Property Taxes in Poland

Real estate transactions in Poland are regulated by strict tax rules that apply to both residents and foreign citizens. Taxable objects include not only buildings and their parts but also land plots. This means that the purchase of residential property, commercial premises, or even an empty land plot will involve the payment of taxes and fees.

Our article will help you understand Poland’s taxation system, the nuances of tax rates, payment deadlines, and available benefits.

Real Estate Tax Rates in Poland

Poland’s tax system is designed to account for the diversity of real estate transactions. For example, there are separate taxes for rental, sale, and the transfer of ownership through inheritance or donation. Furthermore, tax rates may vary depending on the type of property and the region in which it is located.

Poland’s taxes for foreigners do not differ from those for residents and local citizens. Therefore, regardless of citizenship, foreigners are also required to pay the full range of applicable taxes, including those related to real estate.

The property tax in Poland is reviewed annually, and its maximum rates are set by the Ministry of Finance. However, the specific tax amounts are determined by local authorities (gminas) and may vary depending on the region.

Tax Rates for real estate in 2024:

In 2024, taxes in Poland increased by 15% compared to 2023. The main reason for this rise is the country’s inflation growth, as taxes are adjusted based on its rate. Inflation is also projected to rise in 2025, and tax rates are expected to increase by 2.7% compared to 2024.

Projected tax rate in Poland for 2025:

It is important to note that the actual and projected inflation levels often differ in practice, with the actual rate typically being higher. Accordingly, the projected 2.7% tax increase may only serve as a starting point for further rate hikes throughout the year. Moreover, local authorities have the right to set tax rates below the maximum limits, so the actual amounts may vary depending on the specific gmina.

Taxes on Buying Real Estate in Poland

There are two main taxes when purchasing real estate in Poland. VAT is charged only if the purchase involves buying property directly from the developer, i.e., on the primary market. The standard VAT rate is 23%; however, a reduced rate of 8% applies to residential properties with an area of up to 150 m² (apartment) or up to 300 m² (house).

In other cases, the tax on civil-law transactions (PCC) applies. This tax is calculated and collected by the notary handling the purchase agreement and amounts to 2% of the property’s market value. However, as of January 1, 2024, a PCC rate of 6% has been introduced for those acquiring a sixth and subsequent residential unit in the same building or residential complex.

Additional costs when purchasing real estate:

• Notary services. The cost of notary services depends on the transaction amount and is regulated by law. The maximum notary fee is determined by the Regulation of the Minister of Justice and can reach up to 10,000 PLN. In cases of real estate transactions under preferential conditions (e.g., social housing, purchases under government programs, or for special categories of citizens such as young families), the maximum fee is capped at 7500 PLN.
• Real estate agency commission. Taxation in Poland for individuals is supplemented by an agency commission if the buyer processes the transaction through an agency. The commission usually amounts to up to 3% of the property value.
• Additional PCC tax for mortgage loans. When obtaining a mortgage loan to purchase real estate, an additional PCC tax is charged at 0.01% of the loan amount or a fixed amount of 19 PLN.

Exemption from PCC tax can be granted to individuals purchasing their first home on the secondary market. It is important that the buyer has never previously owned property, either in Poland or abroad. The exemption does not apply to commercial real estate, land plots, or luxury housing.

Main types of tax relief:

• Preferential conditions for young people (program «Mieszkanie bez wkładu własnego»). This is a government support program that applies only to first-time home purchases and does not cover luxury or secondary market properties. Additionally, the buyer must meet age requirements (typically up to 35 years old).
• Tax relief for families with children. Families with multiple children are eligible for a reduced VAT rate if they need to expand their living space.

Notary Services

A notary plays a key role in the process of real estate purchase transactions in Poland. Their involvement is mandatory, as without a notarized sale and purchase agreement, the transaction will be considered invalid. This is because the notarial deed serves as the legal basis for making changes in the land register.

Functions of a notary in real estate purchases:

• Preparation of the Notarial Deed (Akt notarialny). The notary drafts and certifies the sale and purchase agreement in the form of a notarial deed, which serves as the legal basis for recording changes in the land register (Księga Wieczysta).
• Verification of ownership rights. The notary verifies information about the property in the land register, including the current owner and any encumbrances related to the property (e.g., mortgages, property seizures, fines).
• Legal consultation. The notary explains the rights and obligations of both parties, providing information on taxes and fees associated with the property purchase (e.g., PCC, VAT). Their responsibilities also include discussing the implications of the transaction, such as tax obligations and its legal processing.
• Confirmation of payment. If payment occurs in the presence of the notary, they confirm the transfer of funds between the buyer and the seller.
• Submitting changes to the Land Register. After signing the agreement, the notary files an application with the court to update the land register, confirming the change of ownership.
• Drafting additional agreements. If necessary, the notary can prepare additional agreements between the parties, such as a property handover protocol or agreements on payment of additional costs.

The cost of notary services depends on the value of the property. The maximum fee (excluding VAT) for 2024 is as follows:

• 100 PLN for properties valued up to 3000 PLN.
• 1010 PLN + 0.4% of the amount exceeding 60,000 PLN for properties valued up to 1 million PLN.
• 4770 PLN + 0.25% of the amount exceeding 1 million PLN for properties valued up to 2 million PLN.
• The maximum fee is 10,000 PLN.

The notary is not responsible for the economic aspects of the transaction, such as whether the price of the property is inflated. They are only responsible for the legal validity of the transaction, not for the accuracy of the information provided by the parties. This means that verifying the technical condition of the property is the responsibility of the buyer.

Income Taxes on Selling Property

Personal Income Tax (PIT) in Poland also applies to income from property sales at a rate of 19% on the difference between the purchase price and the selling price. However, if the property was purchased or built and sold after a period of 5 years (counting from the end of the calendar year in which it was acquired or constructed), the tax is not applied. For example, if the property was purchased in May 2019, its sale after December 31, 2024, will be exempt from tax.

Additionally, exemption of income tax in Poland is possible if the owner uses the proceeds from the sale for their own housing purposes within 3 years of the sale date. Such purposes include purchasing new housing, constructing or renovating one’s own property, or repaying a loan taken for housing purposes. It is essential to document these expenses and submit the corresponding declaration to the tax authority.

A personal income tax in Poland can be refunded by submitting an annual tax declaration, usually between February 15 and April 30 of the year following the reporting period. For example, the declaration for 2023 must be submitted by April 30, 2024. The tax authorities are then obligated to return any overpaid tax within 45 days if the PIT declaration Poland is submitted electronically and within 90 days if filed in paper form. However, in practice, refunds are often processed faster.

Conditions to refund PIT tax in Poland:

In Poland, employers deduct tax from salaries monthly as advance payments. These amounts are calculated based on projected annual income. However, at the end of the year, it may turn out that:

• The income was lower than expected.
• Tax reliefs and deductions reduce the tax burden.
• The Poland tax rate was applied incorrectly (e.g., the employer withheld tax at a higher rate).

As a result, the actual tax amount for the year may be less than the amount withheld. This creates an overpayment and provides grounds for a PIT refund in Poland.

The government has introduced favorable tax deductions in Poland for the following categories:

• Child allowance (ulga na dzieci).
• Internet expenses (ulga internetowa).
• Charitable donations.
• Deductions for investments in education or pension funds.

If an applicant qualifies for any of these deductions but did not claim them during the year, the tax will be recalculated when submitting the annual declaration. The result of the recalculation is the excess amount withheld, which will be refunded to the applicant.

Inheritance Tax in Poland

In Poland, acquiring real estate through inheritance or as a gift is subject to the inheritance and gift tax (Podatek od spadków i darowizn). The tax amount and the possibility of exemption depend on the degree of relationship between the donor and the recipient, as well as the value of the acquired property. Recipients are divided into three tax groups based on their degree of kinship with the donor or the testator:

• First group. Spouses, parents, children, grandchildren, great-grandchildren, siblings, sons-in-law, daughters-in-law, father-in-law, mother-in-law, stepfather, stepmother, and stepparents.
• Second group. Uncles, aunts, nephews, nieces, cousins, children of sons-in-law and daughters-in-law, spouses of siblings, and spouses of a spouse’s siblings.
• Third group. All other individuals are not included in the first two groups.

Within the first group, there is the so-called zero group, which includes the closest relatives, such as spouses, parents, children, grandchildren, great-grandchildren, siblings, stepfather, and stepmother. For them, a full exemption from the tax is provided, but only if the SD-Z2 declaration is submitted to the tax authority within 6 months of receiving the inheritance or gift. If the gift is executed in notarial form, the notary is required to notify the tax authorities, and the submission of the SD-Z2 declaration is not required.

For each group, there are tax-free thresholds:

• First group — up to 36,120 PLN.
• Second group — up to 27,090 PLN.
• Third group — up to 5733 PLN.

Taxation in Poland is applied progressively if the value of the received property exceeds the group-specific thresholds:

• First Group:
  • Up to 11,833 PLN — 3%.
  • 11,833–23,665 PLN — 355 PLN + 5% of the amount exceeding 11,833 PLN.
  • Over 23,665 PLN — 946.60 PLN + 7% of the amount exceeding 23,665 PLN.
• Second Group:
  • Up to 11,833 PLN — 7%.
  • 11,833–23,665 PLN — 828.40 PLN + 9% of the amount exceeding 11,833 PLN.
  • Over 23,665 PLN — 1893.30 PLN + 12% of the amount exceeding 23,665 PLN.
• Third Group:
  • Up to 11,833 PLN — 12%.
  • 11,833–23,665 PLN — 1420 PLN + 16% of the amount exceeding 11,833 PLN.
  • Over 23,665 PLN — 3313.20 PLN + 20% of the amount exceeding 23,665 PLN.

The taxpayer of inheritance tax in Poland must submit the SD-3 declaration to the tax office within the first month of receiving the property. After that, the tax must be paid no later than 14 days from the date of receiving the tax authority’s decision on the tax amount.

Rental Income Taxes

Income from renting out real estate is subject to the flat tax on registered income (ryczałt od przychodów ewidencjonowanych). The tax rate in Poland is 8.5% for income up to 100,000 PLN per year and 12.5% for amounts exceeding this threshold. The tax is calculated based on total income without deducting any expenses incurred to generate it.

For this tax, the PIT-28 declaration must be submitted between February 15 and April 30 of the year following the reporting period. If the declaration is submitted before February 15, the submission date is considered to be February 15.
For sole proprietors (self-employed individuals) renting out real estate as part of their business activity:
Forms of taxation:

• The tax rate is 17% for income up to 120,000 PLN per year and 32% for income exceeding this threshold. Submission of the PIT-36 declaration is mandatory.
• Flat Tax (podatek liniowy). The tax rate does not depend on the income amount and is set at 19%, regardless of the income level. Submission of the PIT-36L declaration is mandatory.

The choice of taxation method must be declared to the tax office before the start of the tax year.

Deadlines of Property Tax Payments

Taxes in Poland for individuals become an obligation after submitting a real estate tax declaration to the local tax authority (Urząd Gminy or Urząd Miasta). The declaration must be submitted within 14 days from the date the tax obligation arises. Payment of the tax is made in four equal installments by March 15, May 15, September 15, and November 15. If the tax amount does not exceed 100 PLN, it must be paid in full by March 15.

Legal entities are required to submit a real estate tax declaration by January 31 for the current tax year or within 14 days from the date the tax obligation arises. The tax must be paid monthly by the 15th of each month, except for January, where payment is due by January 31.

Who is Exempt from Property Taxes

The real estate tax (Podatek od nieruchomości) must be paid by owners of all real estate properties. However, the government provides certain exemptions and reliefs for this tax.

Commonly, exemptions from poland property tax apply to users of allotment gardens (ROD), provided the area of the garden cottage on the plot does not exceed 35 m². Additionally, organizations engaged in public-benefit activities are exempt if they use the property directly for their statutory activities.

Other cases of tax exemption:

• Properties used for religious activities: buildings and structures used for worship or other religious purposes.
• Cultural heritage properties: real estate recognized as a cultural monument and used in accordance with this status.
• Educational institutions: state schools, universities, and other educational establishments.
• Agricultural properties: the law provides for exemptions on real estate tax in Poland for farm buildings or their parts if they are used for forestry, fishing activities, or are located on agricultural land.

There are no direct provisions for tax exemptions or reliefs for people with disabilities in general regulations. However, local authorities (gminas) have the right to establish their own rules for exemptions and tax reliefs, including for individuals with disabilities. They also have the authority to differentiate tax rules for non-residents and local residents in Poland. Therefore, it is recommended to contact the relevant local authorities for up-to-date information regarding available exemptions and reliefs.