Polish Tax

Polish Property Tax

Non-residents are taxed in Poland on income arising from Polish sources only. You are considered tax resident in Poland if you spend at least 183 days there per year or if your main resident home is located in Poland.

You will also be obliged to file a tax return detailing your worldwide income in your home (tax resident) country. Where a double taxation agreement exists between Poland and your home country, which provides for double taxation relief, then a deduction for tax paid in the foreign country can be offset against tax on the same income in your home country. A double taxation agreement exists between Poland and Ireland / UK.

Tax on purchase:
Polish Transfer Tax: Stamp duty is charged @ 2% of market value and applies to second hand properties. It is payable to the Treasury Office. New properties are subject to VAT instead.

Polish VAT on buildings is charged by registered companies @ the standard vat rate of 23% (from 2011). The lower vat rate is 8%. The increase to the standrad rate of VAT from 2008 relates only to houses over 300sqm and apartments over 150sqm. For second-hand houses and land, a property becomes second hand 5 years after being built. Second- hand properties are exempt from VAT. There is only one exemption to this rule: if the seller is VAT registered, owns a second hand property and invests over 30% of the property value in order to improve the property, then 23% VAT is charged.

Ongoing property taxes:

Polish Income Tax: Private individuals must declare rent collected as income and pay income tax on profits after costs at progressive rates between 18% - 32%. Alternatively they may opt for a flat rate of tax on gross income before costs at 8.5% for gross income up to €4,000 or 20% for gross income over €4,000. Local Property tax are charged annally but payable quarterly. Rates vary by region & type of property and are set by each Local Municipality. Maximum annual rates on real estate for 2011 are:

–	PLN 0.77 per m2 for land used by businesses;
–	PLN 0.39 per m2 for other land;
–	PLN 0.65 per m2 for dwellings;
–	PLN 20.51 per m2 for buildings used by businesses;
–	PLN 6.88 per m2 for other buildings; and
–	2% of the value of fixed installations.

Transfer Taxes:
Polish Capital Gains Tax is charged on sale of property at 10% of the earned gain after costs (old CGT rules apply if the property purchased prior to 1 Jan 2007). Private individuals pay no tax if they have held the property for over five years or if they re-invest into another property within two years of sale.

Polish Inheritance Tax is charged on Polish property bequests. Rates vary depending on the relationship between the donor and beneficiary and range from 3% - 20% of inherited value after tax free deductions.

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