What taxes do i have to pay in the event of a real property transfer? Are there any other fees involved?

The following taxes may need to be paid on the transfer of a real property:

  • Income tax of 21% if the seller is a legal entity. The tax is paid by the seller.
  • Income tax of 15% if the seller is an individual. This tax can be avoided if the seller proves that he used the property prior to its sale (this is not conditioned on him having his permanent residence there) for at least two years or owned the property for 10 years prior to its sale, or if the seller proves that he has used the proceeds for addressing his housing.
  • Income tax must also be paid if a property is gifted (gratuitous transfer) with the following exceptions:
    • Exempt from income tax are gratuitous transfers from lineally related relatives, i.e., in particular between grandchildren, children, parents, and grandparents;
    • Furthermore, exempt are transfers from a relative in a collateral line, i.e., from a spouse, uncle, aunt, niece or nephew, spouse, the spouse of your child, your spouse’s child (stepson/daughter), spouse’s parents (father/mother-in-law) or your parent’s spouse;
    • Even if the persons involved are not related, exempt is income from a person with whom the beneficiary cohabited for at least one year prior to receiving the gift, in a commonly managed household, and for that reason, he cared for the household or was dependent on the person for his subsistence.

Registration in the Land Register is subject to a CZK 2,000 administrative fee. The flat fee is charged for every agreement on the basis of which a transfer takes place, regardless of the number of properties covered by the agreement. For purchases of properties from the GARTAL portfolio, that fee is paid by our company.