Abolition of real estate acquisition tax

Authors: Markéta Gattnarová, Martin Sotolář
The real estate acquisition tax, rate of which is currently 4 %, was approved by Chamber of Deputies to be abolished on 15 September. This abolition will take effect even retroactively for deposits in the real estate register from 1 December 2019.

This means that if the deposit in the register was completed during December 2019 or later, it is not necessary to file a tax return on the acquired real estate. If someone has already paid the tax, it will be refunded in the standard way through Financial Administration as standard refund.

In connection with this law, an extension of the time test for income of the sale of real estates was passed. This would apply on real estates acquired from the beggining of the next year (i.e. 1 January 2021). The period for exemption from personal income tax is extended from the current 5 to 10 years. At the same time, in the case of mortgages concluded on 1 January 2021 and later, the maximum deduction is reduced from the original CZK 300,000 to CZK 150,000. According to the original bill, the possibility of deducting mortgage interests should have been completely abolished, however, the interest deductions were maintained in the half amount in the final version. For the sake of completness, the current deduction limit of CZK 300,000 applies to loans provided until the end of this year.


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