Following the transition to a new administrative system in Poland, there has still been no reform of the real estate tax regime, unlike many other areas of law, which have seen reform. To some extent, the current regime is a hangover from a different time. The system of taxation of real estate is a hybrid system based on surface area and value. In the surface area taxation model, the tax base is the usable area of the property. In this case, the relevant rate is quantified according to the type of real estate and purpose for which it is used. The rates, that is the upper limits for tax and local levies (maximum rates), are set on an annual basis by the minister competent for public finances, currently the Minister of Finance.
Each year, the maximum rates are adjusted for inflation at the rate announced by the President of Statistics Poland for the first half of the year in relation to the preceding year. According to art. 20 of the Tax and Local Levies Act of 12 January 1991[1], this indicator is a factor determining the upper limits of rates of taxes and local levies set by the minister competent for public finances for the following year.
The true tax and local levy rates are decided in the year in question by each municipal authority in the respective resolution adopted in the preceding year, but these adopted rates cannot exceed those set by the Minister of Finance. The true rates for real estate tax are usually set by the municipal authority at the maximum levels, while municipal authorities can opt for lower, preferential rates, for example in order to pursue policies adopted to attract business or residents to the region.
The tax system in Poland is a hybrid one, and while taxes on real estate are quantified according to surface area as described above (area of a plot, building, or premises), the building structure tax is determined based on value. It is calculated as a percentage, and is 2% of the value of the structure determined as required under art. 4(1)(3) and sections 3-7 of the Tax and Local Levies Act.
With regard to calculating real estate tax according to surface area, under the law as it stands at the moment, tax is levied based on the information in the land and building records. Like data concerning types of land use, viewed in conjunction with soil classification of agricultural and forest land, the land and building records are the basis for calculating agricultural and forest taxes. These taxes are calculated depending on productive quality of soil, according to the soil’s genetic properties[2].
Building structure tax, meanwhile, is complicated and incomprehensible, as numerous administrative court rulings show. As stated by L. Etel, R. Dowgier in Podatek od nieruchomości Komentarz, in 2025 the changes sought with regard to the structuring of real estate tax took effect, including new definitions of building structures, buildings, and construction works. The rules on real estate tax on installations such as power grids, silos, tanks, metal garages, houses for tourists, parcel lockers, free-standing industrial installations, advertising boards, carwashes, heating pumps and many others have now been substantially amended.[3]
Another important question regarding taxation of real estate is real estate tax for example on building structures used in business activity. Real estate tax is a real expense for a business. While properly calculating real estate tax according to plot surface area is the least complicated issue, as in fact this is simple and is based directly on the land records, with regard to buildings, and building structures specifically, this is not such a clear-cut issue. In practice, municipal authorities have only partially resolved the question of records concerning buildings under construction, where no notification has been filed that construction has been completed. The biggest problem faced by municipal authorities relates to building structures. Businesses do not always declare the current status with regard to real estate, and copy past records. Some building structures are not mentioned in submitted forms, or the value stated is not the true value. The term building structure is given in art. 1A(1)(2) of the Tax and Local Levies Act, and this definition was revised in 2025. The tax base is the value of the structure. The cost of construction or acquisition is considered in valuation of a structure, and thus the value used is that used for depreciation, determined as at 1 January of the relevant fiscal year. If structures are written off, the applicable value is the value as at 1 January of the year of the most recent write-down. In practice, when calculating tax on real estate, the value applied is the initial value of the structure as a fixed asset, or, as appropriate, the revised value representing the cost of acquisition or production: the term cost of acquisition means the sum of the price paid by the buyer for the structure and other expenses such as transportation, loading and unloading, and assembly, and also notarial and insurance costs, etc. The term cost of production means the value of materials and other tangible assets, payroll expenses, outsourcing costs, and other expenses deemed to be related to the value of a fixed asset.
In light of the above, while the system regarding tax of real estate in Poland is not simple, it is efficient as far as surface area tax calculation is concerned. Unfortunately, the system based on the value of building structures is not properly developed, and this is because records cannot be updated on a regular basis.
Due to this method of taxation of real estate, the question of radical reform of the system has been the subject of debate in Poland for many years. It has been suggested that the new taxable base should be the value (ad valorem).
One of the main problems that arise in the case of this tax is conditions relating to large-scale, collective valuation. Under article 4 of the Real Estate Management Act [4], whenever the term common taxation of real estate is used in the act, this means valuation of real estate in which the real estate value determined is the value given in land records.
The land record value of real estate will be determined for tax purposes. This will be needed for real estate tax compliance, and under article 150(4) of the Real Estate Management Act will be calculated in the case of the types of real estate mentioned in provisions on real estate tax contained in the Tax and Local Levies Act of 12 January 1991.
While the land record value of real estate must be determined by the competent tax authority, under art. 161(3) of the Real Estate Management Act, property valuers are required to value real estate representative samples for the purpose of drawing up tax maps and tables. The rules on valuation according to land record value for general taxation purposes are laid down in art. 160-173 of the Real Estate Management Act. The general taxation process described in the laws in question is not applicable because, for various reasons, implementing real estate tax based on value will not be possible in the next few years. The main reason for this is that there is no systemic means of compiling and transferring real estate records in a synchronized manner. The quality of records is also an issue.
At the most recent XXII Property Valuers Conference in Olsztyn, the highly complex issue was raised of transparency of information on the real estate market and synchronization of records across the individual registers. In the Jones Lang la Salle (JLL) Polska Global Real Estate Transparency Index, which has been compiled for many years, Poland is rated as 2.13 in this regard and continues to be outside of the top group of companies with the highest transparency level. It is ranked only 20th in this regard, due to reasons including limited access to transaction price and lease contract information[5].
As we know, real estate tax in the sense of tax based on value has not been introduced in Poland, and this is unlikely to happen for a long time despite the debate that has now been going on since the beginning of the 1990s. As mentioned, one of the key issues is the possibility of large-scale, collective valuation of real estate.
Property valuers expected to value real estate samples representative for this system encounter many problems as regards obtaining information for their day-to-day activities, as the amount and quality of records, and also access to records, is limited.
Until an integrated land records system is created, it will not be possible to introduce an all-embracing, fully functional real estate taxation system that operates solely according to real estate value.
Perhaps reform of the real estate taxation regime should be undertaken gradually, starting with the value of land itself. In view of past and current records concerning value of land, for the purpose of calculating perpetual usufruct fees this would be a good starting point. It is indisputable that such reform is needed and vital, considering local government finances.
[1] Tax and Local Levies Act of 12 January 1991 (Journal of Laws of 2023, item 70, as amended)
[2] D. Felcenloben Kataster Nieruchomości , Gall , Katowice, 2009, pp. 38-39
[3] L. Etel, R. Dowgier Podatek o d nieruchomości Komentarz, Wolters Kluwer , Warsaw 2025, p. 11
[4] The Real Estate Management Act of 21 August 1997 (Journal of Laws of 2023, item 344 as amended).
[5] Rzeczoznawca Majątkowy, Kwartalnik Polskiej Federacji Stowarzyszeń Rzeczoznawców majątkowych, third edition (22 204 ) 2025, p. 19
