Market and investment

Buy-to-let flat (investiční byt)

In Czech: Investiční byt

A buy-to-let flat (investiční byt) is a flat bought mainly to rent out or to preserve the value of money, not to live in. Its return depends on the price, rent, running costs, taxes and financing.

Also called: investment flat, investment property, rental flat, investiční byt, byt na investici

What it means

A buy-to-let flat, in Czech investiční byt, is a flat bought primarily as an investment. The owner usually rents it out for regular income and may also hope that it gains value over time. It is not a legal category: the same flat can be one owner's home and another owner's investment.

The difference shows up in financing and tax. Banks treat investment mortgages more strictly than loans for your own home, and rental income has to be declared for income tax.

How it works in the Czech Republic

From 1 April 2026 the Czech National Bank (ČNB) recommends that for investment mortgages banks lend at most 70 % of the collateral value (LTV) and that the debt-to-income ratio (DTI) does not exceed 7. This is a recommendation, not a binding limit. The ČNB defines an investment mortgage as a loan to buy a third or further residential property, or a residential property intended for rent. This is the situation as of October 2026.

Rental income from a flat is taxed under § 9 of the Czech Income Tax Act (zákon o daních z příjmů). The landlord can deduct either actual expenses or flat-rate expenses of 30 % of the income, up to CZK 600,000, and the chosen method cannot be changed retroactively. This is how the Financial Administration (Finanční správa) describes the rules for the 2025 tax period; check them for later years.

In practice an investor first estimates the rental yield, checks the location and rental demand, arranges financing and, after the purchase, signs a lease agreement (nájemní smlouva) with a tenant. It is wise to budget for months when the flat stands empty and for repairs.

Practical example

For example, an investor buys a 1+kk flat for CZK 3,500,000 to rent out. Because the flat is intended for rent, the bank treats the loan as an investment mortgage. If the bank follows the ČNB recommendation of 70 % LTV, it lends at most CZK 2,450,000 against a collateral value of CZK 3,500,000, and the investor pays the remaining CZK 1,050,000 plus transaction costs from own funds. The figures are illustrative only.

What to watch out for

  • Ask the bank in advance whether it will treat your loan as an investment mortgage and at what LTV.
  • Check the owners' association (SVJ) articles and house rules for limits on short-term rentals.
  • Budget for vacancies, repairs, the repair fund (fond oprav) and property tax, not just the rent.
  • Decide early between flat-rate and actual expenses and keep all receipts.
  • Rental income is never certain; weigh the expected return against the risks and other options.

Frequently asked questions

What counts as an investment mortgage in Czechia?

According to the ČNB, a loan to buy a third or further residential property, or a residential property intended for rent. From 1 April 2026 the ČNB recommends a maximum LTV of 70 % and DTI of 7 for such loans.

Do I pay tax on rent from a Czech flat?

Yes, rental income is taxed under § 9 of the Income Tax Act. You can deduct actual expenses or a flat 30 % of the income, up to CZK 600,000 (as the Finanční správa describes it for 2025).

Is the ČNB recommendation binding on banks?

It is a recommendation, not a binding limit. Ask your bank directly what conditions it will offer you.

On Lovec-Realit.cz

  • Rental yield (výnos z pronájmu)Rental yield (výnos z pronájmu) shows what percentage of a property's price the rent returns each year. Gross yield uses the rent only; net yield first subtracts the owner's costs.
  • Net rental yield (čistý výnos)Net rental yield (čistý výnos) is the annual rent minus the owner's costs, divided by the total purchase cost including transaction costs. It shows a more realistic return than gross yield.
  • Return on investment (návratnost investice, ROI)Return on investment (ROI, návratnost investice) shows the percentage profit made on the money put into a property. In Czech, návratnost can also mean the number of years it takes rent to pay back the investment.
  • LTV (loan-to-value)LTV (loan-to-value) is the ratio of the loan amount to the value of the collateral, i.e. the pledged property. It decides how much of a purchase a mortgage can cover and how much you must pay yourself.
  • Mortgage (hypotéka)A mortgage (hypotéka) is a long-term housing loan secured by a lien on a property. The borrower repays it in regular monthly instalments, usually over many years.
  • Lease agreement (nájemní smlouva)A lease agreement (nájemní smlouva) is the contract under which a landlord lets a flat or house to a tenant for temporary use in exchange for rent. Residential leases in Czechia are governed by the Civil Code.

Sources

Laws and official pages this text is based on (in Czech).

This text is for information only and has not yet been checked by a legal or financial expert. It is not legal, tax or financial advice. Verify important details in the listed sources or with a professional.

Updated 25 October 2026

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