Time to start work on a new law on local taxes and charges

“The Law on Local Taxes and Fees is fraught with legislative shortcomings, including logical errors,” we can read in many rulings of administrative courts, including the Supreme Administrative Court, as well as in judgments of the Constitutional Court. The latter has had a very significant impact on property tax practice in the year just passed. In July and then in October this year, extremely important and favourable judgements of the Constitutional Tribunal were made for taxpayers, which means not very good news for local governments and legislators.

– The first of the CT rulings concerned our client’s case, in which the Court ruled that the definition of a structure in the Local Taxes and Fees Act was unconstitutional. The legislator was given 18 months to amend the definition of a structure in such a way that it did not contain references to the construction law. In the second judgment, on the other hand, the Court ruled that it is inconsistent with the constitution to differentiate the taxation of a garage depending on whether it has a joint land and mortgage register with a flat or a separate one – in this case, the entry into force of the judgment has been postponed until the end of 2024. Therefore, as of 1 January 2025, changes in the Local Taxes and Fees Act should take place in this area. The legislator can no longer make excuses by referring to interpretations or court rulings to clarify the provisions of this law. The problem, however, is that the law regulating property tax has been the subject of disputes and harsh criticism for so many years that the only sensible solution would be to rewrite it, according to Paweł Wyporski, an expert on accounting for investments in property tax.