How much is the tax on rental income from a flat in the Czech Republic, and how do you pay it?

We all have to pay taxes, and that is a duty for every one of us. If you bought a property purely as an investment, you probably plan to rent it out. In that case, you will have to pay tax on the rental income. How much is the tax on renting out a flat, and how do you fit it into your tax return? We will share some practical tips.

Short answer. On rental income from a flat you usually pay tax at 15% of the tax base, that is, the rent reduced by actual expenses or a 30% flat-rate deduction. At rent of 15,000 CZK (about 690 USD) a month, that works out to 18,900 CZK (about 870 USD) a year, if you are already using the basic taxpayer tax reduction against your wage. If the rent is your only income, the basic tax reduction of 30,840 CZK (about 1,400 USD) covers the tax up to rent of 24,488 CZK (about 1,100 USD) a month. You still have to file a tax return above 50,000 CZK (about 2,300 USD) of annual income, and without state-paid insurance you have to pay health insurance.

The first thing you need to do

If you buy any property, you must file a tax return for the Real Estate Tax Act (zákon o dani z nemovitých věcí) in the following calendar year. This has to be done by 31 January of that year. So this is a different tax from the one you will pay on income from renting out a flat or non-residential premises.

An exception applies when you file the application to register the property in the land register near the end of the year and the land registry office does not decide on it by 31 December. In that case, you file the return by the end of the third month after the month in which the registration was entered (Section 13a of the Real Estate Tax Act). The real estate tax is paid by the owner of the flat, not the tenant (Section 8(1) of the same act).

Who has to pay tax on renting out a flat?

In theory, all legal entities and individuals who have income of this kind. People drawing a state old-age pension (starobní důchod) are in a more favourable position. It is true that they still have to file a tax return if their rental income for the year, before deducting expenses, exceeds 50,000 CZK (about 2,300 USD). But after deducting the 30% flat-rate expenses and the basic taxpayer tax reduction, the tax usually comes out at zero.

You do not pay social security or health insurance contributions on rental income. Those contributions are paid on employment and business income instead (Section 5b of Act No. 589/1992 Coll. and Section 3a of Act No. 592/1992 Coll.). But if you live only on rental income and are not covered as a state insuree, you pay health insurance as a person without taxable income, which in 2026 is 13.5% of the minimum wage of 22,400 CZK (about 1,000 USD), that is 3,024 CZK (about 140 USD) a month (Section 2 and Section 3b of Act No. 592/1992 Coll.).

For pensioners, dependent children including students, or job seekers, health insurance is paid by the state (Section 7 of Act No. 48/1997 Coll.). It is therefore advantageous for old-age pensioners to have this kind of passive income.

When you do not pay rental tax or do not have to file a return

The Income Tax Act (zákon o daních z příjmů) has no special exemption for renting out a flat. But you do not have to file a return if your taxable income for the year, calculated before deducting expenses, does not exceed 50,000 CZK (about 2,300 USD) (Section 38g(1)). An employee who has signed the taxpayer’s declaration with all their wage payers does not have to file one if other income, including rent, does not exceed 20,000 CZK (about 920 USD) a year (Section 38g(2)). This also applies to wages received successively from several employers.

The tax also comes out at zero when the basic taxpayer tax reduction of 30,840 CZK (about 1,400 USD) covers it in full (Section 35ba). This applies to people with no other taxable income, such as students or pensioners, whose state old-age pension is exempt from tax up to 36 times the minimum wage (Section 4(1)(g)). With the flat-rate expenses, the tax stays at zero up to rent of 24,488 CZK (about 1,100 USD) a month.

A self-employed person on the flat-rate tax (paušální daň) keeps that regime only if their rental income, together with capital and other income, does not exceed 50,000 CZK (about 2,300 USD) a year (Section 7a(1)). Otherwise they have to file a standard tax return, more in our article on the flat-rate tax.

A flat in the spouses’ joint property or in co-ownership

Rent from a flat in the spouses’ joint property is taxed by only one of the spouses (Section 9(2)); the law does not specify which one. If one of you has no other taxable income, their basic tax reduction can cover the rental tax. If you claim the spouse tax credit, rent declared by your wife counts towards her limit of 68,000 CZK (about 3,100 USD) in gross terms, before deducting expenses, but rent declared by you does not (Section 35bb(4)(g)).

Co-owners by share, for example siblings who inherited the flat, each tax their own part of the rent. If they do not split the income and expenses according to their co-ownership shares, they can only claim substantiated expenses and are not allowed to use the 30% flat-rate deduction (Section 12(2)).

What percentage is the tax, and what is it calculated from?

For tax on renting out a flat unit, there are two rates, 15% and 23%. Let’s look at an example of when the lower rate applies to you and when the higher one does.

The monthly rent for the flat is 15,000 CZK (about 690 USD), so for the year that is 180,000 CZK (about 8,300 USD). You need to deduct expenses from this income. You can claim either actual expenses or the flat-rate deduction. We leave the choice to you, just make sure you choose whichever is more favourable in your specific situation. For our example, we will claim the 30% flat-rate expenses. The expenses then come to 54,000 CZK (about 2,500 USD). The taxable base will be 180,000 CZK (about 8,300 USD) minus 54,000 CZK (about 2,500 USD), that is 126,000 CZK (about 5,800 USD).

Now, if your tax base for the year does not exceed 36 times the average wage (for 2026 that is 1,762,812 CZK (about 81,000 USD)), it is taxed at 15%. The part above this threshold is taxed at 23%. In our case, we therefore use the 15% rate. Tax on the rental income before applying any tax reductions comes to 18,900 CZK (about 870 USD).

How much of it you actually pay depends on your other income. If you are an employee and are already claiming the basic taxpayer tax reduction of 30,840 CZK (about 1,400 USD) through your employer, you will pay roughly this 18,900 CZK (about 870 USD) extra in your tax return. When the rent is your only income, the tax reduction covers the tax in full and the income tax is 0 CZK (0 USD).

How much tax you pay at different rent levels

The table calculates tax on rental income for 2026 at the 15% rate with the 30% flat-rate deduction; the base is rounded down to whole hundreds (Section 16(2)). The fourth column shows the tax an employee pays on top of the tax on their wage, and the last column shows the income tax of someone with no other taxable income.

The table shows only income tax. Anyone who lives solely on rental income and is not covered as a state insuree pays an additional 36,288 CZK (about 1,700 USD) a year in health insurance. If your expenses are higher than 30% of the rent, using actual expenses gives a lower tax. The 23% rate applies only to the part of the total tax base above 1,762,812 CZK (about 81,000 USD) (Section 16(1)).

Actual expenses or the 30% flat-rate deduction

The flat-rate expenses amount to 30% of rental income, up to a maximum of 600,000 CZK (about 28,000 USD) a year (Section 9(4)). They cover all expenses connected with the rental, so you cannot add anything else to them, and it is enough to keep records of income and a register of receivables (Section 9(5)). You cannot change the method of claiming expenses retroactively for a year for which you have already filed a return.

Actual expenses pay off when they exceed 30% of the rent for the year. They include expenses incurred to earn, secure and maintain the rental income (Section 9(3) and Section 24(1)), which you must substantiate. You then keep records of income and expenses and a register of assets that you depreciate (Section 9(6)).

You can also depreciate the flat itself. A unit in an ordinary building falls, under Annex No. 1 to the Income Tax Act, into depreciation group 5, with a depreciation period of 30 years. The part of the unit’s acquisition price that represents the land is not included (Section 29(1)).

With straight-line depreciation, the rate is 1.4% in the first year and 3.4% in each following year of the acquisition price (Section 31). A flat with an acquisition price of 3,000,000 CZK (about 140,000 USD), excluding the share in the land, therefore gives a depreciation of 42,000 CZK (about 1,900 USD) in the first year and 102,000 CZK (about 4,700 USD) in each following year, while the flat-rate deduction on rent of 15,000 CZK (about 690 USD) a month comes to 54,000 CZK (about 2,500 USD).

You cannot deduct mortgage interest on a rented flat from the tax base the way you can for your own housing. The deduction under Section 15(3) and (4) applies only to housing for you, your spouse, your children, or the parents or grandparents of either spouse. With the flat-rate deduction you cannot add the interest on top (Section 9(5)); for actual expenses, it is Section 24(1) that decides.

Where to fill it in on the tax return

Now you know how to calculate the tax, but the key thing is to fill in the tax return correctly. If you are an employee or self-employed, fill in your tax return the way you are used to. The best place to do it is on the tax administration’s website, specifically in the My Taxes (Moje daně) portal.

You can look at Annex No. 2 and the instructions for filling it in beforehand among the tax forms on the Financial Administration (Finanční správa) website, before you get to filling it in yourself.

In the electronic environment of the Financial Administration, you will find this Annex No. 2 in the menu on the left, where you need to click through in order to fill it in. The amount for the rental or rentals is then added to the other figures in your tax return, and you find out the final amount you will pay in tax. Of course, it can also turn out that you have overpaid. That is why it might be useful for you to know how to deduct mortgage interest on your own housing.

By when to file the return and how to pay the tax

You file the return for 2026 on paper by 1 April 2027. If you file it electronically, you have until Monday 3 May 2027, because 1 May falls on a Saturday (Section 136 and Section 33(4) of the Tax Code (daňový řád)). If a tax adviser files it for you, the deadline is 1 July 2027 (Section 136(2)(b)).

The tax is due on the last day of the deadline for filing the return (Section 135(3) of the Tax Code). According to the Financial Administration, you pay it to your tax office’s (finanční úřad) account 721-matrika/0710, where the matrika code depends on which tax office you belong to. The variable symbol is your birth number (rodné číslo), the constant symbol is 1148.

When your last tax liability exceeds 30,000 CZK (about 1,400 USD), you pay advance tax payments in the following year. For tax up to 150,000 CZK (about 6,900 USD), these are two advance payments of 40% each, due by 15 June and 15 December; for higher tax, there are four quarterly advance payments (Section 38a of the Income Tax Act). An employee whose wage makes up at least half of the tax base does not pay advance payments.

Tax reductions and deductions from the tax base you can claim

Apart from the basic taxpayer tax reduction, which everyone is entitled to, you need to meet certain conditions. These conditions are different for each tax reduction, so we recommend finding out properly. So what possible tax reductions do we know?

• Basic taxpayer tax reduction
• Child tax credit for dependent children
• Spouse tax credit, since 2024 only with a child under 3 in the shared household
• Donations made
• Supplementary pension insurance (penzijní připojištění)
• Blood donation

The basic taxpayer tax reduction, the spouse tax credit and the child tax credit reduce the tax already calculated. Donations, blood donation and contributions to pension savings, the DIP or life insurance, on the other hand, are deducted from the tax base (Section 15), so they usually save 15% of the deducted amount.

USD amounts are approximate, converted at the Czech National Bank rate of 21.80 CZK per USD on 2 October 2026.