A legal perspective on coliving

15.12.2025
Greats: Martina Křižková, Jakub Šoupa, Jakub Polášek, Robert Bezecný

Housing is a basic human need and the right to it is even indirectly derivable from of the Charter of Fundamental Rights and Freedoms. Background Housing varies not only according to individual requirements, but also across countries, regions and social classes. Traditional ways of satisfying housing needs remain most often Rent or ownership housing. Social a economic developments of recent years, however, have brought new forms that respond to changing lifestyles, job mobility and urbanization pressure from big cities. One of these alternatives is coliving.

What is coliving?

From a legal point of view, coliving still lacks a clear legal definition in the Czech environment. It cannot be clearly classified under traditional forms of real estate use, such as renting, subletting or accommodation services, while coliving may by its nature bear the characteristics of all these forms of use. The lack of clear legal regulation raises questions not only about the rights and obligations of individuals involved in coliving, but also, for example, about taxation. A precise legal definition could then clarify these key uncertainties.

Coliving is a modern form of shared housing that responds to increasing urbanisation, the flexibility of working life and the need for affordable, quality accommodation. In particular, it consists of the intermingling of private residential units and shared spaces for work or social life, creating a hybrid between individual and community living.

In the Czech context, coliving can be understood as a continuation of historical efforts for collective housing, but this time without ideological overtones and with an emphasis on economic efficiency, sustainability and community values. Although this concept has become a common part of urban housing abroad, it has not yet found a wider application in the Czech Republic. One of the main reasons for this may be the persistent legal uncertainty regarding its anchoring in legislation or the still relative availability of owning or renting housing.

How to legally define coliving

Coliving is a hybrid form of real estate use that straddles several contractual types, namely, a lease of an apartment or house within the meaning of Section 2235 et seq. of Act No. 89/2012 Coll., the Civil Code, as amended (the “CC”), an accommodation contract (temporary lease) pursuant to Section 2326 of the CC and, in some cases, a sublease within the meaning of Section 2274 et seq. of the CC. Since the Czech legal system does not have any special regulation for coliving, its legal qualification will depend on the specific purpose and setting of the contractual relationship. However, the actual functioning of the project must correspond to the chosen contractual type. A mere “marking” accommodation services to rent an apartment, or vice versa, is not in itself sufficient for the courts or administrative authorities to accept the chosen legal classification.

Rent, sublet or accommodation?

In specific cases, it would then be assessed whether the legal characteristics of one of the above-mentioned models of use of real estate would be fulfilled.

The lease of a flat is the letting of the property for use in order to satisfy the tenant’s housing needs. Typically, it creates a longer-term right of occupancy, the purpose of which is to provide a home, i.e. a space in which the individual realises his or her privacy and social ties[1].

In contrast, the Accommodation Contract has the nature of a temporary lease. Its purpose is not to create a household but to satisfy a temporary need for accommodation. According to settled legal interpretation, it is a special type of contract which is similar in content to a lease but differs in its purpose and the nature of the services provided. For example, the Supreme Court has emphasised in the past that the use of a dwelling for the short-term accommodation of third parties does not fulfil the concept of housing and is therefore an accommodation, not a tenancy[2]. Typically, this will involve services provided by hotels or apartments.

Subletting is then a situation where the tenant lets the rented property or part of it to other persons for use. Typically, this is done with the landlord’s consent and as part of an existing tenancy. This model is quite common in coliving practice, where the operator (the tenant of the whole building) concludes sublease agreements with individual users, thus avoiding the accommodation services regime as well as the more strictly regulated lease. Nevertheless, even here, if the actual purpose of the contract does not correspond to the satisfaction of a housing need, this relationship can also be legally assessed as an accommodation service.

It follows from the foregoing that the nature of a contract is not determined by its name, but by the actual purpose and content of the legal relationship negotiated for a particular case. Coliving may thus fall into the grey area between rent, subletting and accommodation, each of which is subject to a different legal regime, in particular as regards the protection of the weaker party, the grounds for termination or, for example, the tax consequences. Particularly in the tax area, it must be stressed that this classification is not a reflection of the basic principles of tax procedure, which favour the content over the ‘investor’s choice’form for tax assessment, but a reflection of the objectively assessed nature of the supply by the tax administrator. Thus, if the tax administration concludes that the actual operation corresponds to an accommodation service, it will not accept the formal designation of the contract as a lease or sublease and may proceed with any tax assessment.

Assessment criteria

In particular, the following criteria must be evaluated for the legal qualification of the contractual relationship in individual cases:

the purpose of use – whether it is housing or just temporary accommodation. In this respect, it should be added that, according to the Constitutional Court, housing cannot be limited to mere overnight accommodation, but consists in the whole complex of providing for a person’s needs in both material and mental terms[3];

the length of the relationship – the longer the relationship, the more likely we can infer a purpose adequate to provide for housing needs;

type of accompanying services – accompanying services are one of the defining features of accommodation. However, this does not mean that certain services cannot be associated with the rental, but the nature and extent of the services will be decisive. The more these services correspond in scope to the services normally provided by accommodation (cleaning, shared facilities, reception, catering, parking, etc.) and the greater their importance in relation to the use of the space itself, the more likely it is to be accommodation and not rent.

In practice, for example, the operation of an apartment building with long-term contracts and fewer accompanying services may be legally qualified as a lease (or sublet), while a solution with shorter stays and extensive services will be closer to the institution of accommodation.

In order to differentiate between what activity is considered as rent and what is considered as the provision of accommodation services, the General Financial Directorate issued a methodological instruction which describes the criteria for differentiating between rent and accommodation services[4].

Abroad

Unlike the Czech Republic, where coliving is not legally anchored, London, for example, is already a few steps further. In the London Plan Guidance adopted in February 2024, coliving is defined as a specific form of shared housing for adults who cannot or do not want to use traditional forms of housing. These developments must include at least 50 self-contained and furnished residential units, together with extensive shared spaces for social, work and recreational purposes. The Guidance also sets a minimum length of stay for a person in the property (at least three months) and requires uniform management of the property. In London, coliving is thus differentiated from both traditional rental housing and commercial accommodation.

In contrast, Vienna, like the Czech Republic, does not have a separate legal framework for coliving. Related regulations focus mainly on the control of short-term rentals and housing protection. For example, the amendment to the Bauordnung für Wien, effective from 1 July 2024, introduces stricter limits on commercial rentals of apartments through platforms such as Airbnb, which can be rented out for a maximum of 90 days per year without a special permit. Coliving-type projects may therefore face regulatory hurdles in Vienna if they are conceived as short-term or commercial accommodation.

In the broader European context (e.g. in Germany, Austria, see above, or Denmark), coliving is usually subsumed under the existing institutions of rent and accommodation without being explicitly defined as a separate legal concept. In terms of the tax regime, these countries – similarly to the Czech Republic – base their tax treatment on the EU distinction between exempt rental property and taxable accommodation services, with specific projects being assessed according to their predominant economic and functional nature.

It is clear from the above comparison that while London has approached coliving as a special institute on the borderline between housing and services with clearly defined parameters, Vienna leaves coliving without special legal regulation and is therefore similar to the Czech Republic and Prague. For the Czech environment this may be an impulse to consider whether coliving, including its tax regime, should be explicitly defined (following the London approach) so that investors have greater legal certainty when structuring coliving projects.

Is coliving feasible in the current Czech legal environment?

The current Czech legal order does not explicitly work with the concept of coliving and does not provide a framework definition of it. However, this does not mean that it is not possible to anchor it in fact and law.

It is essential to determine whether the coliving constitutes a dwelling (rent or sublet) or a service (accommodation). Each of these schemes brings a different degree of legal protection for the user of the property and different tax consequences. Projects aimed at meeting long-term housing needs will be closer to renting, while short-term ones are more likely to fulfil the characteristics of accommodation.

Until the coliving is explicitly anchored in law, it is nevertheless now possible to implement it in practice. However, when several legal institutes are applied, it will always be necessary to assess which of them the coliving will fall under, given its nature. This also corresponds to the requirement for a precise contractual setting, especially as regards the description of the actual purpose of the use of the property.

About the authors

Greats Advocates – comprehensive legal service for architects. Support in participation in design competitions, public procurement procedures, negotiations with public procurers and private investors, drafting, reviewing and revising work contracts, subcontracts, licensing agreements for the use of copyright works, ensuring requirements for the sustainability of projects, etc.

Sources used

[1] With reference to the decision-making practice of the courts – II. ÚS 544/2000; NS 26 Cdo 3623/2019.

[2] Supreme Court 26 Cdo 2128/2023

[3] Constitutional Court, II. ÚS 544/2000

[4] Information of the GFD on the tax assessment of the obligations of accommodation service providers with effect from 1 January 2023 No. 10352/23/7100-30118-012884