The ambiguity of the provisions regarding real estate tax and numerous court and administrative disputes arising on this basis have accustomed us to the fact that each year is decisive for this tax. So, what new things await us in 2024 and how to prepare for them?
Increase in property tax
From the point of view of taxpayers, the level of real estate tax rates seems to be important, which, due to the content of Art. 20 section 1 of the Act of 12 January 1991 on local taxes and fees (u.p.o.l.), are indexed every year by the inflation rate. By 15 percent the maximum rates of local taxes and fees will increase in 2024 – according to the announcement of the Minister of Finance on the upper limits of fixed rates (M.P. of 2023, item 774). Rates increase by 15% in 2024 was the highest in many years and will therefore be noticeable for taxpayers.
The ministerial announcement assumes that in 2024 the maximum real estate tax rate per square meter of usable area:
- building related to running a business – will increase to 33.10 PLN (in 2023 – 28.78 PLN),
- apartment or residential house – 1.15 PLN (i.e. 15 gr more than in 2023),
- garage constituting separate property – 11.17 PLN (in 2023 – 9.71 PLN).
It is worth mentioning that the rates indicated in the announcement of the Minister of Finance of 21 July 2023 are maximum rates and it is ultimately the commune council that decides on their amount in a resolution. However, as the practice of the largest Polish cities shows, including: Warsaw, Kraków, Wrocław, Poznań and Gdańsk, in 2024 taxpayers will probably be obliged to pay the maximum rates.
From the point of view of rates, it is also important to determine whether the land, building or part thereof is related to running a business. However, the way these terms are understood is constantly the subject of controversy, which is reflected in the jurisprudence of administrative courts and even the Constitutional Tribunal. For example, in the judgment of July 12, 2023 (III FSK 250/23), the Supreme Administrative Court found that meeting the housing needs of an entrepreneur or his tenant in a building or residential premises excludes the possibility of applying the PON rate to this building, premises and the land associated with them. intended for business activities.
Judgments of the Constitutional Tribunal and their consequences
The year 2024 will bring a change in the regulations regarding real estate tax rates due to the content of the judgment on the taxation of garages of 18 October 2023 (ref. no. SK 23/19), which is favorable to taxpayers. However, the Constitutional Tribunal postponed the loss of force of the unconstitutional provision until the end of 2024. This means that for the next year you will have to pay a higher tax rate on garages constituting separate property.
An even greater challenge seems to be the need to redefine the concepts of “structure” and “building”, which in their current form – due to the reference to non-tax laws and thus failure to comply with the principle of specificity of tax regulations – were considered unconstitutional (in the judgment Constitutional Tribunal of 4 July 2023, SK 14/21). As in the case of the SK 23/19 judgment, the loss of binding force of unconstitutional provisions has been postponed, which gives the legislator time to formulate new regulations, which will most likely enter into force from 2025.
However, introducing new definitions will be a huge challenge due to the need to reconcile the interests of local governments and taxpayers. It will be necessary to conduct appropriate consultations that will allow for balancing both interests.
Constitutional Tribunal judgments and the resumption of proceedings
It is worth noting that the Constitutional Tribunal’s judgments make it possible to resume proceedings in already completed cases, so it is expected that new decisions will be issued in these cases in 2024.
Legislative changes will also lead to the need to revise the existing lines of interpretation of tax authorities and administrative courts, which will be based on new legal bases. This creates both an opportunity and a threat for taxpayers in terms of their current settlements, against which individual interpretations can provide protection.
