Property tax will increase. How much will we pay in 2024?

Once again, the topic of property tax is returning. Poles are slowly getting used to double-digit increases. This year we had to pay almost 12% more than last year, and there is no sign of improvement in the next one. On 14 July 2023 the President of the Statistics Poland has issued a statement on the consumer price index for the first six months of this year vs. the corresponding period of the last year, which showed a jump of 15% upwards. We can also expect an increase in the levy by this much, as the Minister of Finance is guided by the level of inflation when setting tax thresholds.

Property tax rates are set by municipalities

Property taxes belong to the group of so-called local taxes. It is entirely assigned to the budgets of municipalities. The Minister of Finance only determines the highest applicable rates, while the final decisions on their amount are taken – usually in the fourth quarter of the year – by councillors in the form of a resolution. Local governments are therefore not obliged to adapt the conversion rates announced by the Minister in their own region, but may vary them for particular types of property, provided that the rates will not be higher than determined in the act on local taxes and payments.

Local governments are reluctant to budge from the upper limits adopted by the supreme administrative authorities. Last time, approx. 90% of local authorities adopted tax rates only slightly lower than the maximum rate, so there is no indication that it will be different now. This is because property taxes are an important source of own revenue for local government units, which supports their economic development.

Maximum property tax rate thresholds in 2024

According to the Minister of Finance notice of 21 July 2023, the new tax rate thresholds on real estate will increase as follows:

on land:

• connected with business activities, regardless of the qualification in the land and buildings register – PLN 1.16 PLN 1.34 per sqm;
• under surface standing or running waters of lakes and artificial reservoirs – PLN 5.79 PLN 6.66 per 1 2ha of surface area;
• other, including those used for conducting paid statutory public benefit activity by public benefit organisations – PLN 0.61 PLN 0.71 per sqm;
• undeveloped land included in the revitalisation area referred to in the Act of 9 October 2015 on revitalisation and located in areas, for which the local spatial development plan provides residential, service or mixed use development, including exclusively of mixed use including only these types of development, if a period of 4 years has elapsed from the date of entry into force of this plan with respect to these lands, and during this period construction has not been completed in accordance with pursuant to the provisions of the Construction Law – PLN 3.81 PLN 4.39 per sqm;

on buildings or parts thereof:

• residential buildings – PLN 1.00 PLN 1.15 per sqm of usable area;
• those connected with business activities and from residential buildings or parts thereof occupied for business activities – PLN 28.78 PLN 33.10 per sqm of usable area;
• occupied for conducting business activity in the scope of trading in qualified seed – PLN 13.47 PLN 15.50 per sqm of usable area;
• those related to the health care services within the meaning of the provisions on medical activity, occupied by entities providing such services – PLN 5.87 PLN 6.76 per sqm of usable area;
• other, including those used for conducting paid statutory public benefit activity by public benefit organisations – PLN 9.71 PLN 11.17 per sqm of usable area;
• on structures – remains at 2% of their value determined pursuant to Article 4(1)(3) and (3)-(7).

CHART 1. MAXIMUM PROPERTY TAX RATE PER 1 SQM. OF 1 FLOOR AREA OF A FLAT OR HOUSE FROM 2000 TO 2024

source: Own elaboration based on data of the Ministry of Finance

The graph above shows the trend in property tax rates from 2000 to 2024 in relation to residential buildings. It is easy to see that the fees have been steadily increasing all the time. The exceptions were 2016 and 2017, when they remained at the same level of PLN 0.75/sqm. In 2024, house and flat owners will pay PLN 1.15 per square metre of usable area, which is historically 15 per cent more compared to the previous year.

By when must the fee be paid?

The taxpayer does not have to calculate the due tax amount on his own. We will soon receive information with the amounts of those new fees for 2024. Individuals have their payment distributed over four instalments, which they should pay by the 15th day of each last month occurring in the quarter, i.e. 15 March, 15 May, 15 September and 15 November. In a situation when the total tax amount does not exceed PLN 100, the tax is payable once within the time limit for payment of the first instalment. Other payers also have the right to pay the total tax for the entire year. Such a solution is very popular among persons, whose liabilities are not high.

Business entities are obliged to make monthly payments in instalments proportionate to the duration of their tax liability – the first instalment by the 31st of January, the others by the 15th of each month.

In case of legal persons conducting business activity as sole proprietors, the deadlines and payment methods are the same as for individuals.

Summary

Despite upcoming record-breaking increase in property tax, the due amount still remains symbolic. The owner of a single-family residential building with a usable area of 200 sqm, located on a plot of 800 sqm will pay only PLN 110 more. On the other hand, the fact that this is one of many increases weighing on our wallets is not optimistic. The cost of maintaining immovable property is increasing at a rate well ahead of inflation and households are increasingly burdened with the high prices. In addition, they will have to accept new local charges.

Joanna Woźniak
Maintenance and Development Junior Specialist