The levy cannot elevate the rent
Flats serving permanent housing needs cannot be taxed at a higher rate - as for business. Even if they are rented out by a company, according to a ruling by the NSA, as described by Rzeczpospolita.
Michal Nielepkowicz, tax adviser, partner at Thedy & Partners was asked to comment on this ruling by the newspaper. In his opinion, he stressed that this is a very important NSA ruling. It is gratifying that the Supreme Administrative Court recognised a broader problem and also justified the right to the lowest (residential) property tax rate in the case of premises leased as part of business activity in order to satisfy housing needs with social considerations.
This is because it does not matter – contrary to previous rulings – whether the owner makes the premises available as part of his business activity, but the key point is that a residential function is realised in the premises. It is only the occupation of the premises for the purpose of carrying out a business activity – the actual, physical occupation of the premises for such activity – that can entitle the owner to the highest tax rate. Of particular importance here is the social aspect highlighted by the NSA, as a higher tax rate on housing would translate into large rent increases burdening tenants, which would also distort the sense of the constitutional obligation of public authorities to pursue a policy conducive to satisfying the housing needs of citizens.
Let us only hope that from now on we will be able to speak of a formed line of case law of the Supreme Administrative Court in this respect.
The entire article is published in Rzeczpospolita of 23 November 2023, p. A11