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Tax Returns for Czech Property
A property may be subject to three types of taxes / tax returns:- 1] the Property Tax Return, deadline is 31.1.2012
- 2] the Income Tax Return, deadline 31.3.2012
- 3] the Transfer Tax
1] the Property Tax Return, deadline is 31.01.2012
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 (this determines the 'tax coefficient').Anyone / any company owning on 1.1.2012 property is supposed to pay this Property Tax, and if you bought property in 2011 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 taxoffice should automatically send you a letter or 'slozenka', which already has pre-printed the amount you should pay.
This amount may be different from last year(s) in case the 'tax coefficient' changed for that part of town.
Some people complain about not receiving the 'slozenka' but in most cases it is because the mail was not forwarded correctly or picked up. When in doubt, we can check where the 'slozenka' is being sent to.
If you want us to file the Property Tax Return then provide us with the following data by 30.1.2012:
- 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 you receive the 'slozenka' and nothing changed to your property
in 2011, you can save yourself this money, since there is no need to
file.
In case you have multiple properties, there are possibilities for
discounts, please contact us.
2] the Income Tax Return, deadline 31.3.2012 - 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 2011.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 an Income Tax Return: 3.500 CZK
- in case of a standard situation: rental income + mortgage, no other sources of income.
If you are working and living in Czech Republic, your income tax return will also contain your other (foreignl) 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). You, as the buyer should not pay the Transfer Tax.If you owned property in 2011 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, check if you got the 'slozenka' in 2011
- if no slozenka, there is an address / delivery problem.
-do you need an Income Tax Return
if yes, there is time until 31.3.2012 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 asap about the kind of Tax Return you want,
- we will email a checklist of required documents,
- you bring or send in (by mail or electronically) the required documents,
- we give / send you a deposit invoice,
- you pay the deposit in cash, by bank transfer or Paypal,
- we process the documents and explain the Tax Return,
- you sign the Tax Return (or we use an earlier signed Power of Attorney).
- After receiving the rest of the fee, we will file your Tax Return.