Short-term Rental Taxes: A Guide for Property Owners

You buy an apartment, decide to rent it via Airbnb or Booking.com and the first question is: how does the tax treatment actually work? The answer isn't complicated, but it differs from what you know from a standard lease.

Below is an overview of what awaits you as an owner – from the trade licence through flat-rate expenses to the local accommodation tax. And above all: where we can help with all the admin.

Why short-term rental is taxed differently from a standard lease

Long-term apartment rental falls under Section 9 of the Income Tax Act – it is rental income. Short-term rental to tourists is a different category. The tax authorities treat it as a business under Section 7, i.e. income from self-employment.

In practice this means one thing: you need a trade licence. Specifically the free trade "Accommodation Services". Registration at the trade licensing office is one visit and a CZK 1,000 administrative fee. Without a licence you face a fine and potential problems during a tax inspection.

How to claim expenses: flat-rate or actual costs?

As a sole trader you can deduct expenses from income and reduce your tax base. You have two options.

• Flat-rate expenses: A straight 60% of income with no receipts required. Simple and administratively light. However, flat-rate expenses can only be claimed up to CZK 1.2 million per year.
• Actual expenses: You deduct everything demonstrably connected to the rental – utilities, cleaning, management, repairs, apartment depreciation, platform fees. If your real costs exceed 60% of income, this route pays more.

Which approach is better for you depends on your specific numbers. It is worth sitting down with an accountant once a year and calculating both options.

VAT: when must you register

VAT does not affect most owners of one or two apartments. The obligation to register for VAT arises only when turnover exceeds CZK 2,000,000 over 12 consecutive months. Very few people with one or two apartments reach this threshold.

If, however, you manage a larger portfolio – say 5 or more apartments with high occupancy – you could approach CZK 2 million. In that case you must monitor turnover on an ongoing basis and submit the registration application in good time. Late registration carries penalties.

Short-term rental taxes are not a trap – they are rules you can handle if you know what to look for.

Local accommodation tax and guest logbook

Here comes an obligation owners most often overlook. Prague – like most Czech municipalities – collects a local accommodation tax. In Prague it currently amounts to CZK 50 per person per night. The tax is not paid by the guest; you as the accommodation provider are responsible for collecting and remitting it to the relevant municipal authority.

You are also obliged to keep a guest logbook and report foreign nationals. Platforms such as Airbnb collect the Prague accommodation tax automatically and remit it on your behalf – but only if you have correctly set up registration. Otherwise the obligation remains with you.

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Tax return, social security and health insurance

Income from short-term rental as a sole trader is declared in the tax return on the line for Section 7. The personal income tax rate is 15%, or 23% for the portion of income exceeding 36 times the average wage.

Note on social security and health insurance contributions: for long-term rental you pay neither. For a business under Section 7 you do – and this applies to short-term rental too. Minimum health insurance contributions in 2026 are around CZK 3,000 per month; social contributions depend on income and whether rental is your primary or secondary activity.

• Primary activity: higher contributions, calculated as for a regular sole trader.
• Secondary activity (you are employed or receiving a pension): social contributions apply only above the threshold amount, which changes annually.

The precise assessment of your situation – especially if you combine employment and rental – is best discussed with a tax adviser or accountant.

What Investerra handles for you

The tax administration of short-term rental contains many small details that are easy to miss: correct VAT setup on platforms, local tax remittance, guest logbook maintenance, foreign-national reporting. None of them is inherently complicated – but together they take time and require ongoing attention.

Investerra handles this administration for owners as part of property management. We remit the local accommodation tax on your behalf. We maintain the guest register. And if you are unsure about your tax setup, we offer a consultation to point you in the right direction – or connect you with a verified accountant who regularly works with short-term rentals.

Our goal is for the owner not to need to be a tax expert. All you need to know is that the payment arrives in your account within 5 days of the month's end, and we handle the rest.

Further reading: VAT on property purchase is covered by partner site novostavby.ai. New registration and reporting obligations are summarised in our article Short-term rental regulation 2026: eTurista.

Key takeaways

• Short-term rental = business under Section 7; you need a trade licence.
• Expenses can be claimed as flat-rate (60%) or actual – depends on your numbers.
• VAT is only relevant above CZK 2,000,000 annual turnover.
• Local accommodation tax in Prague: CZK 50 per person per night – you remit it as the provider.
• For a business you pay social security and health insurance contributions; the amount depends on whether it is your primary or secondary activity.
• The precise tax assessment depends on your specific situation – discuss it with a specialist.
• Investerra handles the admin for you: fees, records, platform setup.

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