Rental Income Tax Calculator

Czech real estate & apartment rental taxes subject anybody renting a home or apartment flat to certain tax obligations. Taxpayers file rental income as part of the personal income tax report, and property lessors must do this every year. The amount of taxable income then depends on the taxpayer’s personal income together with their rental income for the year.

Tax residents and non tax residents in the Czech Republic must file taxes on the income they receive in the country. With rental income, taxpayers may file income taxes using actual expenses or at a 30% flat tax rate.

If you rent any real estate or apartment over a longer period of time without providing services, tax obligations arise. Note: Services such as housekeeping, catering, and similar fall under accommodation services, and have different tax regimes. If no accommodation services exist, then renting out property is subject to real estate and apartment rental tax.

The difference between a landlord and an entrepreneur renting property in the Czech Republic is a matter of employment status. If a person renting a property has full-time employment they are a ‘landlord’. Landlords are then only responsible for paying taxes on income generated from the rental property once every year. Conversely, if the lessor conducts business on a trade license, they must pay rental income tax on top of their business income taxes.

Any income under CZK 6,000 annually from business, rental or other income-generating activities is not subject to taxation. If below this amount, there is no requirement to submit a tax return, and thus, nothing to pay. The threshold increases to CZK 15,000 if there is zero income other than the rental for the year. If you exceed either threshold, you must then pay rental income tax. In this case, tax filers report either actual expenses or using the simpler 30% flat tax rate.

Reporting actual expenses is both more complicated and time-consuming than the simpler flat tax regime. Tax filers have to keep records of all tangible assets or real estate, as well as any costs for repairs. This recordkeeping must also document expenses up to 3 years back for the Czech Financial Office. In case of tax loss, it’s 8 years retroactively. Income tax will then account for deductible expenses, and any additional tax discounts or relief you might be eligible to claim.

Reporting rental income using the 70/30 greatly simplifies tax reporting. However, be aware that claiming fixed expenses comes with both advantages and disadvantages. On one hand, you will not need to submit detailed records to the tax office every year. While this is easier and more convenient, the trade-off is that you might pay several times more in taxes. This is due to the fact that when claiming fixed expenses, additional tax discounts which you may be eligible for will not apply. Thus, if you have significant real expenses over the year (reconstruction for example), the flat-rate regime may cost you more in the end.

( ! ) - Consider consultation with Pexpats’ professional tax advisors to find the best tax regime in the Czech Republic for you.