Czech property sales tax

UPDATE: this article is now redundant as the property sales tax has been converted into a buying tax from 1.11.2016.

When selling a property in the Czech Republic it is required by law to pay Property Sales Tax to the government.

Since 1.1.2013 property sales tax is 4%, based on either the sales price or the official valuation price. All properties must have an official valuation done when selling the property.

• If the sales price is higher than the valuation price the sales tax is calculated on the sales price.
• If the sales price is lower than the valuation price the sales is calculated on 80% of the valuation price.

Its down to agreement/negotiation who pays the property sales tax (either the buyer or the seller). Usually its the seller that pays the tax but by law the buyer guarantees the payment, so that if the seller doesn’t pay it the buyer is liable to pay it (and therefore it is usual for the property sale tax payments to be handled directly via an escrow account to ensure both sides are protected in the process).

The property sales tax must be paid to the relevant financial/tax office within 3 months of the ownership being transferred by the cadastre.

The only exemption is residential properties sold by developers do not have to pay property sales tax.

Sim Property’s provides a complete property sales service in the Czech Republic that handles all these details for you.