Property tax. Deputy minister announces “big change”

On Wednesday, the plenary session of the Sejm held the first reading of the government's draft amendments to the acts on agricultural tax, on local taxes and fees and on stamp duty prepared by Ministry of Finance. The project was subject to extensive consultations, and this is its third version.

The amendment, which is to enter into force on January 1, 2025, was referred to the Public Finance Committee for further work on Wednesday.

The purpose of the regulations is to clarify the applicable provisions and eliminate interpretation doubts. As Deputy Minister of Finance Jarosław Neneman said when presenting the project, the existing regulations were unclear and did not match reality. He added that a significant number of cases in the Supreme Administrative Court concerned real estate tax.

Neneman explained that the ministry has decided to “maintain the legal status quo” on tax rules, meaning that something that has been taxed until now will continue to be taxed, and what has not been taxed will not be, except in silos. The deputy minister assured that the money from local taxes will go to local governments for local needs, i.e. for the inhabitants of a given commune.

As he said, the proposed act changes the method of taxation. For example, in the case of garages, the same garage, depending on its legal status, could have different taxes, which should not be the case.

– The rate will be adjusted downwards. We estimate that on a national scale this will be a loss of approximately PLN 170 million, announced the deputy minister. He added that, according to the ministry's estimates, in other cases the financial consequences of the changes will be “zero”.

He added that to ensure a smooth entry into the system, the Ministry of Finance proposes to extend the deadline for submitting property tax declarations for 2025 by entrepreneurs until March 31, so that they have time to adapt to the changes.

MP Janusz Kowalski (PiS), addressing the minister, said: – You promised in the coalition agreement that the vacatio legis period in the tax laws will be at least 6 months, and we have to adopt it in a few weeks.

– This rule has been broken, so as Law and Justice We will submit a request for a public hearing, he announced.

Kowalski noted that PiS wants to submit 18 substantive amendments and even “a draft bill that obliges the Minister of Finance to create a central database of tax interpretations in the field of real estate tax.”

Other clubs, apart from Confederation, assessed the government project favorably, noting that it improves the existing tax regulations. Meanwhile, MP Witold Tumanowicz (Confederation) argued that it introduces new interpretation problems.

According to the justification, “the project envisages the introduction of new definitions of the terms: “structure” and “building” – for the purposes of real estate taxation, clarification of the principles of real estate taxation of garages in residential buildings, clarification of the scope of real estate tax exemption for port infrastructure structures, changing the scope of exemption from real estate tax on railway infrastructure facilities, changing the rules for using subjective exemptions in agricultural tax, as well as a change adapting to the currently applicable EU regulations on the rules for applying reliefs for investments in agricultural farms, the conditions of which must be met by Polish regulations regarding application of investment relief in agricultural tax.

Neneman, answering MPs' questions, informed that 600 comments had been submitted to the draft. He emphasized that this is a small amendment, a “first step”.

– Taxation of residential buildings, especially in large cities, requires fundamental changes. (…) This will be a big change, we have to wait for this change for a while, we will have to find a political consensus – said the deputy minister.