Property Taxes in the Czech Republic — Sale, Gift, and Inheritance
Tax questions are one of the main reasons people delay decisions about their property. How much will I pay when selling? Is gifting to my children taxed? What about inheritance? In this guide, we explain the current Czech tax rules for 2026 — simply and with examples.
Tax on Selling a Property
The Time Test — Key to Tax Exemption
Income from selling a property is exempt from income tax if:
- You have owned the property for more than 10 years (from acquisition), OR
- You have owned the property for more than 5 years AND had your permanent residence (trvale bydliste) there for at least 2 years immediately before the sale
If You Do Not Meet the Time Test
The income from the sale is taxed as personal income:
- 15% of the difference between the sale price and the acquisition cost (+ expenses)
- 23% on the portion exceeding 36 times the average wage (approx. CZK 1.58 million / ~EUR 63,000 in 2026)
Practical Example
Mrs Novakova (68 years old) has owned a flat in Prague since 2005 (21 years). Sale price: CZK 5,000,000 (~EUR 200,000).
- Time test: Met (owned for more than 10 years)
- Income tax: CZK 0 — the income is exempt
Tip for HomeGrif clients: Most HomeGrif clients have owned their property for decades and meet the time test. Income from the buyback is therefore typically exempt from tax.
Gifting a Property
Gift Tax — Abolished, But...
A standalone gift tax was abolished in the Czech Republic in 2014. However, gifts are now assessed under income tax rules:
Exempt are gifts between:
- Direct-line relatives (parents — children — grandchildren)
- Spouses
- Siblings
- Persons living in the same household for more than 1 year
Notification Obligation
If the value of the gift exceeds CZK 5,000,000 (~EUR 200,000), the recipient must file a notification with the tax office — even if the gift is exempt from tax.
Risks of Gifting
Gifting a property to children (vyminek / traditional retirement arrangement) has tax advantages, but carries other risks:
- Children can sell the property
- If children face foreclosure, the property is at risk
- Parents receive no financial compensation
Inheriting a Property
Inheritance Tax — Abolished
The Czech Republic has had no inheritance tax since 2014. Inherited property is not subject to any income tax.
Costs of Probate Proceedings
- Notary fee (court commissioner): depends on the estate value, typically CZK 10,000-30,000 (~EUR 400-1,200)
- Land Registry filing: CZK 2,000 (~EUR 80)
- Possible expert appraisals: CZK 3,000-10,000 (~EUR 120-400)
The Problem with Inheritance
The main disadvantage of inheritance is not tax, but timing: children receive the property only after the parents' death. If they need financial help now (mortgage, children's education), the inheritance does not help.
More in the article Inheritance During Parents' Lifetime.
HomeGrif and Taxes
Buyback = Property Sale
From a tax perspective, the buyback with HomeGrif is assessed as a property sale. The same rules apply:
- Time test met (10 years or 5 years + permanent residence): Income is exempt from tax
- Time test not met: 15% tax on the difference between sale price and acquisition cost
The Typical HomeGrif Client
Most HomeGrif clients:
- Have owned their property for decades
- Have their permanent residence there
- Meet both time tests
- Pay zero income tax on the sale
Monthly Annuity and Taxes
The monthly annuity from HomeGrif is part of the overall purchase price (not rental income). The tax assessment applies to the entire transaction — if the sale is exempt, all payments are exempt.
Annual Property Tax (Dan z Nemovitych Veci)
Do not confuse this with income tax on a sale! The annual property tax is paid by the property owner each year:
- Due by 31 May each year
- The amount depends on the type, size, and location of the property
- Typically CZK 1,000-5,000 per year (~EUR 40-200) for a flat
- After transfer to HomeGrif, the new owner (HomeGrif) pays this tax
Tax Impact Comparison
| Situation | Income tax | Property tax | Notification required |
|---|---|---|---|
| Sale (owned 10+ years) | CZK 0 | Paid by buyer | No |
| Sale (owned less than 10 years) | 15-23% of gain | Paid by buyer | Tax return |
| Gifting to children | CZK 0 | Paid by recipient | Over CZK 5 mil. yes |
| Inheritance | CZK 0 | Paid by heir | No |
| HomeGrif (10+ years) | CZK 0 | Paid by HomeGrif | No |
Recommendations
- Check the time test — how many years you have owned the property
- Consult a tax advisor — every situation is individual
- Do not underestimate the notification obligation — the penalty for non-compliance can be up to 15% of the value
- Try the HomeGrif calculator — the indicative calculation is anonymous and non-binding
Further reading:
