Changes resulting from abolition
The usual rule applies here too: nothing comes for free. 🙂
The first offsetting measure is an extension of the holding-period test for income tax on property from 5 years to 10 years. The previous test means that if, for example, you buy a house on 1.12.2020 in which you will not live yourself and sell it within 5 years (before 1.12.2025), you must pay the tax office 15% of the difference between the sale and purchase prices. This period is now being extended to 10 years. The new rule applies to properties acquired after 1.1.2021.
Another offsetting measure concerns residential mortgages taken out after 1.1.2022. If you plan to buy a house or flat with a mortgage in 2022, you will want to know that you will now be able to deduct interest paid to the bank from your income tax base only up to CZK 150,000 a year. The current limit is twice that, CZK 300,000 a year. If you plan to buy a house or flat for your own home around the turn of 2021 and 2022 with a mortgage whose annual interest will exceed CZK 150,000, I recommend arranging the mortgage in good time.
If you are unsure, do not hesitate to get in touch and we will look at it together. 🙂