Higher property tax for entrepreneurs in Poland

According to the latest interpretation of the Ministry of Finance, entrepreneurs earning from renting apartments are to pay almost 29 times more property tax than people renting privately. This applies to persons who run a business activity involving renting apartments and settling rental profits within the company. It does not matter, as it was before, whether the premises are rented for housing purposes or not.

The new rate for business is PLN 28.78 per sq m. This is a high amount compared to the preferential rate for private landlords, who will pay PLN 1 for 1 sqm of usable space.

Verification of the tax due is the responsibility of city councils that issue such decisions.

The new regulations will affect all people who rent apartments as part of their business activity, and much higher taxes will have a negative impact on the profitability of investments. The effects of the new interpretation may also be felt by tenants, because it is quite possible that the higher costs will be fully or partially passed on to them.

The beginning of 2023 is a series of not very good news for people investing in apartments, not good because all the changes translate into higher costs. We already had a change in the method of taxation of rental income for individuals to a less favourable reduced rate, the introduction of an energy performance certificate, and now a new interpretation of the property  tax rules.

Unfortunately, it seems like this is not the end of the unfavourable changes in this sector. The government announced it will work on introducing restrictions on the property purchase or increasing the tax on the purchase of multi buyers.