Taxation of Real Estate

An amendment to Act No. 235/2004 Coll., on Value Added Tax, came into effect on 1^st January 2016. This amendment introduces changes in the field of taxation of real estate and exemption from taxation.

New regulation implements i.a. the exemption from taxation in case of the transfer of a land plot. If the non-building plot does not form a functional unit with the building firmly united with the ground, it will be exempted from taxation.

The Act on Value Added Tax also introduces a new definition of the building plot for the purposes of this Act. This definition extends the scope of land plots that will be considered as building plots and that will be imposed the value added tax.

The taxpayer has the possibility to decide, that the sold land or specified real estate that would be exempted from taxation, will be taxed.