One person's rights end where another's begin
Under the Charter of Fundamental Rights and Freedoms, every owner has both rights and obligations. Owners may use their property as they see fit, but must not restrict anyone else or endanger their surroundings. So they may do nothing that could cause harm to neighbours' health or property. Nor should they, for example, disturb them to an unreasonable degree with noise or smoke. An owner has a duty to look after the property and maintain it with the care of a prudent manager. They must, for instance, ensure fire safety or regular waste collection. In winter, a building owner's obligations include securing snow that may fall from the roof (something that will soon be very topical again), and in summer maintaining greenery and mowing the lawn. Under the applicable laws, buildings in the Czech Republic must meet the following basic requirements:
- Mechanical resistance and stability
- Fire safety
- Hygiene, health and environmental protection
- Safety and accessibility in use
- Protection against noise
- Energy and heat savings
Since 1 July 2024, it has been a new obligation for property owners to hold project documentation for the building, reflecting its current condition. This somewhat controversial rule may cause problems especially in the case of an older family house that has undergone several renovations over the decades. The potential penalties are draconian. If you own a unit in an apartment building, this obligation falls to the owners' association (SVJ).
An owner of a property in an apartment building is obliged to contribute to the SVJ fund for the upkeep of common areas and repairs to the whole building
Property tax
The basic financial requirement for owners of flats or houses is the annual property tax payment. The property tax return is filed only once – that is, only if in the previous year you inherited, bought or sold a flat, house or plot of land, or if significant structural alterations were made. The decisive date for ownership of a property is 1 January of the given year, and the relevant form must be completed by 31 January. The tax return is filed for the current year, not for the past period, as is the case with most other tax obligations. The form can be completed electronically or delivered to the regional tax office building in whose territory the property is located.
Property tax is the concern of the flat or house owner; tenants are not responsible for paying it
In subsequent years, the owner automatically receives a tax assessment along with the information needed to pay it. The amount of tax may change from year to year, particularly in response to adjustments of the coefficients. Property taxes are revenue for municipal budgets and are used to cover the costs of running the local area. Local authorities therefore have the opportunity to change the amount charged. From 2025, it will be possible to set the local coefficient between 0.5 and 5.0, so in theory property tax can now be reduced to half the otherwise standard level. The multiplier of the basic rate may apply either to the entire municipality or only to a selected city district or to a certain group of properties. The final deadline for publishing the coefficients for the coming year was Tuesday 1 October 2024. TIP: Wondering which coefficient will apply to your property in 2025? Take a look at the search tool on the MOJE daně portal.
Paying taxes when renting out
If an owner rents out an unused or investment property, they are additionally obliged to pay income tax. Every spring, at the beginning of April (or May if everything is filed electronically, or July if a tax adviser is authorised), they must file a tax return for the past year. Employees in this case cannot use the popular annual tax settlement through their employer and must complete the relevant forms themselves. Likewise, it is not possible to use the so-called flat tax regime, popular especially among small tradespeople. Note that this is a different arrangement from so-called flat-rate expenses! The administrative burden rises considerably if you claim actual expenses, which must be recorded and documented to the tax office on request. Note that the above applies only if you rent out the property as a natural person. For legal entities the situation is considerably more complex, for example regarding VAT on short-term rentals (Airbnb, etc.). A flat or house intended for rent should be kept habitable and fit for use by its owner. This means the owner is, for example, responsible for ensuring the supply of water and energy. The owner must also arrange and bear the cost of more extensive repairs, whereas minor maintenance costing up to 1 000 Kč is paid by the tenant. Do you own a property and would like to offer it for rent on the market? Flat Service has many years of experience in property management in Prague and the surrounding area. Thanks to this, it offers clients comprehensive services that save them valuable time, worry and money. Just get in touch at sales@flatservice.cz or on +420 277 000 330 and our experts will handle all the administration involved in renting out your vacant flat, as well as day-to-day property maintenance, for you.
