Cancelation of Real Estate Transfer Tax Approved

21. 9. 2020
Cancelation of Real Estate Transfer Tax Approved

As at 15 Sept 2020 the parliament definitely approved the Act on Cancelation of Real Estate Transfer Tax. The Act was also already signed by the President as at 18 Sept 2020. The obligation of real estate transfer tax payment is cancelled retrospectively for all transfers incorporated in the Cadastral register as of December 2019 or later. If the tax were already paid the tax payer can request the tax overpayment return.

The Act also includes the amendment of Article 4 Section 1/b of Income Tax Act i.e. the prolongation of tax exempt period for real estate sales from 5 to 10 years. The prolongation will apply for all real estate sales effective after 1 Jan 2021. Still it is possible to decrease the tax base by the interest paid on mortgage; however newly the maximum of such deduction amounts to CZK 150.000. The new limit applies for mortgages arranged after 1 Jan 2021. For mortgages arranged till the end of 2020 the old limit of CZK 300.000 will be still valid.

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