Property taxes in the Czech Republic for foreigners in 2025 – what is important for an investor to know?

In 2025, the Czech Republic continues to attract foreign buyers and investors in the residential and commercial real estate sector. A stable legal framework, transaction transparency, and predictable property value growth make the country one of the most attractive jurisdictions for investments in Central Europe. Property taxes in the Czech Republic remain an important element to consider when planning the purchase, ownership, and rental of a property.

Main tax when purchasing a property: duty and exceptions

Until 2020, there was a mandatory property purchase tax in the Czech Republic, which was 4% of the contractual value and paid by the buyer. However, in support of the market, the authorities abolished the fee — in 2025, the buyer does not pay a separate fee for the initial acquisition if the property is transferred directly from the developer.

Nevertheless, when buying property on the secondary market, additional financial obligations may arise, such as notary services, registration fees, and administrative costs, which amount to 1 to 2.5% of the transaction value. These expenses should be taken into account when budgeting.

In the case of acquiring a property subject to VAT, such as apartments from a legal entity, the duty is 21% and is included in the price. Typically, such situations are characteristic of new construction and non-residential properties.

Property taxes in the Czech Republic during ownership

After completing the transaction, the new owner is obliged to pay an annual property ownership tax in the Czech Republic. The amount of the fee is calculated based on the cadastral value, area, and type of property. The average rate for an apartment is 0.2–0.5 euros per square meter per year. For a private house, it can be up to 0.8 euros. Additional fees may be set by the municipality, especially in tourist regions such as Prague or Karlovy Vary.

Notification of the assessment is sent at the beginning of each year, and payment must be made by the end of May. Penalties are imposed for late payment. Owners of multiple properties must submit declarations for each address separately. The responsibility for payment lies with the individual or legal entity registered in the land cadastre.

Rental income and tax burden on investors

Foreign buyers often purchase property for rental purposes. In this case, there is an obligation to pay income tax on rentals in the Czech Republic. The rate for non-residents is 15%, but with an improper ownership structure, it can reach 19%. Income is calculated taking into account expenses if accounting is maintained, or according to the standard 60/40 scheme: 60% — expenses, 40% — taxable base.

When renting through a management company, obligations arise for the owner, even if the income is irregular. Violations can lead to administrative sanctions and account blocking. Additionally, it is necessary to consider international agreements on double taxation avoidance, especially if rental income abroad has already been taxed in the investor’s country of residence.

Additional expenses during ownership

In addition to mandatory fees, property owners incur regular expenses for its maintenance. These include utility payments, contributions to a reserve fund, security, cleaning, and technical maintenance of common areas. The amount of expenses depends on the housing format and the management company’s policy. All expenses should be taken into account in calculations, especially considering the current property taxes in the Czech Republic and financial reporting rules. General annual expenses may include:

• utility payments — from 1 to 2 euros per m² per month;
• contributions for repairs — up to 0.5 euros per m²;
• property insurance — from 100 euros per year;
• accounting for rentals — from 500 euros per year.

This structure makes preliminary profitability calculations important, especially if the goal of the purchase is long-term investments in Czech real estate.

Properties available to foreign investors

Foreign citizens have the right to purchase property in the Czech Republic without restrictions, except for agricultural and forest land. The focus is usually on apartments and villas in Prague, houses in Brno, apartments in Karlovy Vary, and commercial real estate in the suburbs. Popular categories include:

• studios and one-bedroom apartments in new residential complexes;
• an apartment in the center of Prague with a view of the river or historical landmarks;
• a house with a plot in an environmentally clean area;
• an established rental business with an existing contract;
• an investment lot in the construction stage.

The choice is made based on the goals — residence, rental, resale — and ownership structure (individual, company, trust).

Taxes for foreign investors in the Czech Republic: key rates

Understanding the rules is a mandatory condition for legal ownership and effective property management. Rates do not change often, but every update in fiscal legislation should be monitored. The main tax rates and fees are:

• ownership tax — 0.2–0.5 euros per m² per year;
• rental income tax — 15–19%;
• VAT on the purchase of a new property — 21%;
• registration fees — up to 2.5% of the transaction price;
• on resale — 15% if the property was owned for less than 5 years.

Compliance ensures transparency of ownership, minimizes conflicts with tax authorities, and allows for future residency status. All aspects are directly related to how property taxes in the Czech Republic are structured and why it is important to consider them in long-term investment planning.

Practical recommendations for purchasing

Before investing capital, it is important to undergo a legal check of the property, analyze cadastral documentation, order an independent appraisal, and calculate potential profitability. Involvement of a professional consultant plays a key role in transaction transparency and protection against hidden costs.

It is necessary to open an account in a Czech bank in advance, ensure notarial support, obtain a tax identification number, and timely submit a declaration. When purchasing property for income generation, it is important to carefully study the management contract. It is also advisable to compare market conditions in the Czech Republic with neighboring EU countries.

This comprehensive approach helps reduce financial risks and maximize the use of legal mechanisms to increase investment efficiency.

Conclusion

Understanding the structure of property taxes in the Czech Republic in 2025 gives foreign investors confidence and financial stability. A well-thought-out purchasing and ownership strategy allows not only to preserve capital but also to ensure a stable source of income at low tax rates. With its transparent market, legal protection, and high demand for rentals, the Czech Republic remains one of the best platforms for investments in the EU.