As part of the consolidation package, the Real Estate Tax Act has also been amended. Most of the changes will already be relevant for the upcoming year 2024. Although many of the changes will be reflected automatically by the tax authorities when assessing the tax, some partial changes (narrowing of certain exemptions) may require filing a tax return.
Increase in real estate tax rates
A significant change, which will affect virtually all taxpayers, is the increase in tax rates for almost all groups of real estate (on average by 80%). The only group of land where the tax rate is decreasing is unusable land (barren land, meadows, slopes and greenery).
Changes in coefficients and powers of municipalities
The amended law introduces a mechanism for automatic tax increases depending on price level increases in the economy. Starting from the 2025 tax period, the resulting tax on land, buildings and units will automatically be adjusted by the so-called inflation coefficient, the amount of which will be announced by the Ministry of Finance by way of a notice published in the Collection of Laws by 30 June of the year preceding the tax period.
The system of local coefficients is also being extensively modified, including an extension of the competence of municipalities to set local coefficients for real estate located on their territory. The possibility for municipalities to exempt certain land from tax by means of a general binding decree is also extended.
Automatic pre-filling of tax returns
At the beginning of October this year, the tax administration launched the service of automatic pre-filling of real estate tax returns. The tax return pre-fills all data that can be obtained from the Land Register or that are already in the tax administrator’s records. These data are pre-filled into the real estate tax return manual. The new service can only be used in pilot operation by users of the Tax Information Box (DIS+) on the MOJE DANĚ portal.
Certain other information relevant for the determination of the tax (e.g. real estate taxable by a person other than the owner by virtue of use, lease, usufruct, information on the fact that it is a building plot, real estate not registered in the Land Register, and information on the business activity in the taxable building/unit) is not pre-filled in the return. Therefore, it is necessary to check all the data downloaded and pre-filled and assess a number of other facts individually. At the same time, the service of checking the pre-filled data against the data in the Land Register can be used (this function can check against the data in the Land Register, for example, the correctness of the area of the land, the amount of the co-ownership share in the real estate, etc.)
The automatic pre-filling service will be particularly beneficial for taxpayers who own a small number of items of real estate. Taxpayers with a large real estate portfolio are not recommended by the tax administration to use the service. In any case, due attention should be paid to assessing the actual nature and condition of individual plots of land and buildings and analysing the possibility of their exemption. These data are usually not pre-filled, or may be outdated in the tax administrator’s records, and failure to take them into account may have quite significant consequences in the tax calculation at ever-increasing rates.