Prague’s city hall is pushing for the VAT rate paid by buyers of new apartments in the city to be reduced from 15 to 10 percent. At the same time, it’s supporting moves to cancel the sales tax paid on property deals. “I consider it hypocritical for the government to speak about the necessity to solve the unaffordability of housing while at the same time collecting 15 percent VAT for every flat and another four percent when it’s sold. That raises the price of a CZK 5m flat by nearly one million crowns,” said Hana Marvanova, a city council member in an interview with E15. “We’re working with experts to prepare a tax package that would support housing.” VAT is currently collected on the acquisition of all flats that received occupancy permits within the last five years. The city assembly recently agreed to allow individual municipalities to set their own rates for the current real estate tax which is paid annually all owners. It’s expected that most will choose to increase rates.
