Property Tax Increase in Prague

The capital city of Prague has issued a general municipal regulation, increasing the local coefficient value from 1 to 2. Based on the increase in the coefficient, the property tax has doubled. This will mainly affect the property tax on office buildings, shopping malls, and other commercial premises.

The coefficient should not double only in the case of housing units (and non-housing units used for non-commercial purposes) in selected city districts (e.g. Prague 5, Prague 9); these districts decided to compensate for the increase in the local coefficient by reducing the coefficient applied to units, making the impact minimum or non-existent.

The changes in coefficient themselves do not give rise to the obligation to file a tax return; the higher tax liability will automatically be taken into account by the tax administrator in the tax calculation for the current year. Therefore, you might learn about the doubled tax liability in May 2020, when you receive a money order from the tax administrator.

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