Individuals, organizations and companies may invest in real estate in Poland directly or through a corporate vehicle.
Last modified 13 Mar 2025
In the case of an asset deal (ie the direct purchase of an interest in real estate by a corporate vehicle or individual), where the seller is not an entity carrying on a business, a 2% tax on civil law transactions (PCC) is due, based on the market value. This is normally the purchase price but can sometimes be assessed at a higher level by the tax authorities using an authorized expert's opinion. The obligation to pay PCC rests with the buyer. If the seller is an entity carrying on a business, value added tax (VAT) is usually payable. Generally, the standard rate of 23% applies. With respect to subsidized housing – a rate of 8% applies.
In principle, VAT charged by the seller can be recovered by the buyer as input VAT (if the purchaser is a VAT taxpayer carrying out transactions which are subject to VAT). If a sale is subject to VAT, PCC is not due. The sale of agricultural land is exempt from VAT (but in such cases 2% PCC is due).
Any sales of real property other than land are exempt from VAT if two years have lapsed since that property's first occupation. However, in some circumstances, the parties may opt for such a transaction to be subject to VAT. Other specific exemptions may apply.
If a sale is exempt from VAT, it is subject to tax on civil law transactions (PCC) at a rate of 2%.
In the case of a share deal (ie the purchase of shares in a corporate vehicle holding the real estate), PCC at 1%, calculated on the basis of the fair market value of the shares, is payable by the acquiring party. Similarly, if an interest in a partnership is purchased (ie a partnership holding the interest in the real estate), PCC at 1%, calculated on the basis of the market value of the interest, is payable.
In the event that the purchaser acquires from the same seller at least six residential premises constituting separate real estate in one or more buildings constructed on one land, taxed with VAT, or shares in such premises, or has already acquired at least five such premises or shares in them, the sixth and each subsequent such sale is subject to the PCC at a rate of 6%.
Last modified 13 Mar 2025
In the case of an asset deal (ie the direct purchase of an interest in real estate by a corporate vehicle or individual), value added tax (VAT) is payable if the seller is an entity carrying on a business and sells the interest in the real estate in the course of its business activities. VAT is payable to the tax office by the seller at the rate of 23%. The sale of agricultural land is exempt from VAT. Generally, the basis for calculating VAT is the net purchase price.
Any sales of real property are exempt from VAT if two years have lapsed since that property's first occupation. However, in some circumstances the parties may opt for such a transaction to be subject to VAT. Other specific exemptions may apply.
The buyer has the right to recover the VAT charged by the seller as input tax if the buyer is a VAT taxpayer carrying out transactions which are subject to VAT. Input VAT can be deducted by the buyer against its output VAT. Any surplus input VAT can be carried forward to subsequent months or the buyer may ask for a direct refund of the input VAT from the tax office (generally, the refund is made within 60 days.
Last modified 13 Mar 2025
In the case of an asset deal (ie the direct purchase of an interest in real estate by a corporate vehicle or individual), the purchase of real estate incurs the following costs:
Depending on the particular circumstances and the type of real estate, other costs may also be incurred (eg the cost of obtaining other documents required by the notary and the commission charged by the real estate agent).
In the case of a share deal (ie the purchase of shares in a corporate vehicle holding the real estate), costs include:
In the case of the purchase of an interest in a partnership, costs include:
Last modified 13 Mar 2025
Land, buildings and construction works associated with a business (eg roads, antenna towers or foundations for machinery), as well as their component parts, are as a rule subject to real estate tax. The basis for calculation of real estate tax is the surface area of the land or building. For construction used for business purposes, real estate tax is charged on their initial value determined for tax depreciation purposes in a given tax year. Generally speaking, expenditure incurred in relation to the creation or acquisition of a development is the measure of its initial value.
Real estate tax is a local tax and its exact amount is set by a resolution of the relevant Community Council (a local self-governing body). However, rates of real estate tax laid down in the Community Council's resolution may not exceed the following rates: for land connected with business activities – PLN 1.38 per square metre; for buildings and parts of buildings (where they are used for business purposes) – PLN 34.00 per square metre; for construction – 2% of their market value (the maximum rates are updated annually). Some types of real estate are exempt from this tax (for example, certain property connected with railways or airport infrastructure).
In some circumstances, real estate located in special economic zones may benefit from real estate tax-exemption.
Real estate tax is declared annually by corporations and paid to the relevant community on a monthly basis.
Individuals not carrying on a business activity pay real estate tax on the basis of on the competent authority' decision quarterly.
Special rules apply to agricultural land and forests.
Last modified 13 Mar 2025
In the case of perpetual usufruct of real estate (a long-term right over state or municipally-owned property), a fee must be paid to the State Treasury or relevant local government unit. When a perpetual usufruct is established, an initial fee of between 15% and 25% of the value of the real estate is payable. This fee is paid only once and should not be paid again by the new perpetual usufructuary if the right is transferred. For each year of perpetual usufruct an annual fee is payable. This is between 0.3% and 3% of the value of the real estate (the exact amount depends on the purpose of the usufruct).
Where real estate is owned outright additional costs or charges may arise in connection with the development of the land, re-building or changes in the use of the buildings (eg stamp duty for a building permit or occupancy permit – the amounts depend on the type and area of the building).
The Polish Parliament has adopted an act on the transformation of the right of perpetual usufruct of land built-up with residential buildings into right of ownership. Pursuant to this act, starting from 1 January 2019, the right of perpetual usufruct of this kind of land was transformed into right of ownership. In that case the perpetual usufruct fees is no longer payable with respect to this kind of land. However, the new owner is obliged to pay the former owner a premium which is related to the transformation of title to the property. This premium is to be paid periodically for a period of 20 years since the above mentioned transformation. The amount of this periodical fee shall be equal to the value of the fee for the right of perpetual usufruct which would be in force on the date of the above-mentioned transformation.
Last modified 13 Mar 2025
Among other things, rent if the real estate is leased, income from advertisements if they are located on the real property or on the elevation of buildings located on such property, and income from parking spaces if they are located on the real property.
Last modified 13 Mar 2025
Any income generated from real estate is subject to general income tax rules in Poland:
Taxable income is defined as the taxable revenue earned on the capital gains and earned from other revenue sources after the deduction of costs. Tax-deductible costs are any costs aimed at generating or securing taxable revenues.
The amendments of the CIT Act which have been in force since 1 January 2018 introduced a distribution of the earned revenue into two sources:
Tax law specifies over 60 categories of cost that cannot be deducted for tax purposes but the rules are complex and specialist advice should be sought on this matter.
The costs of acquiring real estate may be deducted for tax purposes only by way of depreciation write-offs, however starting from 2023 depreciation write-offs on residential buildings and residential apartments must not be deducted for CIT purposes. This limitation does not apply to ‘commercial’ projects (hotels, student housing etc). With respect to other types of real estate, the annual depreciation rate ranges from 1.5% to 10%. Land cannot be depreciated and the cost of land acquisition can only be deducted for tax purposes when it is sold.
In 2024 the Polish legislator introduced into the CIT Act the possibility for micro-, small- and medium-sized entrepreneurs to individually determine the depreciation rates for self-generated fixed assets that are non-residential buildings (premises) and structures classified in categories 1 and 2 of the Classification of Fixed Assets (buildings and premises, as well as the cooperative right to commercial premises and the cooperative ownership right to residential premises, as well as civil engineering objects) entered for the first time into the fixed and intangible asset register of a given taxpayer, where that fixed asset is located in the territory of a municipality:
Where the fixed asset referred to above is located in a municipality located in a county where the average unemployment rate is:
CIT is payable at a flat rate of 19% on net income (small taxpayer under certain income thresholds can qualify for 9% rate). Entities resident in Poland normally pay CIT in Poland on their worldwide income. In the case of foreign entities (including companies) all income generated in Poland is taxed in Poland. However, double-tax treaties may modify this.
Partnerships are treated as transparent for tax purposes so the partnership itself does not pay tax. Income is allocated directly to the partners who are taxed individually in accordance with the applicable rate of corporate income tax (for legal entities) or personal income tax (PIT) (for individuals). For income tax purposes, partners are treated as if they held the real estate themselves. Generally, PIT rates are progressive. The rates are 12% and 32% . However, individuals carrying out business activities may opt to pay income tax at a flat rate of 19%. As a rule, non-tax residents pay PIT on net income from real estate located in Poland. Double-tax treaties may apply.
On 1 January 2014, limited joint stock partnerships became liable to pay CIT in the same way as limited liability companies and joint stock companies. Since 1 January 2021, limited partnerships were also made subject to corporate income tax.
The amendments of the CIT Act, which have been in force since 1 January 2018, introduced an additional income tax (an income tax on commercial properties) that is to be payable on certain commercial properties (fixed assets). The tax is applied in respect of office buildings, shopping malls, department stores, and other retail and service buildings with an initial value of more than PLN 10 million. The value of PLN 10 million regards all buildings of a given taxpayer or, under certain circumstances, all buildings owned by a certain taxpayer and its related parties. The tax is payable on a monthly basis and the rate is 0.035% of excess of the building's initial value over the amount of PLN 10 million. The tax so calculated will reduce the standard corporate income tax.
Moreover, the new provisions that has entered into force retroactively as from 1 January 2018 allows to apply for refund of the tax on commercial properties if it exceeds amount of standard corporate income tax.
Starting from 1 January 2019, a minimum tax applies to all buildings subject to lease regardless of their type except residential buildings put into use under government or local government social housing programs. The exemption threshold of PLN 10 million applies regardless of quantity or individual value of the buildings held by the taxpayer. The possibility to apply for a refund of the excess minimum tax on the condition that the tax authority does not find any irregularities in the amount of "regular" CIT liability was also introduced.
From 1 July 2021, an introduction of a new type of company to polish legal system was made – simple joint-stock company (prosta spółka akcyjna). However, the same rules of taxation applies. CIT is payable at a flat rate of 19% on net income (small taxpayers under certain income thresholds can qualify for 9% rate). The differences from the other types of companies lies in minimal share capital which is 1 PLN or in a possibility of establishing the company online.
The Act on specific arrangements related to the prevention, counteraction and control of COVID-19, other communicable diseases and emergencies caused by them provided the commune councils with the possibility of releasing the resolutions granting an exemption from tax on income from commercial properties determined for the part of the year 2020 and chosen months of the year 2021 as well as granting an additional time to pay the tax installments for the entrepreneurs, whose financial liquidity worsened because of pandemic.
On 1 January 2025, a top-up tax was introduced to ensure that the income of the constituent units of international and national groups is at least minimally taxed. The top-up tax is an additional tax burden on entrepreneurs on top of the existing CIT. It aims to ensure that all companies, especially those operating within international groups, pay a minimum level of tax on profits generated in Poland. In a situation where a company's effective tax rate in Poland is lower than 15%, the top-up tax is intended to compensate for the difference and ensure that the minimum level of taxation is achieved.
Under the new rules, the top-up tax applies to entities of international and national groups that have achieved consolidated group revenues of at least 750 million euro in at least two of the four tax years preceding a given year.
Entities of a given capital group from Poland are obliged to submit information on top-up taxation GIR (GloBE Information Return) to the competent tax authority annually, by the end of the 15th month from the end of the tax year (in the first year of application of the regulations - by the end of the 18th month). In addition, the local tax return and payment should be made by the end of the 18th month after the end of the tax year (in the first year of application of the regulations - by the end of the 21st month).
Last modified 13 Mar 2025
Income may be transferred to shareholders as dividends. Generally, withholding tax on dividends is payable at 19% of the gross dividend payment (regardless of whether the dividends are paid to a company or to an individual and whether the recipient is resident or non-resident).
Exemptions to withholding tax on dividends may apply under Polish law if the EU Parent-Subsidiary Directive applies. Generally, the tax-exemption on dividends paid by a Polish resident company applies if all the following conditions are met:
In the case of non-tax residents (both corporate and individual), the rules on the taxation of dividends may be modified by the provisions of a relevant double-tax treaty.
There is no additional taxation if the profits of a partnership (excluding the profits of limited joint stock partnerships which is subject to a particular regime) are transferred to the partners, since the income of the partnership is treated as the income of the individual partners.
Last modified 13 Mar 2025
No.
Last modified 13 Mar 2025
No.
Last modified 13 Mar 2025
Income from the sale of real estate is subject to personal income tax or corporate income tax.
Income from the sale of property is calculated as the difference between the sale price and the net value of the real estate. Income can be reduced by any costs related to the sale. There are complex rules on allowable deductions.
Corporate income tax is payable at a flat rate of 19% on net income (small taxpayer under certain income thresholds can qualify for a 9% rate). Entities resident in Poland generally pay corporate income tax in Poland on their worldwide income. In the case of foreign entities (including companies) all income generated in Poland is taxed in Poland (including the income from sale of real estate). However, double-tax treaties may modify this.
Partnerships (excluded limited joint stock partnerships and limited partnerships) are treated as transparent for tax purposes so the partnership itself does not pay tax. Income is allocated directly to the partners who are taxed individually in accordance with the applicable rate of corporate income tax (for legal entities) or personal income tax (PIT) (for individuals).
For income tax purposes, partners (excluded partners of limited joint stock partnerships and limited partnerships) are treated as if they held the real estate themselves. There are complex rules on the tax rates applicable to partners selling real estate in the course of their business activities. For partners that are legal entities a 19% corporate income tax rule is applicable. For individuals, tax rates are progressive (12% and 32%) or a flat rate of 19% may apply. As a rule, non-tax residents pay PIT on net income from real estate located in Poland. Double-tax treaties may apply.
On 1 January 2014, limited joint stock partnerships became liable to pay CIT in the same way as limited liability companies and joint stock companies. Since 1 January 2021, limited partnerships were also made subject to corporate income tax.
As of 1 January 2021, the provisions amending the Corporate Income Tax Act entered into force. Pursuant to the new regulations, a so-called “real estate company” whose shares are subject to transfer acts as a payer obliged to pay an advance tax on the sellers' income if the seller is a non-resident (including a natural person) and the subject of the transaction is a shareholding of at least 5% in the real estate company.
From 1 July 2021, an introduction of a new type of company to polish legal system was made – simple joint-stock company (prosta spółka akcyjna). However, the same rules of taxation applies. CIT is payable at a flat rate of 19% on net income (small taxpayers under certain income thresholds can qualify for 9% rate). The differences from the other types of companies lies in minimal share capital which is 1 PLN or in a possibility of establishing the company online.
A real estate company is obliged to pay to the account of the competent tax office, as the payer, an advance tax on the income from this title in the amount of 19%, by the 20th day of the month following the month in which the income arose.
A provision has also been introduced to counteract artificial division of transactions — the 5% threshold will cover disposal transactions from 12 months.
Where an individual disposes of real estate, the taxation (PIT) rules will be determined on the basis of when the property was acquired. Specific exemptions may apply.
Where shares of the company the assets of which consist mainly of real estate located in Poland are disposed of, the seller may be liable to income tax in Poland (double-tax treaties may apply). Sale of shares is subject to tax on civil law transactions (PCC) which is payable by the buyer. The tax on civil law transactions (PCC) equals 1% of the market value of shares.
In case of sale of real estate (asset deal) where the seller is an entity conducting a business activity, VAT is payable. Generally, the VAT rate on real estate is 23%. The sale of agricultural land is exempt from VAT.
Any sales of real property other than land are exempt from VAT if two years have lapsed since that property's first occupation. However, in some circumstances the seller may opt for such a transaction to be subject to VAT. Other specific exemptions may apply.
If a sale is exempt from VAT, it is subject to a 2% tax on civil law transactions (PCC).
Last modified 13 Mar 2025
In the case of an asset deal (ie the direct purchase of an interest in real estate by a corporate vehicle or individual), the purchase of real estate incurs the following costs:
Depending on the particular circumstances and the type of real estate, other costs may also be incurred (eg the cost of obtaining other documents required by the notary and the commission charged by the real estate agent).
In the case of a share deal (ie the purchase of shares in a corporate vehicle holding the real estate), costs include:
These costs are, generally, deductible for tax purposes if met by the seller. However, if the costs are met by the buyer, they are treated as part of the value of the real estate and may be deducted for tax purposes in the form of depreciation write-offs (in the case of real estate consisting of property other than land) or deducted against a subsequent sale of the real estate.
Last modified 13 Mar 2025
How can investment in real estate by an individual/organization/company be set up?
Individuals, organizations and companies may invest in real estate in Poland directly or through a corporate vehicle.
Last modified 13 Mar 2025