Czech Republic Implements New VAT Rules for Real Estate Sector Effective July 2025

• New VAT rules for real estate in the Czech Republic effective from 1 July 2025
• VAT now applies to the first supply of a new building within two years of final approval
• Subsequent sales are VAT-exempt unless voluntary taxation is chosen
• Revised definition of substantial modification may require VAT on older property transfers
• Substantial modification involves changes in use or occupancy conditions with costs over 30 percent of the tax base
• Updated definition of a building site includes specific administrative actions and preparatory activities
• Classification of land as a building site depends on intended future construction of a permanent structure

Source: bdo.global

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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