Real estate

Higher property tax thanks to inflation

High inflation in Poland not only increases the prices of basic goods and services, but also causes a significant increase in property tax rates, which will be in effect from 2023. This is because, according to the provisions of the Law on Local Taxes and Fees, the upper limits of property tax rates are set by the Minister of Finance to the extent that they correspond to the consumer price index for the first six months of the year, compared to the same period of the previous year. Accordingly, property tax rates in Poland in 2023 have been set based on the price index in the first half of 2022 relative to the first half of 2021. According to the announcement of the President of the Central Statistical Office, the price increase in the indicated period was as high as 11.8%, which was reflected in the new property tax rates.

Property tax rates in 2023 r.

The maximum annual property tax rates in 2023 will be:

  1. Land:

PLN 1.16 on 1 sq. m. of land related to business activities,

PLN 5.79 per 1 hectare of land under standing surface waters or flowing surface waters of lakes and artificial reservoirs,

PLN 0.61 per sq. m. for other land, including land used for conducting paid statutory public benefit activities by public benefit organizations,

PLN 3.81 per 1 sq. m. of undeveloped land included in the revitalization area and located in areas for which the local zoning plan provides for residential, service or mixed-use development involving only these types of development, if 4 years have elapsed from the date of entry into force of this plan and construction has not been completed during this period in accordance with the provisions of the Construction Law.

  1. Buildings:

PLN 1.00 per sq. m. of floor area in residential buildings,

PLN 28.78 per sq. m. of usable floor area of buildings related to business activities and residential buildings or parts thereof used for business activities,

PLN 13.47 per sq. m. of usable floor area of buildings used for business activities in the field of marketing of certified seed,

PLN 5.87 per 1 m2 of usable floor area of buildings related to the provision of health care services within the meaning of the regulations on medical activity, taken over by entities providing such services,

PLN 9.71 per square meter of usable floor area of other buildings, including buildings used for paid statutory public benefit activity by public benefit organizations.

It is worth noting that the above rates are the maximum property tax rates for land and buildings effective in 2023. On the other hand, it is up to the municipal council to determine the specific amount of tax on real estate located in a given municipality. However, given the current financial problems of local governments, it can be expected that the vast majority of municipalities will decide to enact maximum or near-maximum rates.

Tax on structures

A separate category of the subject of real estate tax is structures, i.e., construction objects (other than buildings or objects of small architecture), as well as construction equipment, connected with the structure that ensures the possibility of using the structure in accordance with its purpose. Due to the great diversity of structures, the regulations provide for a uniform maximum tax rate of 2% of their initial value, which is the basis for calculating depreciation (with certain exceptions).In addition, only structures or their parts related to the conduct of business activities are subject to taxation.

Author team leader DKP Legal Marcin Kręglewski
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