Last updated: 25.02.2025
Overview of Polish Property Taxes
Polish property taxes play a key role in the tax system, affecting a wide range of real estate, including residential and commercial buildings, land, and other real property. These taxes are a significant source of tax revenue, helping to fund local infrastructure and public services.
The taxation system in Poland is complex, with various tax obligations depending on the type of property and transaction. Different tax regulations apply to property owners, investors, and businesses involved in the real estate market.
Understanding these rules is essential to ensure compliance and optimize tax liabilities, particularly for those navigating sale agreements, capital gains tax, or Value Added Tax (VAT) on property transactions.
What Is Real Estate Tax (RET) in Poland?
Real Estate Tax (RET) is a local tax imposed on the ownership of real estate, including land, buildings, and structures. Unlike corporate income tax or personal income tax, RET is not based on income earned but rather on property ownership.
Who Is Required to Pay Real Estate Tax?
RET liability applies to various legal persons and individual taxpayers who fall into one of the following categories:
- Owners of real estate.
- Freeholders with long-term property rights.
- Perpetual usufructuaries who hold land under usufruct agreements.
- Individuals or entities holding dependent rights to properties owned by the State Treasury or municipalities (e.g., tenants).
Since RET is a local tax, municipal executive bodies serve as the tax authorities, setting rates and overseeing compliance.
How Is Real Estate Tax (RET) Calculated in Poland?
Real Estate Tax (RET) applies separately to land and buildings, with the tax base determined by their size or value.
- For land, the taxable base is calculated based on its total area (measured in square meters).
- For buildings, the tax base is the usable area (measured in square meters).
- For structures, RET is based on their gross (initial) tax value, as recorded in the fixed assets register on January 1st of a given tax year.
What Are the Real Estate Tax Rates for 2025?
The maximum allowable RET rates are set by the RET Act – in respect of land/buildings associated with conducting business activity – but each municipality council determines the final rates applicable in its jurisdiction. The updated 2025 rates are:
- Land – 1.38 PLN/m².
- Residential buildings – 1.19 PLN/m².
- Buildings used for business activities – 34 PLN/m² (applies to entire commercial buildings or parts of residential buildings used for business purposes).
- Structures – 2% of their gross tax value (before depreciation write-offs).
Note: RET rates are reviewed annually, and increases are common. Property owners should check with local tax offices to confirm current rates.
What Are the Key Changes in Real Estate Tax (RET) from 2025?
Starting in 2025, new regulations will introduce revised definitions for key terms related to real estate taxation. The updated law clarifies:
- Building – The legal definition has been refined.
- Structure – Now defined without reference to the Construction Law.
- Permanent connection to the ground – A more precise classification of fixed property.
- Construction object – A broader term covering various real estate assets.
How Will the 2025 Changes Affect Property Tax Returns?
As an exception for 2025, taxpayers will have an extended deadline for filing their property tax returns. Instead of the standard due date, returns can be submitted up to March 31, 2025 – two months later than usual.
To benefit from this extension, taxpayers must notify the relevant tax authority in writing. Despite the extended filing period, tax installments must still be paid on time, following the standard statutory deadlines. The tax amount should be calculated based on the average tax installment from 2024 to ensure compliance.
FAQ – Real Estate Tax (RET) in Poland
Is Real Estate Tax (RET) applicable to both residential property and business premises?
Yes, Real Estate Tax (RET) applies to both residential property and business premises. However, tax rates differ – properties used for business purposes are taxed at a higher flat rate, while residential property is subject to a lower rate. Each municipality determines the final rate based on the fair market value and initial value of the taxable property.
Are there tax exemptions available under Poland property taxes?
Yes, certain tax exemptions apply under Poland property taxes. Some legal entities, such as public institutions, may qualify for exemptions. Additionally, under specific conditions, perpetual usufruct holders and natural persons who meet particular residency status criteria may benefit from tax relief.
How does Real Estate Tax (RET) relate to other property-related taxes, such as Value Added Tax (VAT)?
While Real Estate Tax (RET) applies to ownership, Value Added Tax (VAT) under the VAT Act applies to transactions, such as the sale agreement of real property on the secondary market. If the property is newly developed or sold by a legal entity, added tax may be applicable in addition to RET.
Is rental income subject to Real Estate Tax (RET) in Poland?
Yes, owning taxable property used for rental income does not exempt the owner from paying Real Estate Tax. However, rental income itself is subject to individual’s income tax or corporate income tax, depending on whether the owner is a natural person or a legal entity.
How is the tax liability determined for foreign investment in Polish real property?
Foreign investors acquiring real property in Poland must comply with tax in Poland regulations, including Real Estate Tax and civil law transactions tax. The tax obligation depends on the purchase price, market value, and whether the property is for private use or business activities. Many countries have double tax treaties with Poland to prevent double taxation on capital gains.
Are tax deductible costs allowed when calculating Real Estate Tax?
No, Real Estate Tax is based on the fixed tax rate and does not allow for tax deductible costs. However, certain business-related expenses associated with real property may be deductible for corporate income tax or individual income tax purposes.
Do Polish residents and non-residents have different Real Estate Tax obligations?
No, both Polish residents and non-residents must pay tax on taxable property in Poland. However, the residency status of an individual or legal personality of a company may impact other tax obligations, such as health insurance contributions or minimum tax requirements.
