The tax year in Poland is the calendar year ending on December 31st.
Poland has a Double-Taxation Treaty with many countries, including the UK. This means that a property investor or homebuyer should not be subjected to duplicate taxes, or paying tax twice. Taxes due in Poland are offset against domestic taxes, where such an agreement is in place.
Poland property transaction taxes - for the purchase
Value Added Tax for property investors
In most cases, Value Added Tax is payable at a rate of 23%.
There are reduced rates of VAT for certain products and services. 8% VAT is levied on new-build properties, 2% tax for re-sale, secondary market properties
Stamp Duty
Is applicable for some activities such as issuing certificates or for Power of Attorney services. It is levied at 0.5%
Capital Gains tax on Polish properties
In general, there is no special tax rate for capital gains in Poland. Capital gains are usually added to the regular income of an individual/company and based on the normal tax rates.
Despite this, if property in Poland (or real estate) is sold more than 5 years after it was purchased the capital gain is exempt from tax.
Poland Property - Inheritance tax
Inheritance and gift tax are governed by the law dated 28 July 1983, modified by later amendments. Tax becomes payable upon the transfer of gift, or inheritance of wealth, situated in Poland. The rate is similar to the lower rate of income tax, where relevant.
If the transfer takes place in Poland, but neither the transferor nor the transferee is a Polish citizen or resident of Poland, then the transfer is not taxable.
Poland Property taxes ongoing for the property investor
Income tax for investors in Polish properties
Poland's taxation of an individual's income is progressive. That means, the higher the income, the higher the rate of tax applicable. The tax rate for an individual is between 18% - 32%.
Individuals have the choice of paying a progressive taxation, which is applied to income minus expenses or a lump sum method, which is levied at a lower tax rate, but applied to the income. This is relevant for rental income and those letting out property.
The tax for an individual who meets the criteria of a "permanent resident" in Poland will be calculated on his or her income in Poland and abroad. A foreign resident, who receives income in Poland, pays tax only on his income earned in Poland.
To be considered a Polish resident, the permanent place of residence in Poland is the main criterion (resident for more than 183 days).
Property in Poland - Local taxes
Local property taxes: 1.5% of nominal property value – might change to a % of property market value shortly.
Please note: this page is provided as guidance only to home buyers in layman's terms
For moreof a profile of Poland, take a look at a snapshot profile of Poland
To give you more background as to why you might consider investing in Poland, go to the Poland property-Why Invest section, or maybe look at the individual towns and cities profiled in each country'sPoland Towns and cities like Krakow, Warsaw section. Or simply take a look at thePolish Properties
To see what property is available in Poland, click here on Poland Property. If you cannot find what you like, please contact us on +44 (0)1932 849536, as we have lots more properties than are shown on the website.
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I am an expert in international taxation, particularly focusing on property transactions and investments in Poland. With a wealth of experience and a deep understanding of the intricacies of Poland's tax system, I aim to provide valuable insights into the tax landscape for property investors and homebuyers.
Firstly, it's crucial to highlight the Double Taxation Treaty between Poland and many countries, including the UK. This treaty ensures that individuals engaging in property transactions are not subjected to duplicate taxes, offering relief and preventing the payment of taxes in both jurisdictions.
Let's delve into the key concepts outlined in the provided article:
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Poland's Tax Year:
- The tax year in Poland aligns with the calendar year, ending on December 31st.
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Property Transaction Taxes in Poland:
- Value Added Tax (VAT):
- The standard VAT rate for property transactions is 23%.
- Reduced rates apply, with 8% for new-build properties and 2% for re-sale or secondary market properties.
- Stamp Duty:
- Applicable for certain activities, such as issuing certificates or Power of Attorney services, levied at 0.5%.
- Value Added Tax (VAT):
-
Capital Gains Tax:
- No special tax rate for capital gains in Poland.
- Capital gains are typically added to an individual or company's regular income, subject to normal tax rates.
- An exemption is granted if the property is sold more than 5 years after its purchase.
-
Inheritance Tax in Poland:
- Governed by the law dated July 28, 1983, with tax becoming payable upon the transfer of gifts or inheritance of wealth in Poland.
- Rates are similar to the lower rate of income tax.
- Transfers in Poland involving non-Polish citizens or residents are not taxable.
-
Income Tax for Investors:
- Progressive taxation for individuals with rates ranging from 18% to 32%.
- Choice between progressive taxation (applied to income minus expenses) and lump sum method (levied at a lower tax rate).
- Tax calculated on worldwide income for permanent residents, while foreign residents pay tax only on income earned in Poland.
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Local Property Taxes:
- Local property taxes amount to 1.5% of the nominal property value, with a potential change to a percentage of the property market value.
This comprehensive understanding of Poland's tax framework is crucial for property investors and buyers to make informed decisions. It's important to note that tax regulations can evolve, and seeking professional advice is advisable to navigate the complexities of international property transactions.
If you have further questions or need specific guidance on investing in Poland, feel free to ask.
