Generally, the obligation to submit a real estate tax return for the year 2024 applies to anyone who experienced changes in circumstances relevant to the tax assessment in 2023.
Generally, the obligation to submit a real estate tax return for the year 2024 applies to anyone who experienced changes in circumstances relevant to the tax assessment between January 1, 2023, and December 31, 2023, typically:
- acquisition of real estate,
- disposal of real estate,
- changes to the real estate (after the changes’ final inspection):
- in the case of buildings – e.g. superstructures, extensions, partial liquidation
- in the case of estates – changes of estate type or area (e.g. building sites, reinforced areas)
- new owner’s declaration (division of a house into apartments, other changes based on the owner's declaration),
- granting of a building right (a company granted a building right on land it owns, or a building right was granted to a company on land it does not own).
As you may have already read in our articles about the consolidation package, it includes, among other things, a comprehensive amendment to Act No. 338/1992 Coll., on Real Estate Tax, as subsequently amended. This amendment has a dual effectiveness – the majority of changes are effective from January 1, 2024, while a smaller part has a delayed effectiveness from January 1, 2025 (i.e., impacting the tax period of 2025).
Among the most significant changes affecting the broadest group of taxpayers, effective from January 1, 2024, are:
- a new definition of the term "building site" (stavební pozemek) – in this case, a tax return needs to be submitted for 2024
- a building site is now also defined as land already built upon with a taxable building, where the construction of another taxable building is also ongoing (in practice, this applies to situations where the taxpayer builds several taxable buildings in succession on one piece of land without dividing the land into parts under construction and not under construction). According to previous legal regulations, plots were not considered building sites if they had already been built upon with a taxable building.
- New definition of the term "reinforced area of land" (zpevněná plocha pozemku) – in this case, a tax return needs to be submitted for 2024.
- a reinforced area of land is now defined as land or part of land that is used for business purposes or that an entrepreneur includes in their assets according to the income tax law, whose surface is reinforced by a building without a vertical load-bearing structure according to the building law, including the area of a sidetrack, pool, or tank, if these are not taxable buildings.
- In the new definition of the reinforced area of land, the connection to the type of land was omitted compared to the existing legal regulation (i.e., not only “other type of area” lands or built-up areas and courtyards are considered as reinforced areas of land).
- Increase in tax rates by approximately 80% on average – in this case, a tax return does not need to be submitted for 2024.
- Increased tax on residential buildings that provide accommodation in some rooms or apartments, if they have not yet been declared to be residential buildings with the tax rate for business – in this case, a tax return needs to be submitted for 2024.
- Introduction of an inflation coefficient – in this case, a tax return does not need to be submitted for 2024.
- for the tax period of 2024, the coefficient amounts to "1".
- The change in the inflation coefficient will be announced by the Ministry of Finance in the Collection of Laws by June 30 of the calendar year immediately preceding the tax period.
- Local coefficient – in this case, a tax return does not need to be submitted for 2024.
- A municipality may, by a generally binding ordinance, set a local coefficient in the range of 0.5–5.0 as up to now, i.e. for the entire territory of the municipality or for an individual part of the municipality (significant changes in determining the local coefficient have delayed effectiveness from January 1, 2025).
From January 1, 2025, municipalities will also have the right to set a so-called coefficient by a measure of general nature (koeficient opatřením obecné povahy) and thus determine the coefficient only for selected groups of real estates and land (the groups will correspond to the prevailing purpose of the use of real estate or land).
Given the number of changes effective from January 1, 2024, we recommend all taxpayers of real estate tax to thoroughly review the correctness of reporting real estate in the tax return.
We will be happy to assist you with the revision or preparation of the tax return for the year 2024.
Download PDF: Increasing in Real Estate Tax since 2024
