsistence minimum. How the ceiling is worked out step by step is shown in How much can I borrow for a mortgage.
If you haven't been in business long
Without a single filed tax return, most banks will not assess you as self-employed at all. If you started during the year, you usually wait for the first return covering a full calendar year, and that is filed only in the spring of the following year. More than eighteen months can pass between registering your trade licence and the bank counting your business as income.
There are exceptions. Some banks accept a shorter history if you previously did the same work as an employee and moved over without a break; others look at turnover on your business account. The conditions are stricter and the amount smaller, though. If you are only now thinking of leaving your job, read Employee or self-employed first. A mortgage arranged before the change tends to be considerably larger.
Non-EU freelancers need the right residence status first. Banks lend to non-EU citizens with permanent residence, or with long-term residence plus a home address and income in Czechia, and often only up to LTV 70–80 %; EU citizens borrow on the same terms as Czechs.
Trading through a limited company (s.r.o.) rather than on a trade licence? Then the bank looks at your salary, director's remuneration and profit shares. Those rules are covered in Mortgage for company directors.
What the bank wants besides your tax return
- tax returns for the last 1–2 years with proof of filing; for electronic filing the delivery receipt is enough;
- statements from your business and personal accounts for the last few months, showing payments from your clients;
- at some banks, confirmation that you owe nothing to the tax office, the Czech Social Security Administration (ČSSZ) and your health insurer;
- for VAT payers, sometimes your VAT returns too, as they show turnover in the year you apply;
- property and identity documents, the same as for any applicant.
A full list by type of income, including the documents for a self-employed mortgage, is in our checklist. A mixed personal and business account won't sink the application, but going through the statements will take longer.
The last year before you apply
- Work out with your accountant what income the bank would see with flat-rate expenses and what with actual expenses. The tax saved by optimising is usually in the tens of thousands, while the loan ceiling moves by hundreds of thousands or even millions.
- Plan large business purchases in the year whose return you will show the bank with the mortgage in mind. A car on credit cuts the ceiling twice: through a lower tax base and through the repayment.
- File your return as early as possible after the year ends. The bank wants the latest one, and a higher tax base helps you straight away.
- Settle any arrears and cancel credit cards and overdrafts you don't use; the bank counts their limits even when nothing is drawn.
- Consider a co-applicant with employment income. A steady salary evens out swings in your business, and the incomes are added together.
- Get pre-approval from two banks with different methods. The How much can I borrow calculator gives a first estimate.
Sources
- Act No. 586/1992 Coll., on income taxes, § 7 (income from self-employment, flat-rate expenses), § 35ba (basic taxpayer credit of CZK 30,840)
- Act No. 257/2016 Coll., on consumer credit, § 86 (assessment of the consumer's creditworthiness)
- ČNB – LTV upper limit, deactivation of DSTI and DTI