Long-term leases do not increase local taxes

Michał Nielepkowicz, tax adviser, partner at Thedy & Partners in his commentary for the editors, points out that this is a very important judgment. This is because it concerns the issue of the property tax rate in the case of lease of residential premises to natural persons for residential purposes as part of their business activity, which has been extremely important recently. In particular, it should be appreciated that the NSA addressed this problem on the sidelines, so to speak, and ruled in opposition to the view that has been forming recently, which is very unfavourable to taxpayers. The latter, in the disputed case, considered the 30-fold higher tax rate for real estate connected with the conduct of business activity and residential premises occupied for its conduct to be appropriate. Fortunately, in its latest ruling, the NSA stated that residential premises are taxed at the lowest rate when the purpose of satisfying residential needs is fulfilled and it is irrelevant whether the residential premises themselves were leased by an entrepreneur. Particularly as the contrary view also contradicts the constitution, which mandates the promotion of a policy to meet the housing needs of citizens. And this is implemented, among other things, through preferential taxation. In turn, subjecting rented flats to the highest possible rate would result in a drastic increase in rents.

The entire article can be read in Rzeczpospolita of 18 August 2023, page A11