For your tax return, prepare an overview of your rental income, whether it arrives in your bank account or in cash. Simply adding up the payments isn't enough. You need to separate rent from service charge advances and choose how to claim expenses. Classifying amounts correctly and having complete records affects the final tax just as much as the rate that applies.
This guide covers the standard letting of a flat by an individual under § 9 of Act No. 586/1992 Coll., on Income Taxes (ITA). Short-term accommodation with services (Airbnb), a flat held as business assets, or foreign tax residency fall under different rules. Don't confuse the figures for 2026 income with the return filed in 2026 for 2025.
Quick answer: rental income tax 2026
For a standard flat let by an individual under § 9 ITA, the tax base is taxed at 15%; the portion above 1,762,812 Kč (2026) is taxed at 23%. The threshold applies to your total income, not to the flat alone. From your income you deduct either flat-rate expenses of 30% (up to 600,000 Kč a year) or actual expenses: provided the relevant conditions are met, these include depreciation of the flat, mortgage interest, the manager's fee, insurance, repairs and contributions to the SVJ for repairs.
Service charge advances that you pass on and settle are not income. No social security or health insurance contributions are payable on rent. The return for 2026 is due by 1 April 2027, or by 3 May 2027 if filed electronically. For a flat with a mortgage, a recent renovation or a paid manager, actual expenses usually work out better than the flat rate; calculate both options.
What you are actually taxed on
You deduct tax-deductible expenses from your rental income. The result is a partial tax base, which is added to your other income (typically employment). So the tax is not calculated on the full payment your tenant sends you every month.
Split the money you receive into three groups:
| Payment | Tax treatment |
|---|---|
| Rent | Income under § 9 ITA. |
| Service charge advances (heating, water, lift, cleaning, waste) | If you arrange the services through the SVJ or a supplier and settle them against actual costs after the year ends, they are neither income nor an expense (General Financial Directorate guideline D-59 on § 9(3)). If you provide the service yourself or agree a fixed fee with no settlement, it counts as income. |
| Security deposit | A refundable security deposit you receive is not in itself rental income. Offsetting it against unpaid rent, however, does count as income. Any amount used to cover damage should be assessed according to the actual nature of the compensation and the tax rules, not automatically treated the same as rent. |
In practice: rent of 20,000 Kč plus 5,000 Kč in advances a month means taxable income of 240,000 Kč a year, not 300,000 Kč. The condition is that you actually settle the advances. Anyone charging “25,000 Kč all-inclusive” with no settlement is taxed on the full 300,000 Kč.
The 15% and 23% rates: which threshold applies to which year
The 15% rate applies to a tax base of up to 36 times the average wage; the 23% rate applies only to the portion above that threshold (§ 16 ITA).
| Tax period | Average wage | Threshold for 23% |
|---|---|---|
| 2025 | 46,557 Kč | 1,676,052 Kč |
| 2026 | 48,967 Kč | 1,762,812 Kč |
The threshold is not assessed separately for the flat. Example: an employee earns a gross salary of 120,000 Kč a month, i.e. 1,440,000 Kč a year. With no other income, deductions or adjustments to the base, 322,812 Kč remains below the threshold. Only the part of the rental tax base above this remaining amount is taxed at the higher rate. It is not 23% of all the rent, nor of the entire salary.
30% flat-rate expenses: what to record
For income under § 9, you can claim expenses of 30% of income, up to 600,000 Kč a year (§ 9(4) ITA). You can therefore use the full flat rate on income of up to 2,000,000 Kč a year. The flat rate covers all related expenses. You cannot add management fees, insurance, interest or depreciation on top.
The flat rate simplifies paperwork, but it doesn't remove the need for records. You must keep records of income and of receivables related to the rental (§ 9(5) ITA). Once chosen, the method cannot be changed retrospectively for that year.
Watch out for two similar terms: flat-rate expenses are not the flat-rate tax. For self-employed people in the flat-rate tax regime, total income under §§ 8 to 10 is also tracked. If this relevant income exceeds 50,000 Kč a year, the tax generally cannot equal the flat-rate tax, and a tax return and annual statements must be filed. This is not the same as the flat-rate regime ending immediately during the year. The procedure is explained in the Financial Administration's FAQ on the flat-rate tax.
Who benefits from the flat rate
The flat rate can pay off if your deductible expenses are low and you value simpler paperwork. But not having a mortgage isn't enough on its own: even a paid-off or inherited flat may have significant depreciation. With a loan, larger repairs or paid management, it's worth calculating actual expenses. What matters is the total of deductible items, not how you acquired the flat.
Actual expenses: documents and correct classification are key
With actual expenses, you need to show that they relate to the rental (§ 24 ITA). Each item has its own rules.
Mortgage: interest yes, principal no
Loan repayments significantly reduce the money you're left with, but the principal portion is not a tax expense. Only the interest on a loan used to buy the let flat counts as an expense. The same interest cannot also be claimed as a deduction from the tax base under § 15(3) ITA; that applies only to housing for your own use. A let flat does not meet this condition.
Depreciation: 3.4% a year, but only from the correct price
A standard residential unit usually falls into depreciation group 5, with a depreciation period of 30 years. Under straight-line depreciation, the rate is 1.4% in the first year and 3.4% of the entry price in subsequent years (§ 31 ITA). If the correctly determined depreciable entry price excluding the land is 7,000,000 Kč, depreciation comes to 98,000 Kč in the first year and 238,000 Kč in each following year. Depreciation is not a new payment from your account; it gradually reflects the value of the asset in your tax expenses.
When determining depreciation, check three things in particular:
- Land is not depreciated. You must exclude the share of the land from the unit's price (according to the purchase contract or an expert valuation).
- A flat bought more than 5 years before the rental began is depreciated from the replacement cost determined by an expert valuation as at the start of the tenancy (§ 29(1)(d) ITA), not from the original purchase price. For a flat bought in 2012 for 2,500,000 Kč and let from 2026, the depreciation base may be three times higher.
- Gifts and inheritances have different rules. § 27(j) ITA excludes from depreciation any asset acquired as a gift whose acquisition was exempt from income tax or outside its scope. For older gifts, check the transitional provisions too. For inheritances, it depends among other things on how the deceased depreciated the asset. Before factoring depreciation into your return, document both the method and date of acquisition.
Renovations and SVJ payments: the label isn't enough
A repair restores the original condition or function and, if the conditions are met, can be a direct tax expense. Technical improvement includes, for example, changing technical parameters or adding new features. If the statutory total for one asset exceeds 80,000 Kč in a year, it is usually reflected in depreciation rather than expensed in one go (§ 33 ITA). This does not automatically start a new thirty-year depreciation period. Classification isn't decided by price or the description on the invoice alone. More in our article on renovating a flat before letting.
Contributions to the SVJ (the “repair fund”) are, according to General Financial Directorate guideline D-59, an expense in the year they are paid, provided they go towards the running and repair of the building. If the SVJ uses the money for technical improvement (insulation, a new lift, balconies), your share becomes part of the flat's entry price and is depreciated. So ask the SVJ for an annual statement of how the funds were used. If you receive one automatically, keep it with your other tax documents.
Manager's fee, insurance, property tax
The manager's fee, insurance related to the rental, property tax and documented necessary travel can all count as tax expenses. VAT is part of the expense if you are not entitled to deduct it. If the full annual Partner fee of 43,560 Kč goes into a base taxed at 15%, it reduces your tax by 6,534 Kč. With a loss or other credits, the immediate effect may differ; the state does not automatically cover part of the invoice.
Example: an employee with one flat
Our model landlord earns a gross salary of 60,000 Kč a month and lets a flat for 25,000 Kč a month, i.e. 300,000 Kč a year excluding service charge advances. They claim flat-rate expenses and only the basic taxpayer credit, which they use with their employer throughout the year. They have no other income or deductions. The calculation is for 2026.
| Step | Calculation | Amount |
|---|---|---|
| Partial tax base from employment | 60,000 × 12 | 720,000 Kč |
| Partial tax base from rent | 300,000 × 0.70 | 210,000 Kč |
| Tax base | 930,000 Kč | |
| Threshold for 23% | 1,762,812 Kč | not exceeded |
| Tax at 15% | 930,000 × 0.15 | 139,500 Kč |
| Basic taxpayer credit (§ 35ba ITA) | -30,840 Kč | |
| Total tax | 108,660 Kč | |
| Advances withheld by employer | 77,160 Kč | |
| Additional tax due on return | 31,500 Kč |
In this model, the rental increases tax by 31,500 Kč, i.e. 10.5% of the gross rent. No social security or health insurance contributions are payable on § 9 income. The result cannot be applied to someone with different income or credits without recalculating.
Flat rate versus actual expenses on the same flat
The same annual income of 300,000 Kč, but this time for a flat bought for 7,000,000 Kč, of which 300,000 Kč is attributable to the land. The owner has a mortgage and pays for Partner management and insurance. The model is past the first year of straight-line depreciation, and the conditions for depreciating from a price of 6,700,000 Kč are met. Here the SVJ contribution is used entirely for deductible repairs, not technical improvement.
| Item | Flat-rate expenses | Actual expenses |
|---|---|---|
| Rental income | 300,000 Kč | 300,000 Kč |
| 30% flat rate | 90,000 Kč | |
| Mortgage interest (model) | 150,000 Kč | |
| Depreciation 3.4% of 6,700,000 Kč | 227,800 Kč | |
| Manager's fee incl. VAT | 43,560 Kč | |
| Insurance and property tax | 6,000 Kč | |
| SVJ contributions to repairs (model) | 24,000 Kč | |
| Total expenses | 90,000 Kč | 451,360 Kč |
| Partial tax base § 9 | 210,000 Kč | -151,360 Kč (loss) |
| Rental income tax at 15% | 31,500 Kč | 0 Kč |
With actual expenses, this model produces a tax loss. It can be offset against other partial tax bases except employment; a loss that has been finally assessed can, under statutory conditions, also be carried back two tax periods or forward five (§ 34 ITA). Compared with the flat rate, the tax difference in this model is 31,500 Kč a year. Before deciding on the basis of administrative simplicity, compare both methods using your own figures.
Switching methods between years is possible, but may require an adjustment to the tax base, particularly for unpaid receivables under § 23(8) ITA. The exact procedure depends on the records you keep. It doesn't mean automatically adding all receivables and deducting all debts. Discuss the switch with a tax adviser.
Insurance, spouses and the limited company question
Social security and health insurance
No social security or health insurance contributions are payable on rental income under § 9 (§ 9(3) of Act No. 155/1995 Coll., Act No. 592/1992 Coll.). Anyone who lives solely on rental income and is not an employee, self-employed or insured by the state is a person without taxable income (OBZP) and pays health insurance themselves: in 2026 this is 3,024 Kč a month (13.5% of the minimum wage of 22,400 Kč). It is due by the 8th day of the following month.
Spouses and co-owners
Rental income from a flat held in spouses' community property is taxed by one spouse, in full (§ 9(2) ITA). You can choose who each year. If there's a risk of exceeding the 23% threshold, it pays to choose the spouse with the lower income. With shared co-ownership, each owner is taxed according to their share (§ 12 ITA).
Is it worth letting through a limited company?
The number of flats alone isn't decisive. Even with one to three flats held long-term, compare expenses, financing, what happens to the profit and any planned sale. A limited company pays 21% tax on profit (§ 21 ITA). If the subsequent payout to the shareholder is subject to 15% withholding tax, the combined tax comes to 32.85% of the original profit. An individual pays 15%, or 23% on the part of the base above the relevant threshold. With the full 30% flat rate and the 15% rate, tax before credits equals 10.5% of gross rent. A company does not get the same personal exemption on selling a flat after the holding period under § 4 ITA; compare specific loan terms based on bank offers. Also consider a limited company if you are reinvesting profit in more flats, have several co-investors, or provide accommodation services. More in our article on buying an investment flat in Prague.
Filing deadlines and property tax
| Income tax return | For 2025 (filed in 2026) | For 2026 (filed in 2027) |
|---|---|---|
| Standard three-month deadline | 1 April 2026 | 1 April 2027 |
| Extended deadline for electronic filing | 4 May 2026 | 3 May 2027 |
| Six-month deadline if statutory conditions are met | 1 July 2026 | 1 July 2027 |
Filing electronically doesn't always extend the deadline by itself: the four-month deadline applies if the return was not filed within the standard deadline and is then filed electronically. The six-month deadline mainly applies to mandatory audits or subsequent filing by an adviser under the conditions of § 136 of the Tax Code. The 2027 dates have been calculated under the current law and the rules for weekends and public holidays; check them in the Financial Administration calendar before filing. The tax is due by your applicable deadline.
An employee with other relevant income under §§ 7 to 10 exceeding 20,000 Kč a year usually files their own return. What counts is the total of this income before expenses, not just the profit from one flat (§ 38g ITA).
Alongside income tax, owners also deal with property tax, which applies whether or not the flat is let. A return is usually filed only after a change relevant to the assessment, such as a purchase, sale or extension, by 31 January of the following year. Tax of up to 5,000 Kč is payable in one go by 31 May. Higher amounts can be split into two instalments, due by 31 May and 30 November. If a deadline falls on a weekend or public holiday, it moves to the next working day; in 2026, the first payment deadline therefore falls on 1 June. In Prague, a 60 m² flat costs roughly 1,700 to 2,600 Kč a year, depending on the district. The inflation coefficient for 2026 remained at 1.0, so it did not increase the tax on its own.
Five mistakes when taxing rental income
- Taxing ongoing service charge advances. Advances for services you pass on and later settle against actual costs are treated differently from your own rental income. Wrongly including 5,000 Kč a month would increase annual income by 60,000 Kč. At a 15% rate and with no related expenses, that would mean 9,000 Kč more in tax.
- Using the flat rate for a flat with a mortgage and depreciation. The difference can amount to tens of thousands of crowns a year (see the example above).
- Using the wrong entry price for depreciation. One deciding factor is the gap between purchase and the start of the rental. The five-year rule does not mean a flat that is already being depreciated can be revalued every five years.
- Missing documentation for SVJ contributions. For repair contributions, be able to show what they were used for. Keep the SVJ's statement together with your payment records.
- Confusing filing with paying the tax. These are two separate obligations with different consequences for delay. The penalty for late filing is governed by § 250 and late-payment interest by § 252 of the Tax Code. Whether they arise, how much they are and any exceptions depend on the specific situation; a zero balance due doesn't automatically mean you don't have to file.
FAQ
Can I add the management fee on top of the flat rate?
No. The 30% flat rate covers all related expenses. You can claim the manager's fee separately only with actual expenses, provided the conditions for deductibility are met. VAT forms part of this expense only if you are not entitled to deduct it, as explained in the section on the manager's fee.
I have two flats. Can I use a different method for each?
No. One method applies to all § 9 income in a given year: either the flat rate or actual expenses.
Do I have to file a return if my rental income is small?
It also depends on your other income and whether the conditions of § 38g ITA are met. For employees, one factor is whether other income under §§ 7 to 10 exceeds 20,000 Kč; the general income limit is 50,000 Kč. The obligation can also arise for other reasons, for example when reporting a tax loss. Low rent is not a universal exemption in itself.
How is Airbnb income taxed?
What matters is the actual nature of the activity, not the platform. Short-term accommodation services usually fall under § 7 ITA and have different rules for expenses, insurance contributions and VAT. Even a non-VAT payer may have to register as an identified person when receiving services from a foreign platform. This guide covers long-term letting; for accommodation, have the whole regime assessed.
Is the calculator result my final tax?
No. The indicative calculation helps you compare methods. Your final tax depends on other income, deductions (donations, pension savings), credits (spouse, children) and the correct classification of individual expenses.
This text describes general rules verified as at 12 September 2026 and is no substitute for individual tax advice. We recommend going through depreciation, a change of expense method, a gifted flat or mixed use of a flat with a tax adviser.
Sources and updates: Financial Administration: rental income, Income Tax Act, Tax Code, General Financial Directorate guideline D-59 and OBZP contributions according to VoZP. The calculations state their assumptions explicitly and do not constitute individual tax advice.