Changes to property tax in Poland from 1 January 2025

On 27th of November 2024, the President of Poland signed an amendment to the Act on Local Taxes and Charges, as well as other tax-related legislation. The new regulations, which will come into effect as on 1st of January 2025, aim to improve transparency, simplify procedures, and clarify key definitions to property taxation in Poland.

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New definitions: building and structure

The most significant element of the amendment is the introduction of new, independent definitions for “building” and “structure,” which are no longer linked to the Construction Law. Previously, the regulations referred to the norms of the construction law, causing inconsistencies and difficulties in interpretation.

A building is defined as an object that meets the following criteria:

• It was constructed as part of building works,
• It is permanently attached to the ground,
• It has foundations and a roof,
• It is separated from the surrounding space using building partitions,
• It has installed devices and systems allowing it to be used as to its’ purpose.

However, objects intended for storing materials (such as bulk, solid, liquid, or gaseous substances), where the defining technical parameter is capacity, are excluded from the building definition.

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Definition of a structure

A structure is any object that is not a building having been constructed as part of building works. The term “structure” also includes objects not explicitly mentioned in the Act, provided their construction elements meet specified criteria. The following are considered structures:

1. Objects listed in Annex 4 of the Act, along with installations enabling their intended use,
2. Power plants and energy installations such as:
• wind, nuclear and photovoltaic power plants,
• agricultural biogas plants,
• energy storage facilities, boilers, industrial furnaces, cableways, ski lifts, ski jumps – only as far as the construction parts of these facilities are concerned.
3. Construction installations, such as connections, installations for sewage treatment or storage, and other technical equipment directly related to buildings or structures, necessary for their operation,
4. Technical equipment not listed in the previous points, but only concerning their construction elements,
5. Foundations for machines and technical equipment that are independent elements of a utility installation.

The new definition of a structure eliminates previous interpretative uncertainties and ensures clarity of the rules, particularly regarding technical and infrastructure objects.

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Clarification of the definition of permanent attachment to the ground

The amendment clarifies what “permanently attached to the ground” means. An object is considered permanently attached if:

• It has structural stability in its’ construction,
• It is resistant to external forces such as wind or earthquakes.

As a result, containers that can be easily moved will no longer automatically be classified as structures.

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New property taxation rules

The changes to property tax regulations introduce clear rules for classifying objects for tax purposes. Special attention is given to complex objects, such as stadiums, water or sewage treatment plants, which consist of various building and infrastructure elements.

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Complex objects – new classification

Elements taxed as structures:
For complex economic objects, individual elements listed in Annex 4 of the Act will be taxed as structures.

Objects taxed as buildings:
Elements of complex objects that meet the building definition, such as buildings at sewage treatment plants or main buildings at stadiums, will be classified as buildings and taxed based on their surface area.

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Examples of object classifications:

• Structures: shelters, parking areas, roads, pedestrian paths, and container objects permanently attached to the ground.
• Buildings: objects separated by partitions, with foundations and roofs, such as buildings at water treatment plants.

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Rules for object qualification

The amendment retains the principle that an object is first classified as a building if it meets the building definition. Only if the object does not meet the building criteria can it be considered as a structure. The Act explicitly excludes the possibility that the same object can be both a building and a structure.

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Building works as a key determining factor

The key factor in determining classification is the “construction” of the object through building works. Building works are defined as activities involving construction, reconstruction, expansion, enlargement, redevelopment, or installation in accordance with the Construction Law. This clarification ensures that only objects resulting from such works are subject to taxation.

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Taxation of garages

All garages in residential buildings that are not used for business activities will be taxed at a uniform, lower property tax rate.

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Deadlines and reliefs for entrepreneurs

The amended regulations introduce favourable deadlines for taxpayers:

• The property tax declaration for 2025 may be submitted by 31st of March 2025, instead of the previous deadline of 31st of January.
• To benefit from the extended deadline, entrepreneurs must notify the tax authority by the end of January 2025.

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Exemptions from tax

The amendment introduces tax exemptions for certain objects that will not be classified as buildings or structures for property tax purposes. These exemptions include:

1. Mining excavations – the excavations themselves will not be subject to taxation, although structures located within their territory will still be taxed,
2. Small architectural objects, such as:
• Religious objects, e.g., chapels, roadside crosses, statues,
• Garden architecture elements, e.g., sculptures, fountains, bridges, pergolas, brick barbecues, or water ponds,
• Utility objects, e.g., trash bins, shelters for prams and bicycles, and playground elements for children.

These changes address previous interpretative uncertainties regarding the taxation of such objects. Exempting them from taxation will maintain the current non-taxation status quo for these cases.

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Why are these changes important?

The changes to property tax are the direct response to a ruling by the Constitutional Tribunal in July 2023, which highlighted the need for clear and unambiguous tax regulations. The amendment removes uncertainties, facilitates object classification, and protects taxpayers from excessive fiscal burdens.

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Summary

The changes to property tax in Poland, effective from 1 January 2025, introduce clear definitions for buildings and structures, eliminating previous interpretative uncertainties. A building is defined as an object permanently attached to the ground, with foundations and a roof, while a structure includes amongst others infrastructure listed in Annex 4 of the Act.

The amendment simplifies the classification of objects, especially complex ones such as stadiums and sewage treatment plants, and retains exemptions for mining excavations and small architectural objects. Entrepreneurs will benefit from the extended deadline for submitting property tax declarations until 31st of March 2025.

The reform aims to increase regulatory transparency, simplify procedures, and protect taxpayers from excessive fiscal burdens. It is advisable to start preparing for these changes already now.

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If you have any further questions or require additional information, please contact your business relationship person or use the enquiry form on the HLB Poland website.

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