The European Commission recommends that the Czech Republic implement a higher property tax. Critics argue: Why isn't the commission also addressing the difference between Czech and Western European wages?

PRAGUE – The European Commission, in its latest assessment of the economic situation, has recommended that the Czech Republic increase the property tax and align it more closely with the actual market value of properties. According to Brussels, property taxation in the Czech Republic has been among the lowest in the European Union for a long time, and its reform could contribute to greater efficiency in the housing market and improve its affordability.

The Commission notes that the revenue from property tax in the Czech Republic amounts to approximately 0.4 percent of gross domestic product, while the average for the European Union is around 1.8 percent of GDP. The recommendations also include limiting certain tax advantages for short-term rentals and reassessing state support for mortgage loans. According to the European Commission, some forms of mortgage support contribute to increased demand for housing, which in turn drives up property prices. The aim of the proposed measures is to create a more stable and affordable housing market.

However, the proposal has sparked a lively discussion among experts and the public. Many economists point out that simply increasing the property tax will not solve the problem of housing affordability. On the contrary, there are concerns that landlords may pass on the higher costs to tenants, which could further burden households that already face high housing costs. Experts have long warned that the main cause of the housing crisis in the Czech Republic is the insufficient construction of new apartments, complex building regulations, and lengthy permitting processes. Without a significant increase in the supply of apartments, they say, a fundamental improvement in the situation cannot be expected, regardless of the level of taxes.

The debate also includes questions about the income levels of Czech households. Critics of the European Commission's recommendations point out that while Brussels is calling for higher property taxes, there is less discussion about the persistent gap between wages in Central Europe and the economically strongest countries in Western Europe. They argue that the issue of real wage growth, productivity, and convergence of living standards in individual member states should also be part of a broader discussion. The discussion about the future of housing in the Czech Republic continues. While the European Commission sees room for higher property taxation, the expert community points out that without more extensive housing construction and faster building permitting, a fundamental change in the current situation cannot be expected.

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