2026 rental tax return: the complete step-by-step guide

Rental-income filing duties depend on the tax year, taxpayer and other income. Verify the current Czech Financial Administration thresholds and § 38g before deciding whether a return is required; do not treat the 50,000 Kč figure as a universal outcome for every taxpayer.

When do you have to file a tax return

The obligation to file a tax return is dealt with by § 38g of Act No. 586/1992 Coll., on income taxes. Two limits are important for landlords - if you exceed them, you must file a tax return.

Different filing thresholds can apply depending on the taxpayer, employment income, other income and the relevant Czech tax year; verify the current § 38g rules before filing. This is revenue, not profit.

Do not use the outdated 6,000 Kč employee threshold. Current Czech Financial Administration guidance distinguishes the general annual threshold and the separate limit for other § 7-10 income of an employee who otherwise qualifies for annual settlement; the tax year and facts control whether a return is required.

If rental is your only taxable income, whether a return is required still depends on the current Czech threshold and facts; do not rely on this example as a universal rule.

Important: even if you do not have to submit a return, you can voluntarily file - typically to claim tax expenses and get back overpayments on advances. This is advantageous for landlords with high actual expenses.

Income from abroad: If you rent a property abroad (e.g. an apartment in Croatia), you must declare this income in the Czech Republic. The double taxation treaty credit or exclusion method will be used. Specifically, annex No. 3 is filled in.

§ 9 vs § 7 - which section is for you

The key decision that affects the tax rate, social and health insurance as well as administration is the classification of your rental income under the correct section of the Income Tax Act.

§ 9 generally covers passive rental of immovable property without additional accommodation services, but classification depends on the actual facts and current Czech rules; property count alone is not decisive.

§ 7 may apply where the actual activity and services constitute business income. A licence, property count or stay length alone does not decide the classification; check current Czech Financial Administration guidance.

Borderline cases: short-term Airbnb-type rentals. Current Financial Administration guidance distinguishes accommodation services from passive rent by the actual service package and activity. Cleaning, linen changes, reception or breakfast may support § 7 classification; handing over keys without such services may support § 9, but a seven-day stay alone does not decide the result.

Practical consequence: long-term passive rent is generally treated under § 9, but the actual services and activity determine classification. Five apartments do not automatically decide the section, tax or insurance treatment; obtain advice in borderline cases.

Actual expenses vs illustrative flat-expense method - how to decide

The lessor under § 9 can choose between two methods of applying expenses. The choice is made for each tax year separately - you can take actual expenses one year and a flat rate the next year (with the exception of some restrictions described below).

Illustrative flat-expense method: if available for this activity and tax year, the applicable percentage and cap must be verified with current Czech tax guidance; do not treat 30% as universal.

Actual expenses: keep records and supporting documents for the periods required by the applicable tax, accounting and limitation rules; do not assume one universal retention period. Advantages: tax expenses include all related costs - property depreciation, mortgage interest, repairs, maintenance, common area energy, insurance, property tax, administration, legal advice, management software. Disadvantages: time consuming, obligation to provide documentation.

Practical example - flat rate wins: apartment in a block of flats for 4 million Kč without mortgage, annual rent 180,000 Kč, actual expenses (boiler repair, property tax, small items) approx. 20,000 Kč, depreciation 80,000 Kč/year = 100,000 Kč actual expenses. Illustrative flat-expense method × 180,000 = Kč 54,000. In this case, the actual expenses are higher and will pay off. But...

Practical example - real winners: the same apartment, but new (bought last year for 6 million Kč), with a mortgage of 4 million Kč for 30 years. Annual rent Kč 240,000, mortgage interest Kč 130,000, depreciation Kč 120,000, repairs + insurance Kč 25,000 = Kč 275,000. Tax base at actual: 240,000 − 275,000 = −35,000 Kč (loss that can be claimed in the next 5 years!). Flat rate: 240,000 × 0.7 = Kč 168,000 tax base × the applicable current rate = Kč 25,200 tax. The difference: Kč 25,000 per year, which in 30 years amounts to Kč 750,000. (illustrative example only; verify current Czech rules).

Rule of memory: if you have a mortgage or the property is less than 30 years old (= active depreciation), calculate the actual expenses. If the property has long been depreciated and without a mortgage, the flat rate is simpler and often more advantageous.

When you cannot change the method: If you applied the flat rate last year and you have a property in the depreciation group that you would just start depreciating, you can only switch to real expenses after 3 years have passed since the last flat rate. This rule prevents last-minute optimization.

Which incomes to tax - a complete list

In the rental income (Section 9), include all monetary and non-monetary income that you actually received in the given year (the cash principle is applied - the date of receipt to the account, not the date of issuing the invoice, is decisive).

• Rent - monthly rent from all tenants for the given year (12 months x amount of rent).
• Additional rent payments from previous years - if the tenant paid the delayed rent in 2025, it belongs to the return for 2025, not for the year when the rent was incurred.
• Advances for services - ATTENTION: advances for services (energy, water, heat) are NOT income, because you will eventually bill them. Include only the rent itself in your tax income.
• Invoice arrears - if the tenant paid the invoice arrears, it is not your income (you just forward it to the suppliers). If, on the other hand, you return the overpayment, it is not an expense.
• Income from advertising on the facade - if you have a billboard, advertising area or mobile operator's antenna on your house, the income belongs to § 9.
• Bonuses and severance payments from the tenant - e.g. one-time payment for the reservation of an apartment, severance payment in the event of an agreement to terminate the lease early.
• Interest on the security deposit - account handling does not remove the tenant's statutory interest right; account, interest and settlement must follow § 2254 and current law.
• Income from the sale of real estate - the sale is not ordinary § 9 rent; classify it under the current Income Tax Act and check the current exemption tests and dates rather than relying on fixed five- or ten-year periods.

Actual expenses: complete list of items

If you go the actual expenses route, you must keep records of all items related to the rental property. Rule: the expenditure must be directly and demonstrably linked to the achievement, securing and maintenance of rental income (Section 24 of the Income Tax Act).

• Real estate depreciation - the biggest tax advantage, see separate chapter below.
• Mortgage interest - only the interest part of the installment, not the principal. The bank issues an annual certificate of interest paid.
• Real estate insurance - include only insurance actually purchased and tax-deductible under the applicable rules; landlord insurance is not universally mandatory.
• Immovable property tax - annual payment to the municipality.
• SVJ long-term repair contributions: tax treatment depends on the taxpayer, income category and current Czech rules; do not automatically deduct the entire contribution when paid.
• Costs for managing the SVJ - administrator's remuneration, audit, meetings (if the SVJ budgets for the owners).
• Repairs and maintenance - boiler replacement, painting, battery replacement, roof repair.
• Energy of common areas - if the landlord pays (typically electricity in the corridor, elevator, water in the garden).
• Regular inspections - chimney, gas, wiring, fire extinguishers.
• Costs of advertising and finding a tenant - Sreality, Bezrealitky, real estate agent, photography.
• Legal and tax consultancy - costs of a lawyer when drawing up a contract, a tax consultant.
• Software for rent management - subscription to applications such as Grento.cz (yes, it is a fully tax-deductible expense).
• Travel allowance for real estate - if you drive your own car for inspection, repair or handover, you can apply Kč 5.60/km (rate 2026) or actual expenses for PHM.
• Bank fees - if you have a separate account for rent, its fees are an expense.

Real estate depreciation - step by step

Depreciation is a gradual accounting breakdown of the purchase price of the real estate into tax expenses. This is the largest single item in most landlords' tax returns and is often enough on its own to make the resulting tax very low or zero.

Introduction price: the purchase price of the property (i.e. the price according to the purchase agreement) plus all related costs - acquisition tax (for properties acquired before 2020), cadastral fees, expert opinions, lawyer, tax advisor, reconstruction, if any, carried out before the start of the lease. Attention: the price of the land is depreciated separately (or not depreciated at all), so deduct the value of the land from the purchase price of the property (typically 15-25% for an apartment, 30-50% for a family house).

Depreciation groups: apartments and family houses belong to the 5th depreciation group (depreciation period 30 years). There are two methods of depreciation - straight-line (straight-line, the same amount each year) and accelerated (more in the early years). The choice is made at the start of depreciation and cannot be changed.

Equal depreciation: first year 1.4%, subsequent years 3.4% of the entry price. Example: an apartment for 5,000,000 Kč (after deducting the land). First year: Kč 70,000, subsequent years: Kč 170,000. After 30 years, a total of Kč 5,030,000 (minor inaccuracy in the decree rates).

Accelerated depreciation: coefficient 30 in the first year (5,000,000 / 30 = Kč 166,667), in subsequent years 31, 32, etc. (year 2: Kč 333,333, year 3: Kč 322,581, gradually decreases). Suitable for landlords with high incomes who want to reduce tax as much as possible in the first years.

Start of depreciation: only after you classify the property as a so-called commercial property - typically the first day you actually rent the property. If you buy an apartment in January, but the first tenant moves in in June, you will only start applying depreciation halfway through the year (50% of the annual rate).

Technical appreciation: classify major renovations under the current Income Tax Act and applicable tax-year threshold, evidence and depreciation rules. Do not use a fixed Kč 80,000 threshold without checking the relevant category and effective date.

Depreciation calculation template: Apartment 75 m² bought in 2024 for Kč 6,000,000, land share 20% = entry price 4,800 000 Kč. Straight-line depreciation: year 2024 (inclusion in September, 4 months) - 4,800,000 × 0.014 × (4/12) = Kč 22,400. Year 2025 (whole year) - 4,800,000 × 0.034 = Kč 163,200. Year 2026: Kč 163,200.

Discounts and deductions - don't forget to reduce the tax

Z calculated taxes you can deduct discounts that reduce the tax directly (not the tax base). If you have a tax of 30,000 Kč and discounts of 30,000 Kč, the resulting tax is 0 Kč.

Taxpayer discount and credits: apply the amounts and conditions applicable to the relevant Czech tax year. They are not automatically refundable merely because calculated tax is lower.

Spouse discount - Kč 24,840 if the spouse has own income up to Kč 68,000.

Tax allowance for children - Kč 17,004 for the first child, 22 per year Kč 320 for the second, Kč 27,840 for the third and each subsequent (2026 rates). It can also be applied as a tax bonus if you are in the negative.

Deduction of interest from a mortgage for your own housing - ATTENTION, only if you use the apartment for your own housing. If you rent an apartment, the interest goes to § 9 as an expense (not as a tax deduction).

Deduction for qualifying donations: apply the minimum, maximum and other conditions effective for the relevant Czech tax year; verify current Financial Administration guidance.

Deduction of pension and life insurance - pension over Kč 6,000 per year, life insurance up to Kč 48,000 annually.

Tax bonus - if the tax is negative after applying discounts (= you have a tax bonus), the state will reimburse you for it. Typically for taxpayers with a low income and several children.

Completing Annex No. 2 - step by step

Rental income is reported in Annex No. 2 of the tax return (form 25 5405/D MFin 5405/D). This appendix is used exclusively for § 9 - for § 7, appendix no. 1 must be filled in.

Line 201 - Income according to § 9: write here the sum of all rental income for the year (only rent, not advance payments for services).

Line 202 - Expenses according to § 9: enter the expense method and amount applicable under the relevant Czech tax year, or the actual expenses from your records.

Line 203 - Partial tax base: difference between 201 and 202. If the value is negative (actual expenses higher than income), you write 0 in line 203 and claim the loss as a deduction in the next 5 years (lines 41-45 of the main form).

If you use actual expenses, on on the other side of the attachment, you fill in a detailed breakdown: the number of rented properties, their addresses, entry prices, depreciation in the given year. The tax office uses these data for cross-checking - if you indicate depreciation of Kč 200,000, but the entry price is only Kč 1 million (= max. depreciation of Kč 34,000), the office will request an explanation.

Main form: transfer the partial tax base from Appendix No. 2 (line 203) to line 39 of the main form. Here it is added to the basis of employment tax (from Appendix No. 1A) and other income. A tax at the rate applicable for the relevant Czech tax year (at the rate and threshold applicable for the relevant Czech tax year) is calculated from the total base.

The progressive rates and threshold applicable to the relevant Czech tax year must be checked with the Financial Administration.

Deadlines, penalties and methods submission

The standard deadline for submitting returns is 1 April (on paper) or 1 May (electronically via a data box or via the Financial Administration portal). If the return is processed by a tax advisor, the deadline is extended to 1.7.

Tax payment and late-payment interest follow the current filing deadline and Tax Code; do not use a fixed filing-day or CNB-plus-eight percentage formula without checking the relevant tax year and facts.

Late or missing tax returns can trigger statutory penalties. The conditions, amounts and calculation must be checked under the current Czech Tax Code and tax year.

Tax advances for the next year depend on the applicable Czech tax year and the taxpayer's last liability; verify the current Financial Administration guidance.

Zmethods of submission: 1) on paper at the FÚ office (original signature required); 2) data box (free, automatic confirmation); 3) via the MY taxes portal (online form, authentication by bank identity or NIA); 4) through a tax advisor.

Recommendation: if you have a data box, use it - the return is submitted in 5 minutes, the form is interactive with automatic calculations. The MY tax portal is even more user-friendly and offers pre-filled data from the previous year starting in 2024.

Joint property of spouses and co-ownership

If you own a property with your wife/husband in joint property of spouses (SJM), either spouse can include rental income in the tax return (Section 9, paragraph 2 of the Act). The choice is made for each year and for the entire income - it is not possible to divide half to one and half to the other.

Optimization with SJM: allocate income to the spouse with lower other income. Example: the husband earns Kč 1,200,000 per year, the wife is at home with the children. If you declare a rent of Kč 200,000 with your spouse, the the illustrative tax result depends on the applicable current rate. If the wife has no other income, you will use the taxpayer's discount of Kč 30,840 and the tax will be Kč 0. Annual savings: Kč 30,000.

Co-ownership without SJM (typically siblings, partners): income and expenses are divided according to the share in the property. If you own 50%, you will include 50% of rent and 50% of expenses and depreciation on your return. The other person will state his 50%.

Beware of consents: if you are a co-owner and someone else has a higher share, you need their consent to rent (§ 1126 NOZ). Without consent, the co-owner can contest the rental agreement as invalid.

Common mistakes and checklist

Z analysis of tax audits reveals the 8 most common mistakes of landlords.

• Including advance payments for services in income - wrongly inflated tax base. Advance payments are NOT income.
• Applying mortgage interest as a deduction and as an expense - you can only do one. For a rented apartment, always as an expense in § 9.
• Bad depreciation - calculated from the full price including the land. The land is not depreciated.
• Application of technical evaluation (reconstruction over Kč 80,000) as a one-time expense instead of an increase in the entry price.
• Change from a flat rate to actual expenses without the 3-year period having expired - the tax office will mark this as incorrect.
• Failure to include rent supplements from previous years - if the tenant paid you extra for 2023 in 2025, it belongs to the year 2025.
• Ignoring a tax loss - if you have a loss in one year, carry it forward to the next 5 years.
• Late submission due to the lack of preparation of documents - always review the past year in January, don't wait until the end of March.

Practical preparation of documents

Preparation of documents is half the battle. If you have everything ready, filling out the return is a matter of hours. If you're looking for documents in boxes after a half-day raid, it's easy to make a mistake.

Income side: bank account statement for the whole year, which shows all rent payments. Recommendation: keep a separate rental account so you don't mix income with personal consumption. Create the table Month → Tenant → Amount from the statement. The sum must correspond to line 201 of the return.

Expenses side (actual expenses): "Rent 2025" folder with sub-folders: 1) Mortgage - annual bank confirmation; 2) Insurance - insurance contract + proof of payment; 3) SVJ - billing + annual overview of the repair fund; 4) Corrections - all invoices and receipts; 5) Real estate tax - assessment and proof of payment; 6) Travel fee - log book; 7) Advertising - invoices of Sreality, Bezrealitky.

Property depreciation card: keep a table with dates, entry price, depreciation group and accumulated depreciation for the period required by the applicable tax and accounting rules; retain it while it supports the property's tax treatment.

Backup copy: scan documents to PDF and store them securely. Retain originals and backups for the periods required by the applicable tax, accounting, limitation and data-protection rules rather than assuming three or ten years.

Software for lessors: the Grento.cz application automatically generates a tax overview for the year - summarizes income, keeps expense records, calculates depreciation and creates an export for filling out returns. Saves 4-8 hours of preparation and eliminates arithmetic errors.

Pre-filing checklist: 1) Do I have all rental income accounted for? 2) Have I decided between flat rate and actual expenses? 3) For real ones: is the depreciation correctly calculated without the land? 4) Are all expenses documented? 5) Have I applied all the discounts (taxpayer, spouse, children)? 6) Do I know when I have to pay tax? 7) Do I have reserves ready for next year?

Conclusion

Rental tax returns are not rocket science, but they do require a systematic approach. If you understand the difference between the flat rate and actual expenses, you know how to correctly calculate depreciation and you know which expenses are tax deductible, you will save tens of thousands of crowns annually and avoid questions from the tax office. The key is to keep continuous records - not to hunt for documents at the end of March. If you use a dedicated rental management app, most of the work is automated and you just copy the totals into the form in April. Every day saved and every unpaid fine is money that stays in your pocket.

> Czech-law scope and editorial note: Legal, tax, accounting, tenancy, service-charge, condominium, metrology, insurance and data-protection statements in this article refer to the Czech Republic and the rules effective for the relevant date. Figures and examples are illustrative, not legal or tax advice. Verify current rules with the relevant Czech authority or a qualified adviser.

> Czech tax clarification: Rental-tax classification, filing thresholds, rates, deductions, advances and social or health contributions depend on the actual activity, services, tax year and taxpayer. Passive rent is generally considered under § 9, while accommodation with services may fall under § 7; property count or stay length alone is not decisive. Check the current Czech Financial Administration guidance.