In the Czech Republic, the real estate tax and the tax for the exclusion of land from the land fund are extremely low. The price of removing a square metre by a few hundred crowns is a good investment and should lead to more investment in brownfield development. Environment Minister Petr Hladík (KDU-ČSL) said. The fee for exclusion should be increased on the basis of an amendment to the Act on the Protection of Agricultural Land Fund, which was approved by the government. According to the new law, it should not be possible to use the best agricultural land for the construction of large logistics and shopping centres or photovoltaic power plants.
“I think that everywhere in the West, they pay significantly more for the use of agricultural land. And I think it is right that the Czech Republic is tightening the rules. It is necessary to build on brownfields and former railway stations and sites. That is where development should primarily be conceived. It is necessary to build more sensibly and at a higher level,” said Hladík. He added that according to data from the Ministry of Industry and Trade, more than 60,000 square kilometres of brownfields are registered. There are thousands of hectares of similar land in Prague and the capital should focus mainly on building in these areas.
The 2022 State of the Environment Report shows that between 2014 and 2022, 2,110 brownfield sites with a total area of 5,616 hectares were newly registered in the Czech Republic, according to the Ministry of the Environment (MoE). In 2022, 174 sites with a total area of 279 hectares were removed from the National Brownfield Database and either sold or regenerated.
Agricultural land in the Czech Republic is divided according to quality into five classes. The best quality agricultural land is classified in the first and second protection classes according to the so-called ‘soil ecological unit’. It is this type of land that would be banned from construction under the amendment. Solar energy installations could only be built on agricultural land as agrovoltaic installations.
The proposal also provides for an increase in the fees for the taking of land falling into the other three classes. According to the findings of Hospodářské noviny, while now builders pay two rates for their land acquisition, CZK 24 per square metre in the third class and CZK 18 in the fourth and fifth classes, the new rates would be CZK 300 and CZK 240.
A number of property developers have already expressed their opposition to the amendment. For example, in November Miroslav Kotek, head of the industrial real estate department at real estate consultancy Colliers, said that the Czech Republic is currently facing a shortage of land for the construction of modern industrial complexes.
This is reflected in the high price of land currently on offer. The limitation of the area for construction and the increase in the price of the fee for removing the area from the land fund would necessarily have to be reflected in the total investment and therefore in the rent. The Czech environment could thus cease to be attractive for many foreign investors, Kotek believes. This is despite the fact that the Czech Republic often acts as a springboard for a number of Western companies looking to expand into Eastern Europe, he added.
Source: CTK
