Selling Property Acquired as a Gift in the Czech Republic: Tax Guide 2026

Taxation of Receiving a Gift in the Czech Republic

Before looking at the sale, it is useful to briefly recap the rules for taxation when acquiring property as a gift under Czech law. Receiving a gift is completely exempt from Czech income tax if at least one of the following conditions is met:

• Gift from a relative: This applies to a gift from a relative in the direct line (children, parents, grandparents, grandchildren) or collateral line (siblings, uncles, aunts, nephews, nieces). In the Czech Republic, the exemption also applies to gifts from a spouse, a spouse's child, a child's spouse, a spouse's parents, or a parent's spouse.
• Shared household: This applies to a gift from a person with whom the donee lived in a jointly managed household in the Czech Republic for at least one year immediately prior to receiving the gift, and for this reason cared for the household or was dependent on this person for support.

If neither of these conditions is met, the gift constitutes taxable income in the "other income" category. The Czech tax rate in such a case is 15% (or 23% for the portion of income exceeding the statutory limit).

Important note: Even if your income from the gift is tax-exempt, you are obliged to report this fact to the Czech tax authority if the value of the donated property exceeds CZK 5,000,000. The deadline for reporting ends with the deadline for filing the tax return for the year in which you acquired the property.

When Is the Sale of a Donated Property Tax-Exempt in Czechia?

If you decide to sell a donated property located in the Czech Republic, the income from this sale may be exempt from personal income tax. However, one of the following conditions must be met:

• Residence longer than 2 years: It is a residential property in which the seller had their residence for at least 2 years immediately prior to the sale itself.
• Ownership for at least 10 years: The time between acquiring the ownership right (via gift) and the sale of the property is at least 10 years. If you acquired the property before December 31, 2020, a shortened 5-year time test applies to you.
• Procuring housing needs: You do not meet the conditions for exemption based on the length of residence or ownership, but you will demonstrably use the funds obtained from the sale to procure your own housing needs.

When assessing these time limits, it is important to realize a fundamental rule of Czech tax law: the period during which the donor lived in or owned the property is not taken into account at all. For the donee, these time periods are calculated completely independently and start running "from zero" only from the moment the gift is acquired.

Rules for Using Funds for Your Own Housing Needs

If you claim an exemption on the basis that you will use the money from the sale to procure your own housing needs (e.g., buying a new apartment or house, reconstruction, but also paying off a housing loan), the Czech law sets strict time limits. This condition is met if:

1. You use the funds by the end of the taxable period immediately following the year in which you received the money.
2. Or you have already used an amount corresponding to the obtained funds for your own housing needs prior to acquiring them, but no earlier than in the year immediately preceding the year of their acquisition.

In this case, a reporting obligation applies. You must formally notify the Czech tax administrator of your intention to use the acquired funds to procure your own housing needs by the end of the deadline for filing the tax return for the year in which you received the money from the sale.

Tax Calculation: You Do Not Tax the Entire Purchase Price

What happens if you do not meet the conditions for tax exemption in the Czech Republic (e.g., you did not live in the house and are selling it immediately after the donation)? In such a case, the income from the sale is subject to income tax (the rate is again 15% or 23%).

However, the crucial and positive news is that the entire amount you receive for the sale is not subject to tax. You can legally deduct the following from the achieved income:

• The price of the property on the day the gift was acquired: An expert appraisal is used to determine the usual (market) price of the property at the time it was donated to you. An expert appraisal can also be prepared retroactively to the date the gift was acquired.
• Costs of improvement and maintenance: Amounts demonstrably spent on technical improvement, repair, and maintenance of the property during the time you owned it.
• Expenses related to the sale: Typically, this includes the Czech attorney's fee for preparing contracts and escrow, or the real estate agent's commission.

In other words, you only tax the net profit—i.e., the difference between the sale price and the original value of the gift, from which you further deduct demonstrable costs associated with the property and its sale.

Note: The above rules apply to Czech tax residents. If you are a tax non-resident, your situation may be subject to a different regime, and I strongly recommend an individual consultation with a tax advisor.

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Summary: Selling Donated Property in the Czech Republic

🚩 Reporting a gift over 5 million: Do not forget that even a tax-exempt gift over CZK 5,000,000 must be reported to the Czech tax authority on time.
🚩 Conditions for sale exemption: You do not pay tax on the sale if you own the property for a certain longer period (10 years, or 5 years), if you live in the property for at least 2 years immediately before the sale, or if you use the funds obtained from the sale to procure your own housing needs.
🚩 Notification of housing needs: If you rely on an exemption due to financing your own housing needs, you must notify the tax administrator of this fact.
🚩 You only tax the profit: If you do not meet the conditions for exemption, only the difference between the sale price and the property's price at the time of the donation is taxed, reduced by the costs of the sale, maintenance, and repairs.

Planning to Sell Property in the Czech Republic?

Selling a property is a complex process where having a professional by your side pays off. I will be happy to provide you with comprehensive legal services in the Czech Republic, including secure attorney escrow of the purchase price. Contact me or view more information about my real estate law services in Czechia.