How does it work with the taxation of real estate in Ostrava?
Did you buy a property in Ostrava or are you planning to buy one?
Did you buy a property in Ostrava or are you planning to buy one? Do you already have a property here and you rent it out? What is a Stamp Duty? Read to find out more.
Here are 5 things you should know about real estate taxation in Ostrava:
- Real Estate Tax
You must pay property tax annually depending on the location and the size of your property. Tax is calculated not only for the ownership of the building but also for the land the building is built on, so don’t forget to include this when you are filing your tax return. I can help you with this, so do not hesitate to get in touch should you need assistance.
- Transfer tax of 4% – pay or not to pay?
From the 26th of September 2020, the duty to pay a transfer tax of 4% when purchasing a property in Czech was cancelled. Retrospectively, if you bought a property before 31st March 2020, the transfer tax still applied to you for that particular tax period. If you paid transfer tax after the period it got cancelled, you need to complete a return form and submit it to your local financial office.
What does the cancellation of transfer tax mean to you? For example, if you bought a property for 1 million, you had to pay 40 000 CZK for the transfer tax. Now, you can use that saved money to buy furniture or appliances for your new home.
- Investing and tax return
In this case you need to file for lease income. It is simple, if you rent a property and make profits of that, you need to file for profits as you would regardless of if you are employed or self-employed. If you are employed, you need to inform your company’s accountant of those extra profits as they could include this when they do the tax return for you, or they can advise you how you could do this individually.
You can claim interest from a mortgage/loan for tax deductions from the tax base, however, this could be only from permanent housing. Not property you rent out, or recreational objects.
- What is a Stamp Duty?
Stamp Duty (“kolek”) is a charge by Land Registry for filing a contract for each property. The charge is 2000 CZK, and this is to be paid to either an estate agent, solicitor or to the Land Registry itself. You do not pay this if the flat you bought is „družstevní“.
- Know which financial/ tax office to go to.
You need to file a tax return in the financial/ tax office in the area of which you either have a registered permanent address or the address of your company. Not the financial office for the whole Moravian Silesian region, as they would probably send you to the tax office in your area anyway.
You must register the property you purchased only once and then pay annual property tax each financial year.
TIP: If you were to translate the term „property tax“ (daň z nemovitostí) that was valid till 2014 and from 2014 it is called taxation for „intangible objects“ (daň z nemovitých věcí).
I would like to point out I am not financially qualified, and this article is purely for orientation purposes. Should you need professional advice, feel free to get in touch with me and I can recommend you financial advisor in Ostrava.
Author: Tereza Klozíková – Férová makléřka