In early 2018, the average price of rent in the capital is about SEK 330 per square meter per month. However, this is not the final amount. The Ministry of Finance is preparing significant changes to the tax system, which will likely raise the price of rented housing by up to 10%. Prague and other large cities in the Czech Republic will be particularly affected.
Thus, rents will not rise due to higher housing prices and a shortage of new apartments. Concurrent with the repeal of the supergross wage, there are plans to increase taxes on those who live solely by renting apartments or non-housing units. Tax increases are also expected to affect securities trading.

The rental housing market is already tight, but will it get even worse?

The rental market is expected to respond to these changes, and the increased tax burden will also increase rental prices, as landlords are expected to be less willing to accept lower profits. In Prague, the increase is estimated to be about 10%, while in other cities it will depend primarily on market mechanisms of supply and demand.
The Ministry of Finance has commented on speculation about possible increases in rents and housing prices. Although resigned Minister Alena Sirelová claims that this is a kind of cover-up and a desire of developers, we need to think deeply about this whole issue from multiple perspectives. After all, we cannot rule out retaliation from the taxpayers who feed the housing market. Why should they lose their income and have the burden fall on the last in the chain, the tenant? And if the tenant surrenders or has nothing else left, they will eventually give in.

Apartment rentals often cover the cost of mortgages

Moreover, rental income is often essential income to cover the mortgage that the landlord must pay on a regular basis. And this tax increase would not be a mere penny; it would be quite significant. The overall situation may be further exacerbated by the housing shortage and the growing demand for rental housing.
The tax burden should be increased from the current 15% to 19%, and only on incomes up to SEK 1.5 million. Beyond this limit, the tax rate would rise to 23%.