The cadastre, i.e. the tax on the value of the flat, is still an ace up the government’s sleeve in case of a large hole in the budget. For now, a real estate tax is still in force in Poland, which is paid per square meter and in the case of residential premises the burden is relatively small, but if it was replaced by the cadastral tax – and this option is loud again – and amounted to, for example, 1% in Germany. real estate value, the owner of a 60-meter flat in Warsaw would pay the equivalent of approximately PLN 7,400 per year.
It still has legal force in Poland Property taxhowever, in large parts of European countries as well as the United States, there is a cadastral tax.
Cadastral tax in Poland? What could it mean for the real estate sector
From time to time you hear about the possibility of introducing this type of solution also on the Vistula. What would be the consequences for the real estate sector as well as investors and the common “Kowalski”? According to the table of real estate services, tableofert.pl, taking into account that the tax, similarly to our western German neighbors, would amount to, for example, 1% of the property value, the owner of a 60-meter flat in Warsaw would pay the equivalent of approximately PLN 7,400 per year.
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As the Ministry of Development and Technology assures, there are currently no such plans, but at the same time it indicates – officials monitor the current situation on the housing market and are working on various solutions. According to Robert Chojnacki, president of redNet24, a company specializing in the sale of developer apartments, a possible new property tax would most likely not be a typical cadastral tax. At the same time, apartment owners should be prepared for some changes in the near future.
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– Officials are looking for a way, among others on the so-called Flipping, i.e. buying flats in order to sell them quickly at a higher price, reducing speculation on rental prices or managing vacancies. Of course, the goal is also to search for new sources of budget revenues, especially for local governments. A possible new form of taxation would shortly reduce real estate prices, which would probably benefit mainly holdings and enterprises with very large capital. On the other hand, in the long run, part of the capital could flow abroad, thanks to investors looking for more favorable conditions for business, assesses Robert Chojnacki, president of redNet 24.
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The real estate tax currently in force in Poland is calculated according to the maximum rates specified in the Act on Local Taxes and Fees. In 2021, the maximum rate for a residential building is PLN 0.85 per sqm. real estate. Therefore, the owner of a 60-meter apartment in our country has to pay a fee of PLN 51.00 per year.
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Cadastral tax differs from real estate tax in that it is calculated on the value of the dwelling. This type of solution was decided by, among others, Germany, Great Britain, Ireland, France, Belgium, Spain, Sweden, Latvia or our Lithuanian neighbors. Cadastral tax is charged differently from country to country, and its average value ranges from 0.5 to even 2 percent of the property value. Additional factors often have an impact on the amount of tax, such as e.g. location of the apartment – of course, the more prestigious, the higher the fee. T.what is i.a. beyond our western border. In Germany, the tax depends on the type of property and the region (state) in which it is located (maximum 1%). For comparison, the US cadastral tax ranges from 2% to 2.5% of the market value of a property.
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Taking into account the dynamic increases in housing prices in Poland, the possible introduction of a cadastral tax would seriously hit the pockets of customers, especially individual ones. According to the data from the table of real estate, tableofert.pl shows that in recent quarters, the average prices of real estate on the primary market, offered on the largest residential markets in the country – Warsaw, Tricity, Wrocław, Kraków, Poznań and Łódź, were characterized by an upward trend. At the end of September 2021, for a square meter of own “M” in the capital, you had to pay PLN 12,325, which means an increase by as much as 60.2% from 2017.
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According to Maciej Dymkowski, the managing president of tableofert.pl, any changes to the property tax in the long run would bring significant changes in the real estate sector in Poland.
– Although we are observing a dynamic growth in the market, incl. activities of professional entities involved in the purchase of apartments for rent, this is private ownership of flats and houses continues to reign in our country. In the event of introducing a kind of cadastral tax on the Vistula River, it will certainly prevent a large part of individual clients from incurring such high costs, and thus may be forced to sell their real estate. Tenants would also get their money’s worth, because apartment owners would be looking for a tax refund somewhere. I predict that we could also see an immediate decline in interest in expensive real estate from the premium sector, says Maciej Dymkowski, CEO of Tabelaofert.pl.
According to experts, possible protection for Poles who have only one apartment would be the introduction of a cadastral tax on the second or third real estate. To protect the least wealthy citizens, the government should then also consider specific tax thresholds or allowances for specific types of property.
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