Many expats keep their flat when they move in with a partner, buy a second apartment as an investment, or still own a home in their country of origin. Rent is taxable income in the Czech Republic, and it goes in your personal income tax return. How it is taxed depends mostly on one question: do you rent the flat out long-term, or to tourists for a few nights at a time?
Long-term rent: §9 of the Income Tax Act
Classic rent, where a tenant lives in the flat for months or years under a lease (nájemní smlouva), is rental income under §9 (příjmy z nájmu). It is not a business:
- You do not need a trade license (živnostenský list).
- You pay no social security or health insurance on it, only income tax.
- Renting out a flat for living is exempt from VAT, so even a VAT payer charges no VAT on residential rent.
The income is the rent you receive in the calendar year. Utilities the tenant pays you and pass on to the suppliers (energy, water, the building's service charges) are not your income when you settle them at cost; a deposit is not income either, unless you keep it, for example for unpaid rent.
Expenses: 30% flat or your real costs
You deduct expenses from the rent in one of two ways, chosen per year:
| Method | How it works | Good when |
|---|---|---|
| Flat expenses (výdajový paušál) | 30% of the rent counts as costs, up to 600,000 CZK of expenses a year. No receipts needed. | Your real costs are low; you want simple bookkeeping. |
| Real costs | You deduct what you actually paid: repairs and maintenance, the building's fund for repairs, property tax, insurance, mortgage interest, and depreciation of the flat itself (the purchase price spread over 30 years). | You bought the flat recently, have a mortgage, or did a large repair. |
With real costs, depreciation is often the largest item, but it needs proper records: the purchase price, the date the flat was first rented, and the depreciation schedule. Mortgage interest on a rented flat is a cost of the rent; it can then not also be claimed as a deduction for your own housing.
When your real costs exceed the rent, the loss never lowers the tax on your salary. It can only be set off against your other non-employment income in the same year, for example from a business, or carried forward to the next five years. Losses in other income (§10), for example from selling shares, work differently: they cannot be set off against anything else.
Is claiming a rental loss worth it? Often not. You must be able to prove every cost, and a loss, especially on property abroad, is a common reason for the tax office to ask questions: foreign invoices and contracts then have to be translated, and the letters go back and forth for months. When the loss is a few thousand euros, we usually claim costs only up to the rent, so the rental result is zero, and keep the calculation and the documents in your records in case the tax office asks.
Do you have to file?
Employees usually have their tax settled by the employer. Rent changes that: with other income above 20,000 CZK a year next to a salary, you must file your own tax return. The 20,000 CZK test looks at the income itself, not at the rent after expenses. See do I have to file a Czech tax return as an employee?
The rent is added to your other income in the tax base, so it is taxed at 15%, and at 23% on the part of your total tax base above 1,762,812 CZK a year.
Property abroad, or a Czech flat while you live abroad
- You live here and rent out a flat abroad. As a Czech tax resident you declare your worldwide income, so the foreign rent goes in your Czech return too. Under most double tax treaties the country where the property is may tax the rent first; the treaty then decides how the Czech Republic avoids double tax (exemption or credit). See foreign income and double tax treaties.
- You moved away and still rent out your Czech flat. Rent from Czech property stays taxable here, also for non-residents, so you file a Czech tax return as a non-resident. See leaving Czechia.
Airbnb and other short-term rentals: usually a business
Renting to tourists for a few nights, with cleaning, fresh linen and check-in, is not "rent" in the tax sense. It is an accommodation service, which usually means:
- A trade license for accommodation services (ubytovací služby), a free trade without special qualifications, before your first guest.
- The income goes in §7 (self-employment), with 60% flat expenses or your real costs, and with social security and health insurance on the profit, like any trade license.
- VAT-light registration (identified person, identifikovaná osoba): Airbnb and Booking.com charge their commission from abroad. Receiving that service makes you an identified person, even with no other VAT obligations: you register, and in each month with a commission invoice you calculate and pay 21% Czech VAT on the commission yourself.
- The local tourist fee (poplatek z pobytu) per guest and night, set by each municipality and paid to the town. It is not your income. In Prague the platforms collect it in some cases.
- Guest registration with the foreigner police for foreign guests.
Whether a short-term rental is §7 or §9 is decided by what you actually provide, not by the platform. Because it brings a trade license, insurance and VAT with it, a short-term rental is worth discussing before you list the flat. Everything about trade licenses is on tradelicense.cz.
Property tax is separate
Owning the flat also brings a small yearly property tax, with its own return by 31 January in the year after you bought it. See property tax: who files by 31 January.
This guide is general information, not personal tax advice. Taxbot answers follow-up questions from our guides: ask Taxbot.
Related
- Personal income tax return (our service)
- Property tax return (our service)
- Foreign income and double tax treaties
- The Czech personal income tax return in detail (tradelicense.cz)
Official sources: Income Tax Act No. 586/1992 Coll., §7, §9 and §38g (zakonyprolidi.cz); Financial Administration (financnisprava.cz); VAT Act No. 235/2004 Coll., §6g and §56a.
