On November 1, 2016 the Act No. 254/2016, amending the statutory measure of the Senate No. 340/2013 Coll., on the acquisition of immovable property tax, shall become effective. This amendment brings significant changes to the mode of payment of tax on the acquisition of immovable property.
The most striking change is that a purchaser will always pay the tax on the acquisition of immovable property; therefore, the parties in the transaction are not allowed to negotiate a contract in a different manner. For the record, we note that under the existing law it is the seller who pays the tax; however, the parties may agree otherwise. The amendment also eliminates the concept of guarantee of the other contractual party for tax payment.
The effective date for the application of the relevant new wording of the statutory measure is the moment of the rise of the tax obligation, namely the date of acquisition of ownership rights to the immovable property. For the acquisition of real estate recorded in the Land Registry in some typical cases (purchase and exchange agreements), the decisive date shall be the date of the application for registration in the Land Registry.
The amendment to the statutory measure brought a lot of other innovations, e. g change of taxation in case of transformation of legal entities, change of calculation of tax base in case of exchange of immovable property and has also changed the concept of tax liberation of new buildings and units.
Should you need an in-depth advice in respect of the new tax legislation for the acquisition of immovable property do not hesitate to contact us. Our team of lawyers is ready to assist.