A tank for property tax purposes may be a structure, but only exceptionally
There is still a problem with taxation of structures, and a recent judgment of the Supreme Administrative Court concerning tanks could have solved it, but unfortunately it raises further doubts. The NSA ruled that, in exceptional cases, a tank may be qualified as a structure for the purposes of property tax. Experts, however, have a number of reservations with respect to such an interpretation, writes the Prawo.pl portal.
Michał Nielepkowicz, tax adviser, partner in Thedy & Partners, commenting on the case for the portal, pointed out that it is worth noting that after the resolution of September last year, concerning taxation of silos, the NSA still sees the need to clarify the position expressed in the resolution and, in the judgments handed down following the resolution, formulates guidelines on how, in its opinion, the flawed provisions of the Act on real estate tax should be interpreted.
In this respect the NSA has rightly noticed that in practice we deal with very different objects which are collectively called silos (sometimes tanks which are also characterised by their significant height). And one cannot lump all such tanks or silos together. There are both such containers or silos which obviously do not have the features of a building, e.g. portable silos for construction materials used on construction sites or, in certain cases, grain silos (where, in particular, doubts as indicated by the NSA in this case, may concern the features of a permanent connection with the ground). However, there are also objects of significant size, in the case of which all characteristics of a building are met, including having a usable area of a measurable size, and such objects – definitely should be taxed as buildings. In their case, all features from the definition of a building are met, and this circumstance alone should determine their qualification as a building (disregarding even the extent to which their usable area, which can obviously be measured, is significant).
In this judgment, the NSA added that if it is possible to determine the usable area and it is not insignificant, plus the facility has storeys, it should be considered as a building under the provisions on real estate tax (i.e. the Act on Local Taxes and Fees), and taxed on its usable area. The economic function is irrelevant in this respect, as it introduces vague criteria (and at the same time non-statutory criteria for buildings), in contrast to the objective features set out in the definition of a building – features relating to the structure of a given object, such as its foundation, permanent connection with the ground, separation from space by means of building partitions and roof. If these features are met in a specific case, then we are dealing with a building, and other parameters such as height or volume (also determined by the height of the object) cannot be of significance. Otherwise, for example, a tower or a church bell tower would have to be considered as a building, although they fulfil all the characteristics of a building and are obviously buildings. Buildings are not only objects where the ratio of surface area to height exceeds some fixed value (which, by the way, is nowhere reserved in the regulations), but all objects that meet – once again – the features from the statutory definition of a building.
Returning to silos: this also means that objects such as modern silos for sugar, clinker or cement – in light of the case law of the Supreme Administrative Court and following the resolution of September 2021. – must constitute buildings and not structures.