It is high time for a new law on local taxes and charges
The Constitutional Court has, once again in the last three months, unequivocally found the property tax provisions to be in breach of the Basic Law. What this means - Michał Nielepkowicz, tax advisor, partner at Thedy & Partners, tells us in an interview with fpg24.pl.
There is another judgment of the Constitutional Court questioning the constitutionality of the property tax regulations. The first one was in July, the next one in October. It concerns the dependence of the tax rate on a garage on whether the garage has a common land and mortgage register with the flat or a separate one. What exactly does this ruling imply?
Let’s start by pointing out that the case concerned the taxation of multi-space garages located in residential buildings. Developers offer garages that can have different legal statuses – either they will be attached to the flat or they will be a space in a legally separate garage. In the latter case, the garage has a separate land and mortgage register.
It is clear from the ruling of the Constitutional Tribunal (ref. SK 23/19): making the amount of the real estate tax rate dependent on whether the garage has a common book with the flat or is a separate property violates the provisions of the Constitution. So far, taxpayers who have a garage with a separate ledger have to pay significantly more tax than those who have a single ledger for the flat with the garage. Indeed, the tax rate for garages with a separate ledger is 10 times higher than for a garage that is entered in the ledger together with the flat.
In its justification, the Court recalled that such a method of taxation was in fact shaped in the NSA’s resolution of 2012. (ref. II FPS 4/11), which determined the interpretative approach in this respect for many years. The TK held that such a resolution of an administrative court is inadmissible. In particular, because it is an example of resolving doubts concerning unclear tax regulations to the disadvantage of taxpayers.
It is also worth mentioning that the TK pointed out that the Act on Local Taxes and Fees does not separate garages as a separate subject of taxation, considering them, depending on the facts, as a separate building or part of a building. Nor does it refer to other regulations in this respect. This, in turn, means that if the legislator has not referred in the Local Taxes and Fees Act to other non-tax laws, this must not be “added” or “clarified” by the interpreter (e.g. the court).
The Court ruled that the provisions of the Local Taxes and Fees Act, to the extent that they allow – for the purposes of property tax – a separate premises-garage located in a residential building to be regarded as a part of a building of a non-residential character, are incompatible with Article 84 in conjunction with Article 217 of the Constitution.
What does this TK ruling mean for taxpayers?
According to the TK, taxpayers should be treated equally when taxing garages. The amount of taxation should not be determined by what their legal status is. Thanks to the TK ruling, having a garage under a flat with a separate land and mortgage register, taxpayers will not pay more.
The entire interview can be read at this link: Najwyższy czas na nową ustawę o podatkach i opłatach lokalnych [WYWIAD] – Forum Polskiej Gospodarki (fpg24.pl)