Housing allowance for grazing land

Adam Allen, tax adviser and partner at Thedy & Partners was asked by the editorial team to comment on the case. He stressed that the ruling in question concerns the scope of application of the so-called housing relief, which, despite this colloquial name, applies not only to flats, but also to residential buildings (houses) and also to land associated with such a building. As a reminder – the purpose of this relief is to satisfy one’s own housing needs. One can get the impression that the dispute concerned the question of whether the purchase of a residential house with a very large agricultural plot, including agricultural land and pastures – fulfils the purpose of this tax relief. To this question the tax authorities rightly answered that, in general, the part of the plot that includes arable land and pasture does not fulfil the purpose of the relief. On the other hand, in their position, the tax authorities did not answer more specifically how to divide the expenditure for the acquisition of the building with the aforementioned land plot in order to separate the purchase of part of the land plot. From this perspective, it is good that the courts have not upheld this position of the tax authorities. At the same time, I would particularly point out the uselessness of the tax interpretations that have been challenged by the courts. In particular, the second interpretation, already after the final judgment of the Supreme Administrative Court, was still issued on the principle that it is not allowed to use the housing allowance for part of the expenses for the purchase of a plot of land, but without reference to the provisions on how the amount of the allowed tax allowance should then be calculated. It is therefore a good thing that such an imprecise application of the tax rules has been challenged by the courts.

The entire article can be read in Dziennik Gazeta Prawna of 30 October 2023, page B1