Changes to real estate tax (RET)

A bill amending the Agricultural Tax Act, the Local Taxes and Fees Act, the Forest Tax Act and the Stamp Duty Act

On 11 June, information about a bill amending the Agricultural Tax Act, the Local Taxes and Fees Act, the Forest Tax Act and the Stamp Duty Act was included in the list of legislative and program work of the Council of Ministers. The bill is intended to eliminate interpretative ambiguities regarding the terms of ‘structure’ and ‘building’ in the context of the real estate tax. Currently, the definitions of the two terms to be used for tax purposes are those presented in the Building Law.

The planned changes follow from two judgments passed by the Constitutional Court: a judgment of 4 July 2023 (file SK 14/21) in which the Court held that the definition of ‘structure’ was inconsistent with the Constitution, and a judgment of 18 October 2023 (file SK 23/19) contesting the taxation of parking spaces in residential buildings.

Major changes

  • adding autonomous definitions of the terms ‘structure’ and ‘building’ to the Local Taxes and Fees Act of 12 January 1991 – with the categories of buildings constituting structures to be listed in an annex to the Act;
  • the Ministry of Finance strives to preserve the fiscal status quo as far as possible.
  • changing the rules for taxation of individual multi-space garages located in residential buildings;
  • exclusion of the property tax exemption with respect to rail infrastructure consisting of land, buildings and structures that are part of a freight terminal until the notification process is completed by the European Commission;
  • exemption of buildings and structures from the real estate tax in some public-use airports and, as regards land, only that part of land which is occupied by such buildings and structures – i.e. restoring this provision to the wording that was in force before the amendment of 1 January 2022.

What does it mean for taxpayers?

  • Taxpayers need to keep a close eye on the proposed changes. Depending on the taxpayers’ individual situations, their RET burden may be affected either positively or negatively.
  • The Ministry of Finance has informed that the changes will eliminate the current ambiguities concerning the legal and tax classification of certain facilities (such as silos, tanks or elevators) and provide more precise rules for taxing certain complex facilities (e.g. petrol stations) and heterogeneous ones (e.g. stadiums).
  • In our view, a comprehensive review of RET accounts is recommended to comply with the new regulations. This applies in particular to the classification of building facilities as either structures or buildings.

According to the list of legislative work, the bill is to be adopted in the third quarter of 2024.

If you have any questions or concerns regarding the legal and tax implications of the planned changes, you are welcome to contact our RET team.

Source: Bill amending the Agricultural Tax Act, the Local Taxes and Fees Act, the Forest Tax Act and the Stamp Duty Act, Bill amending the Agricultural Tax Act, the Local Taxes and Fees Act, the Forest Tax Act and the Stamp Duty Act – Office of the Prime Minister – Gov.pl portal (www.gov.pl)

 

KONTAKT

Elżbieta Lis Partner, Katowice

E: elzbieta.lis@pl.Andersen.com
T: +48 32 731 68 58
M: +48 664 948 038

Szymon Chyra Manager | Tax advisor, Katowice

E: szymon.chyra@pl.Andersen.com
T: +48 32 731 68 50

Wojciech Koczara Partner, Warsaw

E: wojciech.koczara@pl.Andersen.com
T: +48 22 690 08 88
M: +48 605 109 713

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