Abolition of real estate acquisition tax approved

The proposal to abolish the real estate acquisition tax has been approved and now also officially signed by the President.

The abolition of the real estate acquisition tax applies retroactively to acquisitions where the entry into the land register took place in December 2019 or later.

Together with this change, period for tax exemption of individuals’ income from the sale of real estate (that is not used to satisfy housing needs) was increased from the current 5 years to 10 years. However, the new period shall apply only to the sale of real estate acquired after 1 January 2021.

Moreover, the annual limit for the tax base deduction of interest on loans used to finance housing needs is reduced from CZK 300,000 to CZK 150,000, but again only for real estate acquired after 1 January 2021. (Originally, the proposal wanted to abolish this deduction completely.)

If you have already paid the tax, the abolition triggered a tax overpayment. In such a case, you have to request its refund from the tax office.

Those who have not filed their tax returns and paid the tax yet, do not have any further obligations towards the tax authorities.