Law and tax · 20 August 2026 · 8 min read
Prague apartment building sales: tax, holding periods and VAT
The tax implications of a sale can be as significant as the difference between two offers. Yet many owners only start considering them after signing the sale contract. This article is not a substitute for tax advice, but it will help you ask the right questions.
Sales by individuals: the holding period test
An individual's income from selling a property may be exempt from income tax if the statutory holding period between acquisition and sale is met. The required period has changed in recent years and depends on when you acquired the property. Additional conditions apply, for example, to properties included in business assets.
From 2025, certain types of exempt income are also subject to an annual limit, above which the exemption does not apply. A tax adviser can assess whether and how this affects you based on your circumstances.
Inheritance and gifts
For inherited properties, the deceased's period of ownership may count towards the holding period test, subject to certain conditions. The rules are detailed and worth checking before you set a date for the sale.
Sales by companies
If a company owns the building, the profit from the sale is subject to corporate income tax, and distributions of profit to its owners are subject to additional withholding tax. An alternative may be to sell the ownership interest in the company (a share deal), which is subject to different rules, including a holding period test for ownership interests. Choosing the structure requires a calculation of the financial implications.
VAT
The transfer of a building is generally exempt from VAT once a certain period has elapsed since approval for use or a substantial alteration, with an option to apply VAT under certain conditions. If you have carried out extensive refurbishment or claimed input VAT deductions on the building in recent years, VAT requires careful assessment. An error could mean having to repay those deductions.
What to prepare for your tax adviser
Property acquisition tax has been abolished, so you no longer need to address it when transferring a property. The other tax questions still need attention.
- the date and method of acquisition (purchase, inheritance, gift or capital contribution),
- whether the property has been included in business assets,
- a summary of capital expenditure and refurbishment works, with completion dates,
- details of input VAT deductions claimed,
- the planned sale structure and intended use of the proceeds.
Frequently asked questions
Does the buyer or seller pay transfer tax?
Property acquisition tax has been abolished. The seller is responsible for addressing income tax on the sale according to their circumstances.
Can you help with tax?
We work with tax advisers and lawyers; their assessment forms part of the sale preparation process.
Authors: Maria Kopřivová, Michal Kopřiva, Pura Vida Property Advisory. Published 20 August 2026. This article is for information only and does not replace legal or tax advice.
