Running a real estate business through a limited company works differently in Slovakia and the Czech Republic. Both tax rental income at the corporate level and let you depreciate buildings, but the rates, depreciation periods and VAT rules diverge – most notably the VAT exemption on property sales, which Slovakia ties to five years while Czechia switched to a 23-month test in mid-2025.
Why hold real estate in a company?
Owning rental property through a limited company separates the assets and the risk from the owner’s personal finances and lets profit be reinvested under the corporate tax regime. In both Slovakia and Czechia a company can deduct a wide range of property-related costs – depreciation, repairs and interest on an acquisition loan.
The trade-off is heavier administration: double-entry bookkeeping, a corporate tax return and rules on taking money out of the company. Whether the structure pays off depends on the scale of the rent, the plan to reinvest and whether the properties will later be sold – and the answer can differ between the two countries.
How is rental income taxed in each country?
In both countries, rent received by a company is ordinary taxable income reduced by related costs. The difference is the rate. Slovakia applies a tiered corporate income tax in 2026: 10 % for taxable revenues up to 100,000 €, 21 % above that, and 24 % over 5 million €. The Czech Republic applies a single rate of 21 %, which rose from 19 % in 2024.
For a smaller landlord company, this means Slovakia is often gentler at the entry level thanks to the 10 % band, while Czechia keeps one flat rate regardless of size. Neither corporate regime allows the flat-rate expense deductions available to individuals renting privately.
How are buildings depreciated?
Neither country lets a company expense a building at once; the cost is spread through depreciation, and the land is never depreciated. In Slovakia, residential and administrative buildings fall into depreciation group 6 with a 40-year period, while retail, service and warehouse buildings usually sit in group 5 over 20 years.
The Czech Republic uses different brackets: apartment buildings, flats and non-residential units are in group 5 over 30 years, whereas offices, hotels and shopping centres are in group 6 over 50 years. The same building can therefore be written off faster or slower depending on which side of the border it stands.
When is a property sale exempt from VAT?
This is where the two systems now differ the most. In Slovakia, a sale of a building is exempt from VAT once more than five years have passed since first occupancy or the first approval for use; sales before that are taxed. In the Czech Republic, a reform effective 1 July 2025 replaced the old five-year rule: only the first sale made within 23 months of the building’s completion is taxable, and everything afterwards is exempt.
Both countries let the seller opt to tax an otherwise exempt sale, which is useful when selling commercial property to another VAT payer. In Slovakia this option is barred for residential buildings and flats; in Czechia opting to tax a sale to a VAT payer requires the buyer’s consent and triggers the reverse-charge mechanism.
How does VAT work on rentals?
Here the rules run largely in parallel. In both countries the lease of real estate is exempt from VAT, and the landlord may voluntarily opt to tax the rent only when the tenant is a VAT payer using the property for business. Residential letting cannot be taxed in either country – in Slovakia since 2019, in Czechia since 2021.
The consequence is identical: if a company buys a property for exempt residential letting, it cannot deduct input VAT on the purchase or renovation. Deduction is available only where the rent is taxed. Both systems also adjust the deduction over time if the property’s use changes – Czechia over a ten-year window.
What other duties apply to a property company?
Beyond income tax and VAT, both countries levy a separate real estate tax that has nothing to do with VAT or corporate tax: in Slovakia it is a local tax set by each municipality, in Czechia it is governed by a dedicated act with rates that municipalities can raise through a local coefficient.
In practice, a landlord company in either country keeps a fixed-asset register, tracks technical improvements that change the tax base of the building, and assesses the tax and VAT treatment of every sale on its own facts. The rules reward owners who plan the structure before buying rather than after the first audit.
Considering buying, letting or selling property through a company in Slovakia or Czechia and want certainty on tax and VAT? We are glad to assess the regime and prepare a tailored calculation.
FAQ
What corporate tax rate applies to rental income in 2026?
Slovakia uses a tiered rate: 10 % for taxable revenues up to 100,000 €, 21 % above that and 24 % over 5 million €. The Czech Republic applies a single 21 % rate, which increased from 19 % in 2024. In both countries the rent is ordinary company income taxed after deducting related costs.
Is the VAT exemption on property sales based on five years in both countries?
No. Slovakia still uses a five-year test from first occupancy or first approval for use. The Czech Republic replaced its five-year rule on 1 July 2025 with a 23-month test: only the first sale within 23 months of completion is taxable, and later sales are exempt. This is the single biggest difference between the two systems.
Can a company deduct VAT when buying a flat for rent?
Only if the rent will be taxed. Residential letting is VAT-exempt in both Slovakia and Czechia and cannot be opted into taxation, so a company buying a flat for residential rent cannot deduct input VAT on the purchase or renovation. Deduction is available for commercial letting to a VAT-paying tenant where the landlord opts to tax the rent.