Czech tax on rental income: actual costs or the 30 per cent flat rate

A landlord with one flat in Prague can end the year in two very different tax positions with the same rent in the bank. In one, the tax office taxes almost everything the tenant paid. In the other, nearly a third of the rent is deducted before the calculation starts, with no receipts needed. The law gives every private landlord that choice, and many make it by default without comparing.

This explainer covers the main options for individuals who let property in Czechia. It is a general explainer, not legal or tax advice. Rates and limits carry a date and a pointer to the official source, because they get amended. For a specific case, ask a tax adviser or the Financial Administration.

The category: rental income

The Income Tax Act sorts personal income into categories. Salary is one. Business income is another. Letting property you own privately, outside a business, is a third: income from rental (příjmy z nájmu, section 9 of the Act). It covers flats, houses, garages and other assets, as long as the letting is not part of a business.

That matters twice over. The rules for working out taxable profit are specific to this category, and so is the treatment of social security and health insurance contributions, which we come to below.

Two ways to work out the profit

Rental profit is income less expenses, and the law offers two ways to arrive at the expenses.

Actual expenses. You deduct costs you can document and that relate to the income: depreciation (odpisy), repairs and maintenance, insurance, property tax, interest on a loan used to buy or improve the property, utilities you pay and do not recharge, and fees for management or accounting. You must keep invoices and records. If expenses exceed income, the treatment of the resulting loss is restricted, and the rules differ from those for business losses, so check how a rental loss may be used before relying on it (as of 2026; check the Financial Administration, financnisprava.cz).

The flat-rate expense (výdajový paušál). Instead of documenting costs, you deduct 30 per cent of the rental income, with expenses capped at CZK 600,000 a year (as of 2026; check the Financial Administration, financnisprava.cz). In practice the full 30 per cent applies up to annual rental income of CZK 2 million, and above that the deduction stays at CZK 600,000. You cannot combine the flat rate with actual expenses for the same income in the same year, so it is a choice for the year, and it rules out also deducting depreciation or loan interest on that income.

A worked comparison

Say an owner lets one flat for CZK 240,000 over the year (a round figure invented for illustration). With the flat rate, expenses are CZK 72,000 and the profit is CZK 168,000. Under the actual method, the owner would need documented costs above CZK 72,000 to come out ahead. A major repair, or a flat financed with a loan, might get there. Without those, the flat rate is simpler and often kinder.

The reverse happens too. Someone who bought a flat recently, borrowed to do it and renovated it can have documented costs well above 30 per cent in the early years. That owner may do better with actual expenses, and should compare year by year, since the choice is made for each tax year. Do the sum both ways before filing, not after.

Tax rate and the return

The profit is added to the rest of your taxable income and taxed at the personal rate of 15 per cent, with a higher rate on the part of total income above a threshold linked to the average wage (as of 2026; check the Financial Administration, financnisprava.cz). Nobody collects it for you on a private let. You report it in the annual return, normally due at the start of April, with later dates for electronic filing and for filings by a tax adviser (as of 2026; check the Financial Administration, financnisprava.cz). Our guide to filing a Czech personal tax return describes the process, and the piece on employee income tax explains how the rates apply.

Contributions and the trade question

Rental income under section 9 does not by itself create social or health insurance contributions, unlike business income (as of 2026; check the Financial Administration, financnisprava.cz). Someone with only a salary and private rent does not pay contributions on the rent as a self-employed person would. Our explainer on social security contributions shows when they do apply.

The line between private letting and business is not always obvious. A landlord who provides substantial extra services, hotel-style, or lets in an organised, trade-like way, may find the income belongs in the business category. That brings a trade licence, a different expense system and contributions. Short-term lets through online platforms are a common grey area, and the answer turns on the facts. A trade licence is explained in how to get a Czech trade licence as a freelancer, and the wider regime in becoming self-employed.

Platforms are also being made to report. EU Regulation 2024/1028 on data collected from short-term accommodation rental services has applied since 20 May 2026, so hosts' details increasingly reach the authorities (check the European Commission, europa.eu, and the Ministry for Regional Development, mmr.gov.cz). Municipalities charge a local fee on visitors' stays, and a landlord letting short-term should check the municipality's rules.

Landlords who are not Czech tax residents

A foreign owner letting a Czech property usually has Czech-source income, taxable here, and files a return here. Whether the home country also taxes it, and how it gives credit, depends on the double tax treaty between the two countries. See double tax treaties and Czechia and Czech tax residency. The annual property tax is a separate matter, covered in Czech annual property tax. For the tenant's side of the contract, see how to rent a flat in Czechia.

When the flat is eventually sold, a different set of tests applies; our explainer on tax on income from a property sale describes them. Anyone weighing a buy-to-let can also run a first-pass figure with the rental yield calculator on Hypoteky.com, a modelling tool that gives no tax advice.

Companies and other forms

Where a company owns the property, the rent is the company's income, part of its profit and taxed at the corporate rate on actual costs only. The flat rate is for individuals. See our overview of corporate income tax.

Frequently asked questions

How is private rental income taxed in Czechia?

As rental income under its own category in the Income Tax Act. The profit is added to your other taxable income, taxed at the personal rate and reported in the annual return.

What is the flat-rate expense?

A deduction of 30 per cent of rental income, with expenses capped at CZK 600,000 a year (as of 2026; check the Financial Administration, financnisprava.cz). It replaces documenting actual costs for that income.

Do I pay social security on rent?

Private rental income in this category does not by itself create contributions, but letting as a business can (as of 2026; check the Financial Administration, financnisprava.cz).

Can I deduct mortgage interest?

Interest on a loan used for the let property can count under the actual-expense method. It cannot be added on top of the flat rate.

This is a general explainer, not legal or tax advice.