VAT on new builds (DPH u novostavby, 12 % / 21 %)
Value added tax (DPH) that a developer adds to the price of a new flat or house under Act No. 235/2004 Coll. The reduced rate of 12 % applies to “social housing” (stavba pro sociální bydlení, § 48a), meaning a flat with a floor area of up to 120 m² or a family house of up to 350 m²; larger flats and houses carry 21 %. Prices for consumers are quoted including VAT, and the bank calculates LTV from the VAT-inclusive price.
Example
A 70 m² flat for CZK 5,000,000 including 12 % VAT costs CZK 4,464,286 before tax. If it had 130 m², the 21 % rate would apply and the same base would cost CZK 5,401,786. The difference of CZK 401,786 means, at 80 % LTV, roughly CZK 80,000 more own funds and a mortgage CZK 321,000 above CZK 4,000,000 (5.00 %).
In practice
VAT is charged only on the first sale of a new build made by the end of the 23rd calendar month after its completion (kolaudace); later sales are generally VAT-exempt (§ 56 of the VAT Act as amended from 1 July 2025), and none is charged between private individuals. Check that the price list says “incl. VAT” and how client changes are taxed. Work out your own funds from the VAT-inclusive price, not from a pre-VAT figure tucked away in the small print.
How it differs
Don't mix it up with the real estate acquisition tax (daň z nabytí nemovitých věcí, 4 %), which was abolished in 2020 and never had anything to do with VAT. The annual property tax (daň z nemovitých věcí) is paid by the owner every year; VAT is paid only once, inside the purchase price from the developer. Renting out flats is VAT-exempt, so even an investor usually cannot reclaim the VAT on the purchase price.
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