When purchasing real estate in Poland, the costs of carrying out the entire procedure from start to finish are not limited to the cost of the property specified in the purchase and sale agreement. In this case, payments for all services provided by the notary during the transaction are not taken into account. If we are talking about medium-sized apartments located in a large town, then several thousand zlotys will need to be paid to the tax office.
When purchasing housing in a new building, value added tax is automatically included in the price. For large apartments with a total area of more than 150 square meters or detached single-family houses with an area exceeding 300 square meters, this figure is 23%, while in other cases a preferential VAT rate of 8% is used. In terms of taxation, purchasing real estate in Poland on the primary market looks more preferable. In addition, if a potential investor is an entrepreneur and intends to use his property in business, he will be entitled to a tax deduction.
On the secondary market of Polish real estate the situation is different. VAT as such is not charged on an apartment or house that has already been used, but you will additionally have to pay a tax on civil transactions, the amount of which is 2% of the market value of the property. In fact, this value is indicated in the notarial deed of transfer of ownership, and in this case, the buyer and seller should not agree on a significant understatement of this amount, so as not to arouse fair suspicion among tax police officers and thus not run into unnecessary taxes and fines.
Typically, if the sale price of housing in Poland is significantly lower than the market price, by about a third of the average for the area for objects of similar area, age, condition and time in use, the notarial deed indicates various technical defects that arose during construction or operation. The sale of an apartment or house that clearly belongs to the elite at an unreasonably low price may also raise doubts among tax authorities, even if the former owners explain this by force majeure.
In some cases, you will not need to pay tax on civil transactions. This applies in particular to council housing or co-operative ownership, where the tax payer is already the seller, thereby avoiding double taxation. In addition, buyers of communal apartments or shares in them are exempt from tax obligations.
Payment of another tax in the amount of 0.01% of the market value of the property is planned when purchasing real estate using mortgage lending, which is increasingly being resorted to due to low interest rates. If the mortgage tax is of a limited nature, then its amount is 19 zlotys, and it must be paid to the tax office no later than two weeks from the date of purchase of the house or apartment.
Finally, a home seller in Poland will also be forced to pay a tax of 19% on the income received during the use of his property, if this period does not exceed five tax years. After this period has expired, you will no longer need to submit a corresponding declaration to the tax service. Also, persons who, within three years after the sale, have spent all the proceeds on the purchase of new housing or who have carried out major repairs or reconstruction of the premises at their own expense, are exempt from paying it.