Ministry of Finance issued a draft decree on calculating floor area for VAT, preparing for real estate VAT changes under the 2024 consolidation package, which goes into effect on 1 July 2025.
The Czech Republic’s Ministry of Finance released a draft decree on calculating the floor area for VAT. The guidance was issued in preparation for upcoming changes to VAT laws affecting real estate and construction under the 2024 consolidation package, which goes into effect on 1 July 2025.
In 2023, the Czech government introduced major changes to the tax legislation called the “Consolidation Package,” which took effect on 1 January 2024.
The most significant changes involve VAT rates, with a new single reduced rate of 12% replacing the current two rates of 15% and 10%. Retroactively applicable from 1 January 2024, the Czech Republic will have two VAT rates: a standard rate of 21% and a reduced rate of 12%.
Additionally, the real estate tax will increase, and from 2025, an “inflation coefficient” will automatically adjust property tax annually for inflation.