The Czech Republic canceled a 4% real estate transfer tax as the president signed the draft law last week. The aim of the tax abolishment is to help pandemic-damaged property market.
During the coronavirus crisis government approved the draft law on transfer tax abolition in order to prop the residential buyer up and boost the economy. The transfer tax will be canceled retroactively for buyers with a transfer approved by the land registry from December 2019. Those who have already paid the tax can apply for a refund.
Canceling the tax is not the only think the bill will change. The tax deduction of the total paid interest will be possible up to the maximum of CZK 150,000, which is just a half of the original maximum amount of money. This new limit will be applicable for the mortgage loans signed after January 1, 2021.
Third main change that the bill will brought is extending the holding period for an investment loan from original 5 year to 10 year. Lengthened holding period will also be applicable for loans signed after the beginning of the new year.