Local property tax coefficient

The local coefficient is a multiplier of Czech property tax by which a municipality can raise or lower the tax on its territory. Under Section 12 of Act No. 338/1992 Coll. it is set between 0.5 and 5.0, to at most one decimal place. If the municipality sets none, the coefficient is 1.0.

How to read it

The coefficient says how many times the tax is multiplied: 2 means double the tax, 0.8 means a fifth less. The municipality sets it by a municipal ordinance for the whole municipality, an individual cadastral area, a city district, or a group of properties such as residential buildings or garages. For specified properties the council may issue a separate formal measure (opatření obecné povahy).

• for arable land, gardens, orchards, permanent grassland and unusable other areas only a coefficient for the whole group is allowed, between 0.5 and 1.5
• if several local coefficients apply to one property, the law decides which one is used; in the end only one applies
• alongside the local coefficient there is a municipality-size coefficient and an inflation coefficient, so the local one alone does not tell you the amount of tax

When a change takes effect

An ordinance applies to the following year's tax only if it becomes valid by 1 October. A formal measure must be sent to the tax office by 30 June of the preceding year. The tax office applies a changed coefficient itself; the owner does not need to file a new return.

Since 2024 (the consolidation package) a local coefficient can also lower the tax, because it may be below 1.0. Further rule changes apply from 2025.

What it means for a buyer

The tax is assessed on the situation as of 1 January, so a buyer first pays it for the year after the purchase, using the coefficient valid in that year. Coefficients for a specific plot or building can be looked up in the Financial Administration's application by cadastral area and parcel number; the wording of the municipal ordinance prevails.