According to the VAT directive, rent of the immovable property is generally VAT exempt. According to article 137 of the directive, Czech Republic provides a right of option for the VAT taxation on the rent of the immovable property, if rented to another taxable person for his business.
From 2021, this option is no longer available for the rent of residential property – family houses, flats or buildings where at least 60% of the space is designated for living. Thus the rent of such property is mandatorily VAT exempt.
If the VAT was claimed on the purchase or refurbishment of such property, that input VAT has to be adjusted according to article 187 of the directive. In CZ the adjustment period for the immovable property is 10 years.