Rental yield on a Prague investment flat in 2026 after all costs

Gross yields on Prague flats are holding at around 3–4%, and less once tax, management and empty months are taken into account. We set out the calculation district by district, show how yields differ by flat size and explain when a mortgage makes sense.

An investment flat in Prague currently generates a gross rental yield of roughly 2.7% to 3.8% a year. After deducting vacancy, management, owner's costs and tax, what remains is usually 2% to 3%. At today's interest rates, the rent alone will not pay for a mortgage-financed purchase, so the return depends mainly on how much the flat rises in value.

Gross and net yield: what is usually left out of the calculation

Gross yield is simple to calculate: divide the annual rent by the purchase price. However, it is mainly the figure quoted in property listings. For an investment decision you need the net yield, meaning what you actually keep each year after all costs, divided by your total investment. Besides the purchase price, the total investment includes the agent's commission, legal fees, furnishing the flat and any renovation. On the cost side, the items most often overlooked are:

months when the flat stands empty between tenants, and the repainting and minor repairs that go with each changeover
the part of the contribution to the repair fund and the owners' association (SVJ) charges that cannot be passed on to the tenant
property tax (daň z nemovitých věcí) and insurance, covering both the flat and the landlord's liability
letting management, advertising and tenant selection, whether you pay an agency or spend your own time on them
income tax on the rent and the cost of filing a tax return

Rents quoted in indices generally exclude advance payments for services. The tenant pays these separately and they do not increase your return.

Yields by district and flat size in 2026

According to the Deloitte Rent Index, rents in Prague in Q2 2026 averaged CZK 462 per square metre per month, 0.9% lower than in the previous quarter. The highest rents were in Prague 7 (CZK 493), Prague 1 (CZK 490) and Prague 2 (CZK 482); the lowest were in Prague 10 (CZK 442) and Prague 4 (CZK 443). According to the Deloitte Real Index, which is based on purchase contracts registered in the Land Registry (katastr nemovitostí), flats in Prague sold for an average of CZK 153,100 per square metre in the first half of 2026. The most expensive district was Prague 1, at CZK 216,700.

These figures give an indicative gross yield of around 3.6% for Prague as a whole. In Prague 1 it comes to only about 2.7%, because prices are the highest there and rents fell by 3% quarter on quarter in Q2. For the other districts, we use median prices from Land Registry data for April to September 2026. In Prague 2, with a median of around CZK 199,000 per square metre, the yield is around 3%. In Prague 7, with a median of around CZK 165,000 per square metre, it is about 3.6%. In Prague 4, with a median of around CZK 144,000 per square metre, it is approximately 3.7%, and in Prague 10, with a median of around CZK 131,000 per square metre, roughly 4%. Exact figures vary by building and street, but one simple rule applies: the more expensive the square metre, the lower the rental yield and the bigger the bet on future price growth.

Studio, 2+kk or family flat?

Tenants pay the most per square metre for small flats, so studios and 1+kk flats tend to have the highest gross yield. They also have drawbacks, however. Tenants change more often, the flat stands empty more frequently, it wears out faster and managing it takes more time. From an investment perspective, the best option is therefore usually a 2+kk flat of roughly 45 to 65 m². It appeals to the widest range of tenants, from individuals to couples and corporate tenants, tenants stay longer, and it also sells well as a home for owner-occupiers. Larger family flats (3+kk and 4+kk) command lower rent per square metre and attract a smaller pool of tenants. Families often stay in them for many years, though, so the flat spends less time empty between tenancies. They make sense mainly in areas with good schools and where you intend to use them for your own family one day.

New build or an older flat to renovate?

New builds are the most expensive segment of the rental market. According to Deloitte, tenants paid an average of CZK 498 per square metre for them in Q2, compared with CZK 459 in brick buildings. According to the Real Index, new builds achieved prices of approximately CZK 157,000 per square metre in the first half of the year, so the gross yield on a new build can approach 3.8%. A new build also has low repair costs in the first years, energy-efficient running costs and often parking. On the other hand, you buy at a price that includes VAT and the developer's margin, you pay higher building management fees, and in new projects you compete for tenants with other investors.

An older flat that you renovate after purchase gives you more scope to influence the yield. You buy more cheaply and, with a high-quality renovation, you can bring the rent closer to that of newer flats. You must, however, budget for the cost and the construction period during which the flat earns nothing, and take into account the condition of the building's common parts. A building that will soon need work on its façade, roof or risers will reduce your yield for years through a higher repair fund contribution or an owners' association loan. Before buying, therefore, ask for the minutes of the owners' association meetings, the state of the repair fund and the repair plan.

Mortgages and leverage: when they pay off

Borrowed money increases the return on your own equity only when the property earns more than the loan costs. According to the Swiss Life Hypoindex, the average offered mortgage rate rose to 5.79% in October 2026. For a ten-year fixed rate with a loan of up to 80% of the property's value, it reaches 6.35%. Meanwhile, the net yield on a Prague flat is typically around 2.5%. Today, therefore, a loan does not increase the return but reduces it, and at the outset it usually requires topping up the monthly payments from your own funds.

In addition, since 1 April 2026 the Czech National Bank has recommended that banks provide mortgages on investment properties, meaning a third or further home or flats intended for letting, up to a maximum of 70% of the property's value (LTV) and seven times the applicant's net annual income (DTI). This is a recommendation, but banks follow it, so for an investment flat you will usually need at least 30% of the price from your own resources. A mortgage makes sense if you are counting on long-term price growth, have a secure income to cover the shortfall and have thought through what you will do if rates rise when the fixed period ends.

Taxes, insurance, management and vacancy

Income from long-term letting received by an individual is taxed under Section 9 of the Income Tax Act (zákon o daních z příjmech). The rate is 15%. The 23% rate applies to the part of the total tax base exceeding CZK 1,762,812 for 2026. No social security or health insurance contributions are payable on rental income that is not part of a business. You can claim expenses in one of two ways. The first is a flat-rate deduction of 30% of income, up to CZK 600,000 a year. The flat rate covers all expenses, so you cannot claim depreciation or mortgage interest alongside it. The second option is actual expenses. These include loan interest, repairs, insurance, property tax, management and tax depreciation. A flat falls into depreciation group 5 and is depreciated over 30 years; with straight-line depreciation, the rate is 1.4% in the first year and 3.4% in subsequent years. Land cannot be depreciated. If the purchase is financed with a mortgage, or after a major renovation, claiming actual expenses usually works out better.

If you sell the flat, the gain is exempt from income tax only once the holding period test has been met. For properties acquired from 2021 onwards, you must have owned the flat for at least ten years. Foreign investors pay tax on rental income from a Czech flat in the Czech Republic and must file a Czech tax return. How this income is reflected in tax in their country of residence is governed by the relevant double taxation treaty. If you manage the flat from abroad, treat professional management as a given cost. Estimate vacancy conservatively at one month a year, and more for small flats with frequent tenant turnover. Always check the tax implications with a tax adviser in advance.

Worked example: an investment of CZK 8 million

Take a 55 m² 2+kk flat in Prague 8 or Prague 4 at roughly CZK 145,000 per square metre, i.e. approximately CZK 8 million. At a rent of CZK 460 per square metre, you receive CZK 25,300 a month, or CZK 303,600 a year. The gross yield is therefore about 3.8%. The other figures in the example are our own model assumptions, not market data, and for simplicity they exclude acquisition costs. We assume one empty month, so the rent actually collected falls to CZK 278,300. Management at 10% of collected rent comes to CZK 27,800. We estimate the repair fund contribution that cannot be passed on to the tenant, insurance, property tax and minor repairs at CZK 40,000. Before tax, you are left with about CZK 210,500, a net yield of 2.6%.

If you opt for flat-rate expenses, you will pay approximately CZK 29,200 in tax. After tax, you are left with about CZK 181,300, a net yield of around 2.3%. If you claim actual expenses and depreciation, from the second year onwards depreciation of the building will largely or entirely eliminate the tax base. The net yield thus stays close to 2.6%. Depreciation, however, tends to defer tax rather than cancel it, because if you sell before meeting the holding period test, it reduces the flat's tax base cost. Now consider the same flat with a mortgage of 70% of the price, i.e. CZK 5.6 million over 30 years at a rate of 5.8%. The repayment comes to roughly CZK 32,900 a month. The rent after costs leaves about CZK 17,500 a month, so you would need to top up approximately CZK 15,000 a month from your own pocket. With CZK 2.4 million of your own money invested, such an investment would pay off only if the flat's price rises over the long term.

Frequently asked questions

What net yield is realistic for a Prague investment flat? For a long-term let without a mortgage, usually 2% to 3% a year on the total investment. The exact figure depends on the district, the size and condition of the flat, and how efficiently you manage it.

Does it pay to buy an investment flat with a mortgage today? Purely from a rental perspective, no, because interest of around 5.5% to 6% is higher than the net rental yield. It can make sense if you are betting on long-term price growth and can cover the monthly top-ups without straining your budget.

Can foreign buyers invest in Prague? Yes, foreigners can buy a flat in the Czech Republic. However, they must declare and pay tax on the rental income in the Czech Republic, and when financing through a Czech bank, the loan application may be assessed more strictly. Before buying, we recommend checking your specific situation with a lawyer and a tax adviser, as both tax rules and bank recommendations change.

If you are considering buying an investment flat, DALILE LIVING can help you choose a suitable location and layout, assess the building, handle the renovation and arrange the subsequent letting. We will be happy to tailor the calculation to a specific property.