The poor condition of the building, which makes it impossible to use at all, does not mean that there is no need to pay property tax. Grant Thornton’s advisory group tax experts point to a recent interesting ruling by the Supreme Administrative Court (SAC). SAC decided to end the obligation to pay real estate tax and came to the conclusion that it should be paid even for unusable buildings. Whether real estate fulfills its function is not important.
The case specifically concerned a non-functional hotel that was in poor condition, had walled windows and therefore could not be and was not used as a hotel. “According to the decision of the SAC, it is not important whether the property actually fulfills its function and it is possible to use it, but whether the building meets the legal definition of the tax subject and the definition of the building according to cadastral law,” says Lukáš Pflug from Grant Thornton. It must therefore be a completed or used above-ground construction located on the territory of the Czech Republic, connected to the ground by a solid foundation, which is spatially concentrated and largely enclosed on the outside by perimeter walls and a roof structure. According to the court, the definition of the building was met in this case, even though the building was in a desolate state.
“According to the court, the building will cease to be subject to real estate tax only if a final consent to the removal of the building is issued, its removal has been legally ordered or if the perimeter walls have been completely destroyed. The termination of taxation is therefore not related at all to the actual use of the building, nor to the impossibility of using it due to its poor condition,” adds Lukáš Pflug from the grant group Grant Thornton.
