Poland’s taxation system for real estate includes three main aspects: taxes on purchase, ownership, and sale. Here’s a detailed overview of each category:
Taxes on Real Estate Purchase
1. Tax on Civil Law Transactions (PCC):
– Rate: 2% of the property value.
– Applies to properties purchased on the secondary market.
– The buyer must pay this tax within 14 days of signing the purchase agreement.
2. Value-Added Tax (VAT):
– Applies only to properties purchased on the primary market.
– Rate: 8% (for apartments up to 150 m²) or 23% (for larger areas or commercial properties).
– Typically included in the purchase price.
3. Notary Fees:
– The buyer covers the notarial fees, which depend on the property’s value. The maximum fee is around 10,000 PLN.
4. Land Register Registration Fee:
– The cost of registering the property in the land register is approximately 200 PLN.
Taxes on Real Estate Ownership
1. Property Tax (Podatek od nieruchomości):
– An annual tax paid to local authorities.
– The rate depends on:
– The size of the property (in m²).
– The type of property (residential, commercial, agricultural).
– Example rates:
– For residential properties — up to 1 PLN per m².
– For commercial properties — up to 28 PLN per m².
2. Perpetual Usufruct Fee (Opłata z tytułu użytkowania wieczystego):
– If the land is owned by the state or municipality, property owners may pay an annual lease fee (usually 0.3–3% of the land’s value).
3. Rental Income Tax (PIT):
– If you rent out the property, you must pay income tax:
– 8.5% on rental income up to 100,000 PLN per year.
– 12.5% on amounts exceeding 100,000 PLN.
– Alternatively, you can opt for the standard tax system with rates of 12% or 32% based on total income.
Taxes on Real Estate Sale
1. Capital Gains Tax (PIT):
– Applies if the property is sold within 5 years of its purchase.
– Tax rate: 19% on the profit (the difference between the purchase price and sale price).
– The tax can be reduced if the sale proceeds are reinvested in purchasing another property or improving housing (within 3 years).
2. Exemptions:
– No capital gains tax is due if the property has been owned for more than 5 years.
Key Costs
– When purchasing:
– On the secondary market: PCC (2%), notary fees, and registration fees.
– On the primary market: VAT (8% or 23%) and notary fees.
– When owning:
– Annual property tax.
– Possible land lease fees or rental income tax if rented out.
– When selling:
– Capital gains tax (19%) if owned for less than 5 years.
