Will the changes to the real estate tax affect you? Are you obliged to file a tax return?

Real estate tax returns are usually filed by taxpayers who bought or sold real estate during the previous year. However, at the beginning of 2024, you need to stay alert because a number of significant changes brought about by the consolidation package will require additional taxpayers to file a return. The amendments to the Real Property Tax Act are effective as early as January 1, 2024, and will apply to 2024.

What is changing for 2024?

  • Land and building tax increases by up to 80%.
  • An inflation coefficient is introduced; although it is 1 for 2024, it will change each year.
  • The way certain land and buildings are taxed will now be linked directly to the registration in the Land Registry, regardless of their actual use.
  • Building land will also be newly created on land on which a taxable building already stands.
  • Built-up areas of business land will be taxed on all types of land (previously they were taxed only on land of the type “other area” or “built-up area and courtyard”).
  • Tax will increase on residential buildings where part (or a room) is used for accommodation (e.g. Airbnb).
  • Ponds used for intensive and industrial fish farming will now be excluded from the tax.
  • Taxable buildings and units used for child care service facilities in a child care group or land encumbered by a building right will be exempted from the tax if the builder is a municipality.
  • The exemption for land, structures and units used exclusively for waste management is repealed.
  • The user will now be the taxpayer for structures and units where the owner is unknown (except for structures and units used for residential purposes).
  • The minimum tax for a co-ownership interest will be increased to C$90 (instead of C$50).
  • The minimum tax assessed will increase to CZK 50 (instead of CZK 30).
  • A municipality may also set a different amount of the local coefficient for an individual part of the municipality or specific parcels.
  • Municipalities gain more power to regulate the taxation of agricultural land.

When do I need to file my tax return? Sample examples to illustrate.

  • The garage was taxed at a different rate than that applied to the garage.
  • A building registered in the Land Registry as a building other than a garage and still taxed as a garage.
  • Where a building is permitted where the building is on land where another taxable building already stands.
  • In the case of a paved area of land taxed differently because it has been registered in the Land Registry as a type of land other than “other area” or “built-up area and courtyard”, even if it is not used for business purposes; it is sufficient that the entrepreneur has it classified as business property.
  • Newly defined users of land, taxable buildings or units.
  • Due to a change in the scope of the exemption for a unit of a transmission, transmission or distribution system or a heat distribution facility.

The deadline for filing tax returns expires on January 31, 2024.