4% property acquisition tax: to pay or not to pay?
Updated: Jun 25
Many have heard that a 4% tax on the acquisition of a real estate should not be paid, for example, when buying an apartment in a new building. And they are very surprised when they still have to pay the tax.
Let's figure it out.
The basic rule is that you ALWAYS have to pay 4% acquisition tax when acquiring plots of land, as well as second-hand real estate.
When will you NOT pay this tax?
- if you buy a real estate in cooperative ownership (družstevní byt), because you are not buying a real estate, but the right to be a member of a cooperative;
- if you transfer an apartment from the cooperative ownership to the private one;
- if you inherit a real estate;
- if you receive real estate as a gift;
- if you buy a real estate in a new project built no more than 5 years ago, and you buy it directly from the builder.
But there are cases when you WILL have to pay the tax even when buying a new project:
- the developer built a new building using the external walls of an existed building. This will include all the revitalization projects of the old residential buildings;
- you buy an apartment in a new project built from scratch from a person or a company that bought the flat from the developer earlier. Even though it’s a completely new apartment in which no one has lived because the title transfer has been made, it’s considered as a second-hand real estate and the tax should be paid;
- you buy a new family house with a land plot directly from the developer. And in this case, you will have to pay tax on the acquisition of а real estate, but not from the house value – instead from the plot around it.
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