Income tax on rental income (§ 9)

First, separate rent from service charges

Are you renting out your own flat as a home rather than providing accommodation services? That will typically fall under § 9. Ownership alone isn't decisive, though. Income from property held as business assets or from accommodation services may fall under § 7. Different rules also apply to legal entities.

According to the Financial Administration's interpretation, advance payments for services that you later settle against actual costs count neither as taxable income nor as tax-deductible expenses. If you provide the services yourself, the outcome may differ. General Financial Directorate Instruction D-59, section on § 9.

How expenses and the tax rate are calculated

Under § 9 you deduct either your actual documented expenses or a 30% flat-rate expense allowance, capped at 600,000 Kč. For 2026, the rate is 15% on a tax base of up to 1,762,812 Kč and 23% only on the portion above that threshold. This is the annual tax base after the relevant deductions, not a limit on the rent itself. Your other income, such as employment income, will therefore also affect the result. Income Tax Act, § 9 and § 16, and the Financial Administration's table for 2026.

An illustrative example: you collect 300,000 Kč in rent over the year. With the 30% flat-rate allowance you deduct 90,000 Kč, leaving a partial tax base from rent of 210,000 Kč. That isn't your final tax yet. You calculate that in your tax return together with your other income, deductions and tax credits.

So keep a running record of payments received, with rent and service charges logged separately. Splitting a single lump sum after the fact based on an estimate leads to mistakes.