ISSN  2451-0475
Analyses and Studies
Analizy i Studia
No  2 (8)  |  November  2019
Analyses and Studies CASP	 13	 No 2 (8)  |  November 2019
p. 13–31
Major Problematic Issues in the Property
Taxation in the Czech Republic
Michal Radvan*
This article aims to open the debate on the recurrent property tax in the Czech Republic,
to define most important problems of the existing legal regulation and to set the list
of possible solutions de lege ferenda. The hypothesis that the immovable property tax is
a good tax and a traditional part of the Czech tax system, was confirmed. The most problematic
issue is the low tax revenue. However, ad valorem system does not seem to be
the solution and the unit system (area) tax base should be retained. There should be one
maximum tax rate in the legislation for every type of property, and municipalities should
have the right to introduce their own specific tax rates below that level. At the same time,
there should be another rate (standard rate) in the legislation for those municipalities that
do not set their own specific tax rates.
Keywords: immovable property tax, property tax, tax law, ad valorem
JEL Classification: K 34
	 *	 Doctor of Law (Ph.D.), associate professor  •  Masaryk University Brno, Czech
Republic  •   michal.radvan@law.muni.cz •  ORCID: 0000-0002-9858-4555
		Introduction
Immovable property tax in the Czech Republic is
one of the oldest and most traditional taxes. Despite
criticism that property taxes are the second
or even the third taxes taxing still the same income
of the taxpayer, it has its place in every tax
system all over the world. There are many advantages
of this tax: it is very simple to identify the
property and the taxpayer, it is difficult to hide
the property and avoid taxation, the concept of
tax is relatively simple, etc. However, the greatest
benefit of this tax is the fact that the exclusive
beneficiaries of the immovable property tax are
municipalities. Thus, the main function of the
immovable property tax is its fiscal function as it
ensures a regular income for municipal budgets.
This article aims to open the debate on the recurrent
property tax in the Czech Republic, to
define most important problems of the existing
legal regulation and to set the list of possible
solutions de lege ferenda. It works with the
hypothesis that the immovable property tax is a
good tax and a traditional part of the Czech tax
system, especially because of the revenue for the
municipal budgets. The first part of the contribution
presents the critical analysis of the de lege
lata regulation of the immovable property tax in
the Czech Republic. In the second part, the most
important problematic aspects connected with
Major Problematic Issues in the Property Taxation in the Czech Republic
Analyses and Studies CASP	 14	 No 2 (8)  |  November 2019
the contemporary regulation of the property
taxation are discussed, using the analytical and
comparative methods. It deals primarily with the
low revenues for public budgets and the inadequate
possibilities of municipalities to influence
the immovable property tax, and the issues of tax
administrators. The third part is focused on the
method of tax law regulation and related tax law
principles, so that in the conclusions it is possible
to summarize and synthetize existing knowledge
and present some solutions de lege ferenda
in this area. Most of the existing scientific literature
dealing with the property taxation in the
Czech Republic was published by Radvan, as obvious
from the references.
	 Immovable Property Tax
Regulation
	 Brief Historical Overview
Property taxes have a long tradition not only at
the territory of the Czech Republic. The first taxes
on cultivated land and on town houses appeared
in the Middle Ages [Široký, 2003, p. 25–38] and replaced
in 1517 with the general tax on property.
Independent Czechoslovakia was created in 1918
and the tax reform of 1927 resulted in both a land
tax and a domestic (building) tax (Act no. 76/1927
Sb. z. a n., on direct taxes) [Engliš, 1929, p. 142–
154; Freudenfeld, Kovanda, 1937, p.  318–406;
Pimper, 1936, p. 300–301]. After the communist
revolution in 1948, the agriculture land tax was
established and the domestic tax was extended to
buildings used for business and recreational purposes
[Zahálka, 1984, p.143]. In 1957, a local charge
on flats and apartments was introduced.
After the so-called Velvet Revolution in 1989,
the government established a new tax system
which became effective from the beginning of
1993 for the independent Czech Republic. The
Real Estate Tax Act (Act no. 338/1992 Sb.) provided
for two taxes on real estate: the land tax and
the building tax. The building tax included a tax
on flats/apartments and a tax on non-residential
premises. In 2014, after the reform of the civil law
in the Czech Republic, the title of the 1993 Act
was changed to Immovable Property Tax Act
and the title of the tax to the Immovable Property
Tax. Again, this Act provided for two taxes
on immovable property: the land tax; and the tax
on buildings including houses, flats/apartments
and non-residential premises. This Act specifies
most of the structural components of the tax,
such as the taxpayers, the objects of taxation, the
tax base(s) and the basic tax rates. The correction
components (i.e. tax exemptions and the power
of the municipality to vary the tax rates) are also
included, as well as the nature etc. of the system
of tax administration. [Radvan, Kranecová, 2019,
p. 25–38] The object of taxation is as an immovable
property situated only within the territory of
the Czech Republic, but not abroad, regardless of
the nationality of the taxpayer.
	 Land Tax
Generally, the object of the land tax is land within
the territory of the Czech Republic registered
in the cadastre (land register). There are several
categories of land liable to tax: agricultural land
(such as arable land, hop-fields, vineyards, gardens,
orchards and permanent grass pastures),
commercial forests, ponds used for fish-farming,
built-up areas and courtyards, development
land, flat structures (e.g. parking lots), and other
areas (playing grounds, natural swimming pools,
cemeteries, etc.). On the other hand, some land
is excluded from the object of taxation (there is
a negative list of the land tax objects): e.g. land
within the ground plan of a building (i.e. land
under the building), certain woodland (protected
forests and forests of special interest), watercovered
areas (except ponds used for commercial
fish-farming), land used for State defence, and
land owned by the owner of the unit (flat, nonresidential
premise) where the land is used together
with the unit.
The taxpayer for the land tax is generally the
owneroftheproperty.However,theleaseholderof
the land can also in certain circumstances be the
Major Problematic Issues in the Property Taxation in the Czech Republic
Analyses and Studies CASP	 15	 No 2 (8)  |  November 2019
taxpayer (land registered in the pre-digitized ca-
dastre,landmanagedbytheState,landtransferred
totheMinistryofFinance).Iftheowneroftheland
is unknown, the taxpayer is the user of the land.
The list of exemptions is very broad and very
often there is a condition for the exemption that
the land is not used for profit-making purposes.
In several cases, a tax return does not have to be
filed (land owned by the State, municipalities, regional
governments, and diplomatic representatives).
The reasons for exemptions are usually
public interests, ecological purposes, or reciprocal
international treaties. Some land is exempted
permanently (land owned by churches, schools
and universities, museums, galleries and hospitals,
and agricultural land with the exception of
gardens only at the discretion of the municipality),
other land is exempt only for a limited period:
1)	 Agricultural land for five years following
the year when such land was returned to
agriculture cultivation;
2)	 Woodlands for 25 years following the year
when such lands were returned to forestry
use;
3)	Land affected by a natural disaster for a
period up to five years to eliminate consequences
of natural disasters (at the discretion
of the municipality);
4)	 Land in special industrial zones designated
as such by the Government of the Czech
Republic up to five years (at the discretion
of the municipality).
The tax base in the case of land (built-up areas
and courtyards, development land, flat structures
etc.) is generally area-based, i.e. per square
metre, as ascertained on 1st January of the taxable
period. Only in some cases a modified ad valorem
system is applied:
1)  For agricultural land the tax base is determined
as a multiple of the actual area of the
land in square metres and the average price
per square metres of the land; the average
price is laid down in a decree by the Ministry
of Agriculture;
2.  For commercial forests and ponds used for
fish-farming, setting the tax base, the taxpayer
can choose between:
a)	 The price of the land as determined according
to the price regulations valid on
1st January of the taxable period, or;
b)	 The actual area in square metres multiplied
by 3.80 CZK.
The tax rate on agricultural land (arable land,
hop-fields, vineyards, gardens, orchards and permanent
grass growth) is generally 0.75 percent.
Only for permanent grasslands it is lower (0.25
percent) as this land has lower productivity. The
same lower tax rate of 0.25 percent is applied
for commercial forests and ponds used for fishfarming.
For the other types of land, the tax rate
is fixed per m2:
1)	 0.20 CZK for built-up areas and courtyards;
2)	 2.00 CZK for development land;
3)	 1.00 CZK for flat structures used for forestry,
agriculture or water management;
4)	 5.00 CZK for flat structures used for industrial
production, civil engineering, transTable
1: Location rent
Number of inhabitants / Municipality
Coefficient
Basic Reduced Increased
< 1,000 1.0 – – – 1.4
> 1,000 < 6,000 1.4 – – 1.0 1.6
> 6,000 < 10,000 1.6 – 1.0 1.4 2.0
> 10,000 < 25,000 2.0 1.0 1.4 1.6 2.5
> 25,000 < 50,000 2.5 1.4 1.6 2.0 3.5
> 50,000 + Františkovy Lázně, Luhačovice, Mariánské
Lázně, Poděbrady
3.5 1.6 2.0 2.5 4.5
Prague 4.5 2.0 2.5 3.5 5.0
Major Problematic Issues in the Property Taxation in the Czech Republic
Analyses and Studies CASP	 16	 No 2 (8)  |  November 2019
port, power and other agricultural production,
and for other business activities;
5)	 2.00 CZK for development land has, however
this is a basic tax rate and the effective
tax rate depends on whether the land
is located within a small village or a large
city. The basic tax rate is multiplied by a
coefficient called location rent based on
the number of inhabitants in the municipality
set in the act while the municipality
can increase or reduce the basic coefficient
by a generally binding ordinance (see
Table 1).
The final tax liability for taxable properties (excluding
arable land, hop-fields, vineyards, orchards
and permanent grasslands) can by multiplied
by the local coefficient (2, 3, 4 or 5) assessed
by a generally binding ordinance. This resolution
depends on the municipality.
	 Building Tax
The objects of building tax are buildings used
as dwellings, for business purposes, and other
buildings and so-called engineering structures
(chimneys and towers) if they are situated within
the territory of the Czech Republic. The buildings
must be connected to the land with fixed foundations.
Apartment block buildings (buildings with
flats and non-residential premises individually
registered in the cadastre), in respect of which
the tax is payable on the individual apartments/
flats and associated non-residential premises
(tax of flats or tax on non-residential premises –
see below), are not liable to the building tax.
Generally, the taxpayer for the building tax
is the owner. If the structure is managed by the
Land Fund of the Czech Republic or the Administration
of State Material Reserves or transferred
to the Ministry of Finance, and it is leased, the
tenant pays the building tax. However, this rule
does not apply to residential buildings.
As stated for the land tax, there are many reasons
and conditions for taxexemptions of buildings,
pretty much the same as for the land tax.
Thus, there is no need to file the tax return for
buildings owned by the State, municipalities, regional
governments and diplomatic representatives,
nor for buildings used for public passenger
transport nor in water management. Most of
the exemptions are permanent (buildings owned
by churches, schools and universities, museums,
galleries and hospitals), only some of them are
temporary:
1)	 Cultural monuments for eight years after
the year following their reconstruction;
2)	 Buildings affected by a natural disaster for a
period up to five years following measures
to eliminate the consequences of future
natural disasters (at the discretion of a mu-
nicipality);
3)	 Buildings and structures in special industrial
zones designated as such by the Government
of the Czech Republic are exempt for
up to five years (at the discretion of the mu-
nicipality).
The tax base of the building tax is the same
for all buildings. It is defined as the built-up area
in square metres as at 1 January of the taxable
period.
The application of tax rate is rather complicated,
as there is always a standard tax rate and additional
coefficients.
The standard tax rate for residential buildings
is 2 CZK per square metre of built-on area. This
rate may be increased by 0.75 CZK per each additional
floor above ground level. The standard or
increased rate is multiplied by the location rent
(see Table 1). The same formula including the
same standard tax rate is used for other structures
that provide facilities for residential buildings,
but only for the area in excess of 16 m2.
The standard tax rate for houses and family
houses used for family recreation (summer cottages)
is 6 CZK per m2
of the built-on area. This
rate may be increased by a tax rate of 0.75 CZK
for each additional floor above ground level. The
multiplying so called municipal coefficient of 1.5
may be used, if assessed by a generally binding
ordinance. If such houses are located in nation-
Major Problematic Issues in the Property Taxation in the Czech Republic
Analyses and Studies CASP	 17	 No 2 (8)  |  November 2019
al parks or first-category protected countryside
zones, a further multiplying coefficient of 2.0 is
applied. The same formula is being used for other
structures that provide facilities for houses and
family houses used for family recreation, with
the exception of the standard tax rate; this rate is
2 CZK per m2 of the built-up area.
The standard tax rate for garages constructed
separately from residential buildings is 8 CZK per
m2 of the surface area covered. This rate may be
increased by a tax rate of 0.75 CZK for each additional
floor above ground level and then multiplied
by a municipal coefficient of 1.5, if assessed
by a generally binding ordinance.
The standard tax rate for structures used for
business activities depends on the type of business
activity: 2 CZK per m2 of the built-on land
area for structures primarily used for agricultural
production, forestry and water management,
or 10 CZK per m2 of the built-on land area for
structures used for industrial production, civil
engineering, transport, power, other agricultural
production, and for other business activities.
The standard tax rate may be increased by an additional
tax rate of 0.75 CZK per each additional
floor above ground level, and by the municipal
coefficient of 1.5, if assessed by a generally binding
ordinance.
The standard tax rate for other structures is
6 CZK per m2 of the built-on area. It can be increased
by 0.75 CZK per each additional floor
above-ground.
For all the structures as defined above, the final
tax can by multiplied by the local coefficient at 2,
3, 4 or 5, if assessed by a generally binding ordinance.
This resolution is made entirely at the discretion
of the municipality.
Table 2: Building tax rate overview
Object of building tax
Standard
tax rate
(CZK/
m2)
Increasedtaxrate
(additionalfloor
above-ground)
Multiplied coefficients
Localcoefficient
Locationrent
Municipal
Nationalpark
Residential buildings 2
+ 0.75
CZK/m2*
1.0 – 5.0 – – 2,3,4 or 5
Other structures that provide facilities for
residential buildings (over 16 m2)
2
+ 0.75
CZK/m2*
1.0 – 5.0 – – 2,3,4 or 5
Houses and family houses used for family
recreation
6
+ 0.75
CZK/m2*
– none / 1.5 2.0 2,3,4 or 5
Other structures that provide facilities for
houses and family houses used for family
recreation
2
+ 0.75
CZK/m2*
– none / 1.5 2.0 2,3,4 or 5
Garages 8
+ 0.75
CZK/m2*
– none / 1.5 – 2,3,4 or 5
Structures for business activity – primarily
used for agricultural production, forestry
and water management
2
+ 0.75
CZK/m2**
– none / 1.5 – 2,3,4 or 5
Structures for business activity – industrial
production, civil engineering, transport,
power and other agricultural production,
and other business activity
10
+ 0.75
CZK/m2**
– none / 1.5 – 2,3,4 or 5
Other structures 6
+ 0.75
CZK/m2*
– – – 2,3,4 or 5
*  If the area of an additional floor above-ground exceeds two-thirds of the built-up area.
** Always.
Major Problematic Issues in the Property Taxation in the Czech Republic
Analyses and Studies CASP	 18	 No 2 (8)  |  November 2019
	 Tax on Flats
Only flats registered in the cadastre are liable to
(are the object of) the tax on flats, while the other
flats not individually registered in the cadastre
are parts of the houses and taxed within the
building tax as a residential building.
The taxpayer for the tax on flats is the owner.
Only if the structure is managed by the Land
Fund of the Czech Republic or the Administration
of State Material Reserves or transferred to
the Ministry of Finance, and it is leased, the tenant
pays the building tax.
The list of tax exemptions copies the exemption
for the building tax mentioned above.
The tax base of the tax on flats is the adjusted
floor area, which refers to the total floor area
of the flat in square metres as at 1 January of the
taxable period, multiplied by a coefficient of 1.20
(or 1.22, if there is any land used together with
the unit).
The standard tax rate for flats is 2 CZK per m2
of the adjusted floor area which is then multiplied
by the location rent (see Table 1). The final
tax rate can by multiplied by the local coefficient
of 2, 3, 4 or 5 assessed by a generally binding ordinance
(at the discretion of the municipality).
	 Tax on Non-Residential Premises
The object of the tax on non-residential premises
are non-residential premises registered in
the cadastre. The other non-residential premises
not individually registered in the cadastre are
parts of the houses and taxed within the building
tax as residential building or structures used
for business activities depending on the predominant
area.
The taxpayer for the tax on non-residential
premises is generally the owner and similarly
to the tax on flats, only if the structure is managed
by the Land Fund of the Czech Republic or
the Administration of State Material Reserves or
transferred to the Ministry of Finance, and it is
leased, the tenant pays the building tax.
The list of tax exemptions copies the exemption
mentioned above for the building tax and
the tax on flats.
The tax base of the tax on non-residential
premises is the adjusted floor area, which refers
to the total floor area of the non-residential property
in square metres as at 1 January of the taxable
period, multiplied by a coefficient of 1.20 (or 1.22,
if there is any land used together with the unit).
The standard tax rate for non-residential
premises used for business purposes depends
on the purpose of the business: 2 CZK per m2
of
the adjusted floor area for non-residential premises
primarily used for agricultural production,
forestry and water management, or 10 CZK per
m2
of the adjusted floor area for non-residential
premises used for industrial production, civil engineering,
transport, power and other agricultural
production, and for other business activiTable
3: Tax rates for non-residential premises overview
Object of tax
Standard tax
rate
(CZK/m2)
Multiplied coefficients
Local
coefficient
According to
number of
inhabitants
Municipal
Non-residential premises – garages 8 – none / 1.5 2,3,4 or 5
Non-residential premises for business activity
– primarily used for agricultural production,
forestry and water management
2 – none / 1.5 2,3,4 or 5
Non-residential premises for business activity
– industrial production, civil engineering,
transport, power and other agricultural
production, and other business activity
10 – none / 1.5 2,3,4 or 5
Other non-residential premises 2 1.0 – 5.0 – 2,3,4 or 5
Major Problematic Issues in the Property Taxation in the Czech Republic
Analyses and Studies CASP	 19	 No 2 (8)  |  November 2019
ty. These standard rates may be multiplied by the
municipal coefficient of 1.5, if assessed by a generally
binding ordinance.
The standard tax rate for non-residential premises
used as a garage is 8 CZK per m2 of the adjusted
floor area. This standard rate may be multiplied
by the municipal coefficient of 1.5, if assessed
by a generally binding ordinance.
The standard tax rate for non-residential
premises used for other purposes is 2 CZK per m2
of the adjusted floor area and is multiplied by the
location rent (see Table 1).
The final tax rate can by multiplied by the local
coefficient at 2, 3, 4 or 5 assessed by a generally
binding ordinance (at the discretion of the mu-
nicipality).
	 Immovable Property Tax
Administration
Immovable property tax administration is regulated
generally by the Tax Procedure Code (Act
no. 280/2009 Sb.) and in specific issues by the
Immovable Property Tax Act. I.e. the Immovable
Property Tax Act deals not only with the structural
components of the tax (substantive legal
regulation), but also special administration issues
related specifically to the immovable property
tax (procedural law). No matter that the immovable
property tax revenue goes into the local
budgets, it is administered by the Financial
Office, which is the State’s tax office. The locally
competent tax office is the one within whose
district the immovable property is situated. The
Financial Office collects and maintains information
declared on the tax return. This information
is then used to verify or update the information
in the cadastre operated by the cadastral offices.
[Radvan, Kranecová, 2019]
The leading principle not only in the immovable
property tax administration is the principle
of self-application: the taxpayers have to calculate
the tax using the correct tax base and applying
the correct tax rate. In the tax return, the taxpayer
has to record all relevant information re-
garding
1)	 The person of the taxpayer;
2)	 The immovable property:
a)	 Type of the immovable property;
b)	 Location of the immovable property;
c)	Legal relationship of the immovable
property to the taxpayer;
d)	Area of the immovable property in
square metres;
e)	 Age of the immovable property;
f)	 Use of the immovable property;
g)	 Any possible exemptions (the tax office
has no right to grant exemptions or reliefs
within the administration process).
It might be rather complicated for the taxpayer
to get all the information about the immovable
property, especially the age of structures (buildings,
flats and non-residential premises) and surprisingly
the area of the buildings, if they are situated
on the plot larger than the building itself as
this information is not included in the real estate
cadastre. The solution is easy: as the principle of
material truth must be respected, the taxpayer
should measure the real area of the building.
The good consequence for the taxpayer is that
the tax return does not have to be filed every year.
If there are no changes in the information stated
in the tax return that might be influenced by the
taxpayer, there is no need to re-file the tax return.
I.e. even if the tax rate, the average price of land,
the coefficients or even the whole Immovable
Property Act are changed or amended, there is
no duty to file the new tax return, because these
changes cannot be affected by the taxpayer.
If the taxpayer has a duty to file the tax return,
it should be filed by 31 January of the taxable
period. The taxable period is the calendar year.
There is a relevant date defined in the Immovable
Property Act: the immovable property tax is
assessed according to the situation as at 1st January
of the calendar year in which it is assessed.
For the tax assessment, it is irrespective if there
is a duty to file a tax return or not in particular
calendar year.
The tax administrator has a choice of three tax
assessmentprocedures:[Radvan,Kranecová,2019]
Major Problematic Issues in the Property Taxation in the Czech Republic
Analyses and Studies CASP	 20	 No 2 (8)  |  November 2019
1)	 Implied tax assessment – the assessed tax is
the same as the tax stated in the tax return
(or based on the same information stated in
the last tax return, if there is no obligation
to file the tax return in the particular year).
In this situation the tax administrator is not
obliged to inform the taxpayer about the result
of assessment. The last day of the time
limit for filling the tax return is considered
as the date of the tax assessment and as the
date of the delivery of the tax decision;
2)	Reproach proceedings – if there are some
concerns about the correctness, accuracy,
supporting evidence or completeness of the
taxreturn,thetaxadministratorinformsthe
taxpayer about these concerns and requests
additional information to be received within
(usually) fifteen days. At the end of these
proceedings the tax administrator sets the
tax base, prescribes the amount of tax and
notifies the taxpayer of the tax assessment.
The tax is payable within thirty days of delivery
of the tax assessment;
3)	 Assessment using ‘other tools’ – if the tax
return was not filed in time or within the
extended time limit, the tax administrator
may determine the tax base and assess
the tax according to whatever information
is available with no requirement to further
contact the taxpayer. The tax administrator
notifies the taxpayer of the tax assessment,
and the tax is payable within thirty days of
delivery of the tax assessment. Under such
circumstances the taxpayer cannot appeal
both against the tax base and the amount
of tax payable.
As all taxpayers should know the exact amount
of their immovable property tax in the taxable
period, there should be some mean of delivering
this information. The amount as delivered by a
public notice as a collective list relating to tax liability.
The notice is available at the tax office and
informs about the possibilities to get concrete information
about the tax duty. Just a limited number
of taxpayers is aware of this way of delivery
and majority gets the information only by post
receiving the postal order stating the amount of
tax payable to every taxpayer. The postal order
is delivered much later then the deadline for appeals
expires, what mean very limited number of
appeals concerning the immovable property tax.
Generally the immovable property tax is payable
in one instalment by 31st May of the current
taxable period if the annual immovable property
tax does not exceed 5,000 CZK. If the tax exceeds
5,000 CZK, it is payable in two equal instalments
– by 31st May and 30th November. For taxpayers
engaged in farming and fish-farming the first instalment
is postponed to 31st August. Of course,
the immovable property tax can by paid not only
by the postal order; all other ways of tax payments
(bank transfers, cash payments, checks,
etc.) are available.
If the taxpayer falls into arrears, interest is paid
(at the basic rate of the Central Bank + 14 percent)
on the amount outstanding on the debt for each
day up to a period of five years. If the tax is additionally
re-assessed by the tax administrator (or
by the taxpayer in the tax return), the penalty is
20 percent of the additionally assessed tax. The
amount of the interest or penalties is communicated
to the tax debtor by means of an assessment
order and must be paid within fifteen days
after the delivery of the assessment order. [Radvan,
Kranecová, 2019]
	 Problems of the Existing
Property Tax Regulation
There are no discussions about the potential
abolishment of the immovable property tax; on
the other hand, de lege lata regulation is not ideal
and there are several structural components
to be amended. There are some minor issues as
the extreme number of exemptions and the list
of property currently excluded from taxation. In
my opinion, it would be useful to define that all
the immovable property is liable to tax and some
property is exempted, i.e. there would not be any
group of property non-liable to taxation. All the
Major Problematic Issues in the Property Taxation in the Czech Republic
Analyses and Studies CASP	 21	 No 2 (8)  |  November 2019
exempted property would be included in the tax
return stating the reason for the exemption by
the taxpayer. We should also narrow the list of
exempted property.
	 Immovable Property Tax Revenue
As stated above, the main function of the immovable
property tax is to ensure income for municipal
budgets. However, the immovable property
tax revenue in the Czech Republic is not very
significant and, in comparison with other OECD
states, it is actually one of the lowest.
One of the possible ways to increase the immovable
property tax revenue might be the implementation
of ad valorem system for assessing
the immovable property tax base, as recommended
by many international institutions and
experts. Nowadays, the immovable property tax
base is still determined by means of the unit system
(even though there are some minor modifications
such as the quality grade of agricultural
land and the possibility of expert assessments of
commercial forests and ponds). Two draft bills of
a new act on immovable property tax were prepared
in 2001 and 2003 with the intention of introducing
the ad valorem system into the taxation
of immovable property. However, the Czech
Parliament decided not to adopt them. The third
one, most detailed and publically discussed was
not even subject of discussion within the members
of the Parliament. Still it included many aspects,
which should be taken into account while
preparing any new amendments of the existing
act or drafting a new one. This third bill [Radvan,
2012, p.  229–245] applied the ad valorem
system of taxation only to land in areas, which
are or can be built up. It did not deal with the assessment
of agricultural land as there was no expected
change and the taxation was supposed to
continue using the quality grade of soil. Also all
buildings and other structures were supposed to
be taxed in the old way, based on the unit system.
The value of land should have been determined
on the basis of value maps. These maps
should have been compiled by municipalities for
their own territories as it is expected that municipalities
have the best knowledge of the local
situation, they know the prices of land and they
are able to carry out physical checks. Maps of tax
bases (value maps) should include two parts: pictorial
and textual. The pictorial part should be
based on copies of cadastral maps what should
also achieve a correspondence between the legal
Table 4: Immovable property tax revenue performance in the Czech Republic
Year 2014 2015 2016
All revenues at national level (in billion CZK) 1.133,825 1.1234,517 1.281,618
Tax revenues at national level (in billion CZK) 952,518 1.002,131 1.071,488
All revenues at regional and local level (in billion CZK) 263,980 440,300 447,200
All tax revenues at regional and local level (in billion CZK) 219,390 226,300 249,500
Immovable property tax revenue (in billion CZK) 9,970 10,334 10,586
Immovable property tax revenue as % of all state revenues 0.879 0.91 0.83
Immovable property tax revenue as % of all regional and local revenues 3.78 2.35 2.37
Immovable property tax revenue as % of tax revenues at regional and
local level
4.54 4.56 4.24
Source: Czech Statistical Office (www.czso.cz), 14.3.2019.
Table 5: Revenue importance of immovable property tax revenue
Percentage of GDP Percentage of Total Revenue
Percentage of Local
Revenue
All Property Taxes
Immovable
Property Tax
All Property Taxes
Immovable
Property Tax
Immovable
Property Tax
0,46% 0,21% 2,97% 1,37% 5,21%
Source: Czech Statistical Office (www.czso.cz), 14.3.2019.
Major Problematic Issues in the Property Taxation in the Czech Republic
Analyses and Studies CASP	 22	 No 2 (8)  |  November 2019
and factual situations in cadastral maps more effectively.
At the pictorial part of value maps, the
territory of municipality should be divided into
various zones of land and their types. The criteria
for zoning are completely up to the municipality:
they can use anything, but the best option
seems to be the real use of the land (e.g. industrial
areas, building plots, commercial zones, etc.)
combined with the location (centres, satellites).
For example, in the Ministry’s examples, the socalled
media as the utilities and the available infrastructure
were used.
The zones should be colour-coded and should
correspondtotheactualsituation.Thebordersbetween
zones should be identical with the borders
betweenplotsofland.Inmyopinion,thismightbe
problematic for practice for several reasons. First,
there was no period for the re-zoning: the actual
situation might change relatively quickly, while
the value map remains unchanged. Second, there
are plots of land used for several different purposes:
for example, the building plot covers just a
small part of the whole plot, or the infrastructure
is available only on a small part of the plot.
The pictorial map should also delimit land exempt
from taxation. The tax exemptions should
be fully within the powers of the municipalities
(e.g. sports fields, cemeteries, school premises,
etc.). I find this solution useful: the municipalities
as the beneficiaries should have the right to
influence their immovable property tax revenue
and behaviour of locals to regulate or stimulate
certain activities, as they have the best knowledge
of the local situation. Nowadays, municipalities
have only limited rights to influence the
immovable property tax exemptions adopting a
generally binding ordinance (local by-law) in accordance
with the right given in the Immovable
Figure 1: Pictorial part of tax base maps – The municipality of Rozdělov
Source: Holmes, 2010.
Major Problematic Issues in the Property Taxation in the Czech Republic
Analyses and Studies CASP	 23	 No 2 (8)  |  November 2019
Property Tax Act. When dealing with the consequences
of natural disasters, municipalities may
fully or partly (as a percentage) exempt immovable
property located within their jurisdiction
from the immovable property tax. This exemption
is time-limited, and subject to a maximum
period of five years. The exemption is effective
not only for the year in which the natural disaster
occurred and the following five years, but can
also include the previous taxable period. This
exemption is not very popular given the potential
loss of revenue to the municipality and their
need to meet the costs of repairing any damage.
In addition, it can be difficult to determine which
immovable property was affected by the natural
disaster (for example, flats on the first floor were
damaged, however, flats on the fourth floor undamaged).
Various types of agricultural land such
as arable land, hop-gardens, vineyards, orchards
and land under permanent grass can be exempted
from the immovable property tax by municipalities
as a subsidy for their agricultural industry.
This exemption need not be applied to land in
developed or built-up areas of the municipality.
This exemption is infrequently used due to small
rural municipalities, which rely primarily on agricultural
land for their revenue and thus would
be losing a substantial part of their tax base and
associated revenue. As an investment incentive,
municipalities may exempt immovable property
in special industrial zones, designated as such by
the Government of the Czech Republic, for a period
of up to five years. [Radvan, 2016, p. 74]
The textual part of value maps should contain
the lists of individual zones with the lists of parcel
numbers of plots of land, specifying the type,
use and area of land. The most important is the
tax base per square metre of land in each individual
zone. The tax base on land should be assessed
by multiplying the unit-based tax base (the value
Figure 2: Pictorial part of tax base maps
Source: Holmes, 2010.
Major Problematic Issues in the Property Taxation in the Czech Republic
Analyses and Studies CASP	 24	 No 2 (8)  |  November 2019
of land per square metre as set in the value maps)
and the actual area of a specific plot of land.
As mentioned above, the value should be set
by municipalities in relation to local conditions.
It is a good idea, however, also the weak point of
the reform, because the value maps should be approved
by municipal councils and issued in the
form of municipal by-laws (generally binding ordinances).
Under the Czech currently valid legal
regulation, there is no remedial instrument
for those who think that the municipal generally
binding ordinance is unfair. The taxpayer may
appeal only against the actual assessment of the
immovable property tax but not against the value
of land determined by the municipalities. It
would be useful to create a new instrument and
determine in what ways taxpayers may object to
the inadequacy of the tax base before the amount
of tax is assessed. The inspiration might be found
in Lithuania, where a public discussion on price
maps of land has to be held prior to the approval
of such maps [Aleksiene, 2009], or in Great Britain,
where the principle of appeal is structured
into two stages. The first stage is essentially informal:
it is a particular form of an administrative
review, under which the objection to the value
is discussed between the complainant and the
body responsible for the assessment. Only when
such a discussion does not result in a satisfactory
solution it is possible to file an appeal to an independent
tribunal. [Malme, 2009]
The textual part should include the descriptions
of any deviations, limitations, exemptions
and differences between actual and legal states.
I cannot agree with the last point: there should
not be any differences between actual and legal
states and if there are any, the taxpayer primarily
and the state secondarily should change the
Figure 3: Pictorial part of tax base maps
Source: Holmes, 2010.
Major Problematic Issues in the Property Taxation in the Czech Republic
Analyses and Studies CASP	 25	 No 2 (8)  |  November 2019
legal status. In every case, the immovable property
tax should be always assessed according to
the actual status.
Generally, there are much more negatives of
the proposed reform. The Czech Republic needs
a complex reform of property taxation, not just
a partial step for some types of land only (taxes
on buildings and other structures and agricultural
land are to be taxes in the existing ways). The
new system would be definitely more costly for
municipalities as they have to prepare the value
maps. Additional expenses must be compensated
by increased incomes. However, there are some
specific, mostly historic aspects that block a rise
of the immovable property tax. E.g., the number
of property-rich but income-poor citizens is relatively
high because of inheritance or restitutions.
For many years, there was a regulation of rent.
Talking about taxes, the fiscal function usually
prevails. In this context, it is quite surprising
that the reform was planned as fiscally neutral.
Even if the reform assumed additional expenses
for both municipalities and tax offices, no higher
revenue was expected. This is a political issue,
not legal nor economic. If the politicians are not
brave enough to increase the immovable property
tax (and possibly decrease other taxes) and
explain its benefits for the taxpayers, there is no
need to deal with any immovable property taxation,
not only in the Czech Republic.
	 Inadequate Possibilities of
Municipalities to Influence the
Immovable Property Tax
As the municipalities are the exclusive beneficiaries
of the immovable property tax revenue,
they should have adequate powers to influence
the revenue. However, the powers of municipalities
are in this aspect very limited and inadequate.
As stated above, municipalities have the
right to adopt a generally binding ordinance (local
by-law) to exempt immovable property affected
by natural disasters, certain agricultural land
(arable land, hop-fields, vineyards, orchards and
permanent grass pastures), and immovable property
in special industrial zones. In the same way,
they can effect a change to those coefficients that
influence the tax rate (i.e. the location rent, the
municipal coefficient) or the tax itself (i.e. the local
coefficient).
The coefficient called location rent is influenced
by the number of inhabitants with a permanent
residence in the municipality. It is a multiplier
applied to the standard tax rate for some
types of immovable property (development land,
residential buildings, and other structures that
provide facilities for residential buildings, flats
and non-residential premises not used for running
businesses and garages). The basic value of
the coefficient is laid down in the Act: there are
seven levels of value within the range of 1.0 and
4.5. Municipalities have right to increase the basic
coefficient (up by one level) or reduce it (down
by three levels). Many Czech municipalities use
the location rent.
The municipal coefficient can be applied to
other buildings and units where the location
rent does not apply (dwelling houses and family
houses used for family recreation (summer cottages)
and other structures that provide facilities
for such property, such as garages, as well as
structures used for business activities, non-residential
premises used for business activities and
as garages). The value of the coefficient is set at
1.5 and it is applied as a multiplier to the standard
tax rate. This coefficient is very popular in many
municipalities.
From the fiscal point of view, the most important
is the opportunity to increase the immovable
property tax by the local coefficient. This coefficient
increases the immovable property tax
for specific immovable property (with the exception
of agricultural land) by a factor of either 2, 3,
4, or 5. The local coefficient has a political nature
and only 7 percent of municipalities in the Czech
Republic are using it.
	 Tax Administrator
The immovable property tax revenue goes into
the local budgets, depending on the location of
Major Problematic Issues in the Property Taxation in the Czech Republic
Analyses and Studies CASP	 26	 No 2 (8)  |  November 2019
the immovable property. However, the immovable
property tax is administered by the Financial
Office, which is the State’s tax office. The locally
competent tax office is the one within whose district
the immovable property is situated. Many
municipalities are willing to become the immovable
property tax administrators: they believe
they know local situation better than the tax office
(and usually they are right) and they want to
know who has the tax debts. Mayors argue that
if they know the debtors, they might use several
instruments to recover the debt (e.g. not issuing
building permission etc.).
Even if the arguments above are rational, the
Czech legal regulation is more complicated: the
local taxes and charges are always administered
within the transferred jurisdiction, i.e. by the municipal
office (and not by the municipality itself).
It means that both the mayor and the city council
are not participating in the tax administration at
all. Moreover, because of the principle of secrecy,
they cannot get any information about the taxpayers
and their taxes, about the tax debtors, etc.
The other obstacle to change the state tax office
for the municipal office to administer the immovable
property tax is the lack of competence
of municipal employees. It must be remembered
that there are more than 6,200 municipalities
in the Czech Republic and many of them are extremely
small with a very low number of inhabitants.
It is really very difficult and many times
even impossible to find any person capable for
the tax administration in these small villages.
	 Method of Tax Law Regulation
The quality of (not only) tax law is conditio sine
qua non for fair tax administration. It must be
taken into account that the tax law has really very
specific method of regulation.
Tax law is related to financial law and administrative
law by the method of legal regulation
used. Based on its characterization according to
the criteria for being considered an independent
branch of law, administrative law is distinguished
by the application of a type of public law method,
which is the administrative law regulation method.
This method is based on the effect of public
authorities on the recipients of public authority,
in particular by means of the norms enforceable
by public authorities and contained in normative
administrative acts, i.e. by laws and ordinances
issued by public authorities authorized in
and for the implementation of the law and within
the limits stipulated by law (sub-statutory regulations),
as well as by means of individual administrative
acts – decisions of the public authorities
authorized by law to make such decisions in
the specific administrative matter. The method
applied in financial law is essentially a modified
version of the administrative law method, namely
with regard to the actions of public administration
authorities and in relationships regulated
by financial law. Statistics can demonstrate that
there is a lower level of applying sub-statutory
regulations in financial law regulation than in
administrative law; in other words the law gives
public administration authorities less space to
carry it out. Public administration authorities apply
economic instruments to a greater extent in
this area to affect recipients (central bank interest
rates, mandatory deposit in a state of emergency,
etc.). Certain private law elements also
modify the administrative law method, such as
agreeing on the conditions for use of grant funds,
applying the principle of competition in using
public funds in public procurement, etc. Certain
administrative activities are also delegated to private
law entities. [Radvan, 2014]
A similar situation prevails in tax law. Very few
sub-statutory regulations exist in this area; the
vast majority of legal regulations in the area of
tax law take the form of an Act, primarily with regard
to such a requirement stipulated in the Constitution
(sensu stricto) or a similar document
(e.g. in the Czech Republic such rule is contained
in the Charter of Fundamental Rights and Basic
Freedoms, which forms part of the constitutional
system (Constitution sensu largo) along with the
Constitution sensu stricto. Of the types of substatutory
regulations, the most significant in the
Major Problematic Issues in the Property Taxation in the Czech Republic
Analyses and Studies CASP	 27	 No 2 (8)  |  November 2019
Czech Republic are the generally binding ordinances,
which municipalities use to “complete”
the legal regulation of property taxation and local
taxes (fees). This area also contains many economic
instruments public administration authorities
can use to affect recipients. These instruments
generally include, for example, tax
credits and other corrective elements, tax holidays,
etc. Specific to this area is the very frequent
use of private law elements to modify the traditional
administrative law method of regulation.
As an example, take the options of negotiating
taxes, postponing taxes, payment calendars, etc.
We can even find typical private law relationships
intaxlaw,suchastherelationshipofanemployer
who pays wages (salary) to an employee: their relationship
is without doubt a labour law relationship,
although the employer is obliged to deduct
a personal income tax advance payment as well
as insurance premiums and other levies stipulated
by law from the employee’s wages and the employee
is obliged to permit such conduct. The authority
to withhold tax is thus delegated from the
state to a private law entity. Many analogous relationships
can be found in tax law (a bank withholds
tax on interest accrued, a joint stock company
withholds tax on dividends, a seller collects
VAT from a buyer along with the sale price, etc.).
[Radvan, 2014]
What is the most specific to tax law, however,
is a principle known as self-application. In tax
proceedings (unlike in administrative or financial
law) the administrative negotiations do not take
place between the administrative authority (tax
administrator) and (tax) entity, but rather primarily
assume the knowledge and orientation of
the tax entity in the area of tax law. The taxpayer
applies tax law norms to itself by determining
the tax base using its own knowledge, uses the
relevant tax rate for itself, and applies the corrective
elements for itself. The taxpayer then delivers
the completed tax return to the tax administrator,
which assesses the tax tacitly, i.e. implicitly,
provided that it has no reservations regarding
the correctness and completeness of such return.
In most cases, therefore, there is no interaction at
all between the tax administrator and taxpayer.
[Radvan, 2014]
Especially the specifics of self-application (or
even self-assessment in case of gambling taxation)
are the reasons for the demand of high quality
tax law norms. These norms must be clear, understandable,
unambiguous, comprehensible and
obviousforthenon-professionaltaxpayersasthey
are those who should interpret them and apply
themto paytaxes ontime and inthe right amount.
	 Constitutional principles
To ensure the tax law norms are having the characteristics
defined above, there are several principles
of tax law. There is no taxpayer’s bill of
rights in the Czech Republic and principles are
included in the constitutional and legal norms.
The most important principles are included directly
in the Constitution sensu largo. One of the
fundamental provisions of the Constitution (Art.
2(3) of the Constitution of the Czech Republic)
states that “State authority is to serve all citizens
and may be asserted only in cases, within the
bounds, and in the manner provided for by law.”
Similarly the Charter of Fundamental Rights and
Basic Freedoms (Art. 2(2) of the Charter of Fundamental
Rights and Basic Freedoms) states that
“State authority may be asserted only in cases
and within the bounds provided for by law and
only in the manner prescribed by law.” With regard
to the principle of legitimacy, the other
principles are very often mentioned, namely the
principles of transparency, accessibility and unambiguousness
when handling the sources of
law, the general prohibition of retroactivity, the
requirement of unambiguousness and predictability,
legal certainty, the protection of legitimate
expectations, the prohibition of excessive
formalism, the protection of confidence in law,
and the protection of the acquired rights, and the
principle of proportionality. [Brychta, 2020] Art.
11(5) of the Charter of Fundamental Rights and
Basic Freedoms includes the principle of legality
(nullum tributum sine lege principle): “Taxes
and fees shall be levied only on the basis of law.”
Major Problematic Issues in the Property Taxation in the Czech Republic
Analyses and Studies CASP	 28	 No 2 (8)  |  November 2019
The principles applicable for the tax law are included
in the international law. According to the
Art. 10 of the Constitution of the Czech Republic,
ratified and promulgated international treaties
are provided with the application priority. This
applies e.g. for the European Convention on Human
Rights including property protection, fair
trial, no punishment without law, respect for private
and family life, home and correspondence,
freedom of movement, ne bis in idem principle,
etc. The Czech Republic as the EU Member State
is bound by the EU law.
The constitutional and international tax law
principles are of course applied in the general tax
lawprinciplesandinthetaxlawdesignanddrafting
and in the tax procedure. However, these lists
are much broader.
	 General Tax Law Principles
Besides nullum tributum sine lege principle, the
most important is the principle of generality
stating that the duty to pay taxes is general and
every person has the duty to pay the tax if defined
by the act. This principle is to secure the
principles of equity (non-discrimination) and
justice. The tax should be adequate to the ability
of the taxpayer to pay the tax. This rule is expressed
by the principle of the prohibition of
confiscation and the principle of pragmatism.
The tax law norms must not be retroactive as it
is obvious from the principle of non-retroactivity.
There are several principles protecting the
taxpayer in the application process: the principle
of courts’ protection and the principle of
limited analogy.
	 Tax Law Design and Drafting
Principles
Many of the above mentioned principles must
be taken into account while the tax law is designed
and drafted, i.e. principles nullum tributum
sine lege, generality, equity, justice, prohibition
of confiscation, pragmatism, non-retroactivity,
etc. The legislator should moreover think
about the social consensus of taxation and economicconsequences,
the protectionofsources
(and / or motivation to produce more sources) to
be taxed; it is necessary to presume short-term
and long-term consequences of taxation and
tax law norms. In many cases, the tax rates are
fixed, which does not correspond with the inflation
factors. If the legislator increases fixed tax
rate in certain periods, it breaks the principle of
fluency of changes. Taxpayers’ reactions might
be then tax avoidance, especially concerning taxes
on alcohol and tobacco. There are as well external
aspects for the new tax regulation: European
and international law dealing with taxes.
As the main function of taxes is the fiscal function,
the most important for the State is the protection
of financial interests of the State.
	 Tax Procedure Principles
Tax Procedure Principles are defined in the Tax
Procedural Code. The primal procedural principle
in tax law is the principle of self-application
generallydiscussedabove.Accordingtothisprinciple,
the taxpayer must know if and when to file
the tax return, calculate the tax and pay it generally
without any cooperation with the tax administrator.
The principle of legality states that
the tax administrator shall proceed in conformity
with laws and other generally binding statutory
provisions incl. international treaties. The principle
of legitimacy specifies the same constitutional
principle as discussed above; the same applies
for the principle of procedural equity – all
tax subjects have equal rights and duties in the
tax proceedings. The principles of collaboration,
cooperation and proportionality are connected:
all tax subjects have the right and the duty to
cooperate with the tax administrator and the tax
administrator shall proceed in close collaboration
with the tax subjects; the tax administrator
shall select only means which cause the least inconvenience
to the taxpayers. The tax administrator
should provide adequate instructions to
the taxpayers and be polite as they are the clients
(client approach principle). The tax procedure
Major Problematic Issues in the Property Taxation in the Czech Republic
Analyses and Studies CASP	 29	 No 2 (8)  |  November 2019
itself should be effective, quick and economic,
with respect to costs of the taxpayer; all the information
available for the tax administrator must
be used without asking the taxpayer for it. Concerning
the evidence, several principles are to be
followed: principle of discretionary evaluation
of evidence, principle of material truth, principle
of limited scope of collecting information.
The principle of formality is applied, too. The
tax proceedings are never made public (principle
of non-publicity) and everybody except tax subjects
are to maintain confidentiality in respect of
everything learned during tax proceedings (principle
of discretion / confidentiality). The official
language is Czech. In similar cases there should
be no unreasonable differences in the decision
(principle of foresee ability / principle of legitimate
expectations). The tax duty is non-transferable.
There are many other principles in the
tax procedure typical for fair trials like right to be
heard, right of defence, equality of arms, right to
a fair trial and prohibition of double jeopardy as
the right not to be tried twice for the same cause
(ne bis vexari). There are several more principles
to be applied in the tax procedure mentioned in
the Administrative Procedure Code.
	Conclusions
The immovable property tax is a benefit tax and
a good tax [Youngman, 2016]. The hypothesis
was confirmed. It is roughly proportional to the
cost of the public service benefits received by
the taxpayer and it can be seen as a compensation
for the broad set of benefits provided by a
local government [Walters, 2017, p. 41–47]. However,
local taxpayers usually do not know about
these benefits and a promotion is needed. A right
media seem to be a local TV and radio, the internet
and social posters, billboards and other urban
accessories, city transport facilities, PR articles,
product placement in movies and TV series,
promotional items, etc. The strongest marketing
platform in today’s digital age seems to be
social media, so it could be useful to promote
the property tax also through the municipalities
own Instagram profile or a Facebook page.
Good thing about promotions through social
media is also the fact that it is really inexpensive
compared to for example billboards. Also,
almost every municipality publishes its own local
magazine, where they can promote the property
tax. It is really easy to clearly summarize the
expenses of the municipality for public lighting,
building and maintenance of roads, the city police,
the fire brigade, the functioning of kindergartens
and schools, the construction and maintenance
of playgrounds, subsidies to local traffic,
waste management, etc. Such activities of the
municipality not only make the living more comfortable,
but also increase the value of the taxed
property. It is more than certain that municipalities
are spending more money on these activities
than they receive by the property tax revenue;
the difference can serve as an argument for introducing
one of the factors increasing the property
tax, especially the local coefficient. [Radvan,
2017, p. 347–348; Radvan, 2019, p. 16]
Thespecificsofself-applicationarethereasons
for the demand of high quality tax law norms.
These norms must be clear, simple, understandable,
unambiguous, comprehensible and obvious
for the non-professional taxpayers as they are
those who should interpret them and apply them
to pay taxes on time and in the right amount. All
immovable property tax reforms should contribute
to simplification and clarification of legal regulation
of immovable property taxation. Because
of restitutions issues and number of propertyrich
but income-poor people, it is necessary to
consider introducing certain parameters and limits
for the maximum extent of taxation.
The most problematic issue regarding immovable
property taxation in the Czech Republic is
the low tax revenue. The decision to increase the
revenue is a political one. Unfortunately, Czech
politicians are not brave enough to take this decision.
Without increasing the tax revenue, there
is no need to change the existing system of taxation,
as all the other methods are more expensive
for the tax administration.
Major Problematic Issues in the Property Taxation in the Czech Republic
Analyses and Studies CASP	 30	 No 2 (8)  |  November 2019
The above-mentioned proposal of the immovable
property taxation reform changing prevailing
unit system for the ad valorem system was
not the right one. For example, taxation of buildings
and other structures and agricultural land
was not attached by the reform proposal. The
new system would be definitely more costly for
municipalities. The issue of appeals against the
value of land determined by the municipalities
was not solved at all. In addition, the period for
the re-zoning was not defined. There are several
more minor reasons for not adopting the reform,
e.g. the competence of persons participating
in the formation of the value maps, particularly
in small municipalities, is not adequate.
These problems are solvable: value maps could
be compiled by designated municipalities or the
law could specify the minimum values.
On the other hand, the ad valorem system of
immovable property taxation would also bring
some benefits. The value maps are the cheapest
and the most effective way of assessing the tax
base. If there was a reasonable period of re-zoning,
the immovable property tax would be more
fair and current data would be available also other
taxes (tax on acquisition of immovable property,
income taxes) and for the purposes of inheritance
proceedings, expropriation, etc.
In my opinion, the immediate solution for the
Czech Republic is that the unit system (area) tax
base should be retained. There should be one
maximum tax rate in the legislation for every
type of property, and municipalities should have
the right to introduce their own specific tax rates
below that level. As there are more than 6,250
municipalities in the Czech Republic and many
of them are extremely small with a very low
number of inhabitants, there should be another
rate (standard rate) in the legislation for those
municipalities that do not set their own specific
tax rates.
References
Aleksiene, A. (2009). Public Knowing and Support,
presented at Market Value-Based Taxation on Real
Property − Lessons from International Experience,
Ljubljana, 21.–24.4.2009.
Brychta, K. (2020) in Radvan, M., Boháč, R., Brychta, K.
Czech Republic national report for the EATLP congress
2019 (in print).
Engliš, K. (1929). Finanční věda (Financial Science),
Prague: Nakladatelství Fr. Borový.
Freudenfeld, F., Kovanda, F. (1937). Zákon o přímých
daních (Income Taxes Act), 2nd ed., Prague:
Právnické knihkupectví a nakladatelství V. Linhart.
Holmes, A. (2010). Daň z nemovitostí – hledáme
přijatelná řešení (Real Estate Tax – We are looking
for Acceptable Solutions), presented at seminar Budoucnost
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Radvan, M. (2019). Municipal Charges on Communal
Waste: Do They Compete with the Immovable Property
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Taxation a Solution for the Czech Republic?
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Major Problematic Issues in the Property Taxation in the Czech Republic
. PUBLISHER .
Centre for Analyses and Studies of Taxation SGH  .  Al. Niepodległości 162  .  Warsaw 02-554  . Poland
Dominik J. Gajewski (General Editor)  .  Grzegorz Gołębiowski  .  Tomasz Grzybowski (Managing Editor)
. CONTACT .
analysesandstudies@sgh.waw.pl  . analysesandstudies.sgh.waw.pl  . casp.sgh.waw.pl
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