What changes did the Consolidation Package bring to the Community of Unit Owners and Housing Associations?

The consolidation package, aimed at consolidating public finances, has brought changes to more than sixty laws that have a significant impact on the activities of housing associations and unit owners' associations. The main changes are detailed below.

Adjustment of the VAT rate
One of the most important changes is the adjustment of the value added tax (VAT) rate. Only two new VAT rates have been introduced: a reduced rate of 12%, which replaces the previous rates of 10% and 15%, and a standard rate of 21%, which remains unchanged. This change also concerns the limitation of services subject to the reduced VAT rate.

Changes in VAT rates for specific services
Cleaning:
Previously the VAT rate for cleaning services was 10%, now it has been increased to 21%.

Water and sewerage, heat supply:
These services used to have a rate of 10%, now the rate has been increased to 12%.

Reduction of the VAT rate for construction work
There has been a reduction in the VAT rate for construction and installation work on residential buildings. The previous rate was 15%, now reduced to 12%. This change may have a positive impact on the cost of new construction and renovation of housing units.

Increase in corporate income tax
Another significant change is the increase in the corporate income tax rate from the current 19% to 21%. This increase will mainly affect housing cooperatives. Unlike unit owners' associations, these may carry out activities other than the management of the building and land, which may lead to a profit.

Increase in property tax
The consolidation package also increased property tax. The rate was increased to CZK 3.50 per m² for apartment buildings and condominiums (previously CZK 2) and CZK 14.50 per m² for garages (previously CZK 8).

New inflation coefficient
The coefficient for multiplying the tax rate by the size of the municipality where the property is located has remained unchanged. However, a new inflation coefficient has been introduced which will take inflation into account when calculating the tax. For this year, the coefficient has been set at 1 and its value for next year should be published by the end of June this year.