Government plans tax on vacant residential real estate
11 April 2023
According to research institutions, the housing shortage in Poland is about 1.5 to 2 million apartments. At the same time, however, there are around 1.8 million vacant apartments, according to the CIS statistics office.
In order to resolve this imbalance and combat speculation on housing prices, the government announced at the turn of the year that it would impose higher taxes on the owners of apartments that have been vacant for a long time. While initially, there had been discussion of imposing a tax on individuals who buy seven or eight flats, Prime Minister Mateusz Morawiecki recently specified that the restrictions would, at first, focus only on large investment fund companies. According to the plan, the fund companies will pay a 6 percent PCC tax (PCC – tax on civil legal acts) on apartment purchases instead of the previous 2 percent. It is to apply to both the secondary market (existing properties) and the primary market (new construction). Anyone who purchases a property from a developer subject to VAT will then be charged an additional tax on top of the VAT (8 percent).
The intent is to limit the widespread process whereby fund companies buy large packages of apartments, slap their profit margins on them and then sell them at a higher price. By amending the Law on Local Taxes and Levies, the government intends to empower cities and municipalities to adopt higher real estate tax rates for housing locales that are not occupied for more than three months. Legal experts have doubts about the constitutionality of both measures planned by the government. Moreover, from a practical point of view, the question of “how to determine whether an apartment has been vacant for three months” arises.
Source: Wirtschafts-Markt Polen (03-2023 Issue 324)
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