Alexio.cz

Tax Returns for Czech Property

A property may be subject to three types of taxes / tax returns:

1] the Property Tax Return, deadline is 31.1.2013
2] the Income Tax Return, deadline 31.3.2013
3] the Transfer Tax

1] the Property Tax Return, deadline is 31.01.2013

The Propert Tax is the tax on the value of the property. This tax is usually only a couple of 100s or 1000s of CZK, and is calculated according to type of object, square meters and address. The address determines the 'tax coefficient' - it can be different for every (part of) town, see Property Tax Return Coefficients for Prague and CZ

Anyone / any company owning on 1.1.2013 property is supposed to pay this Property Tax, and if you owned property in 2012 you should file a Property Tax Return.

Once you filed a Property Tax Return, there is no need to file a new one the next year, unless there are significant changes to the object, influencing the value. If nothing changes during the year, the amount to be paid to the the taxoffice is the same as on the original Property Tax Return.
This amount will be different from last year(s) in case the 'tax coefficient' changed for that part of town.

If you want us to file the Property Tax Return then provide us with the following data by 30.1.2013:

the complete address including part of town, cislo popisne and cislo orientacni (most buildings have a blue and a red sign with these numbers, for example 901 and 21)
for an apartment: the number of the apartment, the floor on which it is, and the number of square meters of living space AND number of square meters of each floor above (for the more luxurious apartments)
for a house: number of square meters of the ground floor AND number of square meters of each floor above (to avoid UK / US confusion: the groundfloor is on streetlevel)
very helpful would be a scan of the 'vypis katastru' - you should have received it when you became owner in the landregister. It is also possible to get it from Czechpoint or a notary.

Costs of a Property Tax Return: from 3.500 CZK *
- provided we get from you all required data (in time).

If nothing changed to your property, you can save yourself this money, since there is no need to file every year.

In case you have multiple properties, there are possibilities for discounts, please contact us.

If you are unsure about your Property Tax Payments:

Condition is that you already did file a Property Tax Return in the past.

We will contact the Tax Office and ask what you should pay for 2012 / 2013
Also we will find out if everything was paid correctly for the previous years

Costs of checking the Property Tax Payments 350 CZK *

Price is per property.

2] the Income Tax Return, deadline 31.3.2013 - calculating Tax Benefits, Mortgage Interests

In case you earn money with your property in the form or rent, then you / your company should file this as part of the (corporate) income tax return, you do not file a separate income tax return just for the rent - unless you have no other income to declare in Czech Republic (for people living abroad and filing taxes there).

Rental Income

Rent is so-called paragraph 9 income, and there is a standard 30% expense deduction (no questions asked). Service charges are not rental income, so it needs to be clear from the rental contract how high those charges are, so the service charges do not end up in par. 9.

Mortgage Interests

A further deduction is paid mortgage interests. The monthly mortgage payment consist of two parts: the base and the interest part. Only the interest part is deductable (not the entire sum) and we absolutely need an original paper overview stating the paid interests, we need to add it to the tax return. The bank sends it to you in the beginning of the year, if not: ask for it. There is a maximum limit on how much the (rental) income total is reduced by interests, and it is 300.000 CZK for 2012. Also, you can only make use of this deduction if the mortgage is for the place you live in. No deduction is possible for mortgages on property that you rent out.

The remaining sum is subject to 15% income tax. The calculated tax is subject to a personal tax deduction of about 24.000 CZK. Bottomline is that the taxes on rental income are a couple of 1000s CZK max in most cases.

Costs of a Rental Income Tax Return: starting from 3.500 CZK *

Price for a standard, straight forward taxreturn;
extra charges depend on how much accounting work needs to be done in preparation of the taxreturn.
We charge 700 CZK / hour for processing papers for tax returns by an accountant
and 2.000 CZK / hour in case a tax advisor is required.

If you are working and living in Czech Republic, your income tax return will also contain your other (foreign) income and then your income tax return will be more complex.

3] the Transfer Tax

The Transfer Tax of 3% is to be paid by the SELLER after an expert has determined the value for taxes (this is NOT the same evaluation as was required for the mortgage). The 3% is based on the value for taxes or the selling price (whichever was highest). The buyer should not pay the Transfer Tax.

In case the property has been your main residence for at least 2 years, or you have owned it non-commercially more than 5 years, then no Transfer Tax will need to be paid at all.

Costs of a Transfer Tax Return: starting from 5.000 CZK *

If you owned property in 2012 in Czech Republic, please check the following:

-do you need a Property Tax Return
if yes, then we can fill one in for you, if no, pay the amount you paid last year.
note that most taxoffices do not send a slozenka with the tax to be paid anymore!

-do you need an Income Tax Return
if yes, there is time until 31.3.2013 to file, but please inform us asap, so we can send a list of required documents for filing your Income Tax Return.

-did you receive a letter of the taxoffice beginning with 'VYZVA', that is a request for information from the tax office, usually meaning that they want money or there is something wrong with your previous Tax Return.

How to proceed if you want Alexio to do your Tax Return

email us about the kind of Tax Return you want,
we will email a checklist of required documents and a questionnaire,
you bring or send in the required documents - we'll discuss them with you,
you will pay a deposit (the price listed above) in cash, by transfer or credit card / Paypal,
we process the documents and produce the Tax Return,
we will explain the Tax Return and you sign it (or we use an earlier signed Power of Attorney).
we will file the Tax Return and send you a stamped paper original + scan.

Alexio.cz Expat Accountant in Prague