Prague to amend property tax ordinance, councillors approve

Prague will adjust the coefficients for calculating the property tax in some parts of the city, which will increase again for residential properties from next year. For commercial properties, the tax will rise everywhere. The amendment to the ordinance was approved by city councillors last night. Because of the consolidation package, the tax rate across the country has already roughly doubled this year.

The property tax is calculated according to the built-up area, and land is taxed separately. The tax base per square metre for residential properties has increased from two to 3.5 crowns since January. This base is then multiplied by two coefficients - local and size.

In Prague, the local coefficient is now set citywide at two, while the size coefficient could be set by the city districts between 2.5 and 5. At the same time, the municipality will slightly reduce the local coefficient to 1.5 for residential properties, while it will increase it to three for commercial properties.

While this year a resident of a 70-metre flat in a municipality with a coefficient of 2.5 will pay a tax of CZK 1,470 a year, next year it will be at least CZK 1,985 with the new coefficients. According to councillor Zdeněk Kovářík (ODS), several districts asked to keep the local coefficient at the level of two, which the city granted.

People and companies paid CZK 14.6 billion in property tax by the end of May, 86.5 percent more than at the same time last year, according to Finance Ministry data. Last year, before the tax increase, the full year collections were CZK 12.45 billion. All property tax revenue goes to municipal budgets.

Source: CTK