Property tax trends in the Czech Republic

Abstract

PurposeThis study aims to deal with the taxation of immovable property in the Czech Republic. This tax is significant revenues for the budget of the municipalities where the immovable property is located.Design/methodology/approachTo achieve this paper's objective, the author used standard positivist economic methodology. For a dependency analysis between the examined factor, regression analyses were used.FindingsThe tax rates changed only twice over the whole analysed period 1993-2024. It also follows that the share of property tax in the total tax revenue is decreasing. Due to the increase in the market price of the property, there is tax regressivity. The real tax burden on building plot increased only in municipalities with up to 600 inhabitants; in all other municipalities and cities, there is a decrease. Municipalities have options to increase tax revenue and tax burden. Many municipalities do not use this provision, even though the regression analysis results valid a positive impact on tax revenue.Research limitations/implicationsA slight limitation of this study is the fact that the amount of the tax revenue for the year 2025 is not included in the input database. This data are not available.Practical implicationsIn this study, there are practical recommendations which could be implemented into legislation. These recommendations are in the area of property valuation or the area of implications of inflation to tax rates.Social implicationsProperty tax reflects social and societal aspects. This is characterised by the fact that permanent residential properties have lower tax rates. Furthermore, in municipalities with a smaller population, the tax burden on permanent residential properties is lower. The reason is the different levels of infrastructure.Originality/valueAnalysis long period from the setting up of the Czech Republic to the present time.