Regulations concerning real property tax are included in the Act of 12 January 1991 on Local Taxes and Charges (consolidated text: J. of Laws of 1 June 2010, No. 95, as amended).

What is and is not subject to the tax?

Real property tax is levied on:
1) land;
2) buildings or their parts;
3) structures or their parts linked to running a business activity.

Real property tax does not apply to agricultural land, wooded land and scrubland within agricultural land or woods, with the exception of land occupied for business purposes.

Among other exemptions from real property tax, we should mention land under flowing surface waters and navigable channels, with the exception of lakes and land occupied by storage reservoirs or hydro-electric power stations. Other exclusions occur very rarely.

Taxable persons in real property tax

Taxable persons in real property tax are individuals, legal persons, non-corporate bodies and companies without legal personality, being:

1) owners of real property or civil structures;
2) owner-like possessors of real property or civil structures (if the object of taxation is held under independent possession, the real property tax obligation is imposed on the owner-like possessor);
3) perpetual usufructaries of land;
4) holders of real property or its part, or civil structures or their parts, owned by the State Treasury or local government units, if the possession:
a) results from an agreement concluded with an owner, the Agricultural Property Agency of the State Treasury (now: Agricultural Property Agency), or from some other legal title, with the exception of possession by individuals of residential premises other than separate real property;
b) is not based on a legal title, subject to Article 3 para. 2 of the Act (applicable to objects of taxation included in the Agricultural Property Stock of the State Treasury or managed by the “State Forests” National Forest Holding).

Very important: If the real property or civil structure is held under joint ownership or is in possession of two or more entities, then it is a separate object of taxation, and the tax obligation related to the real property or the civil structure is imposed jointly and severally on all co-owners or holders. In cases where premises are held under separate ownership, the obligation to pay real property tax on the land and that part of the building that are held under joint ownership is imposed on owners of premises in proportion to their respective fractional holdings, i.e. the ratio of the premises' floor space to the floor space of the entire building.

Taxable base

The taxable base is usually:

1) for land – its area;
2) for buildings or their parts – floor space;
3) for buildings or their parts linked to running a business activity – the value referred to in income tax regulations, established on 1 January of the tax year, which is the basis for calculating depreciation in that year, not reduced by depreciation allowances; and in the case of fully amortised structures – their value as at 1 January of the year in which the last depreciation allowance was recognised.

If the tax obligation related to real property tax on a structure arose in the middle of a tax year – the taxable base is the value that was the basis for calculation of depreciation as the date when the tax obligation arose.

Note: there are numerous specific situations where the taxable base is determined in a manner other than according to general rules specified above – they are described in the Act on Local Taxes and Charges.

Method for determining the amount of real property tax vs. the date of recognition in the tax book of revenue and expenditure

The key issue in determining when and how to recognise real property tax in the tax book of revenue and expenditure is the legal status of a taxable person obliged to pay real property tax.

For individuals obliged to pay real property tax, the tax will be determined by a decision of a tax authority competent for the location of objects of taxation. The tax is payable in instalments proportionate to the duration of the tax obligation: by 15 March, 15 May, 15 September and 15 November of the tax year.

The tax authority's decision is issued based on information that individuals must submit to the tax authority (in practice, we send such information to a relevant department in the town or gmina office). Beware: if the real property or civil structure is held under joint ownership or is in possession of individuals and legal persons, non-corporate bodies or companies without legal personality, with the exception of persons making up a housing community, such individuals submit a real property tax return and pay the tax on the conditions that apply to legal persons.

Information about real property and civil structures should be submitted on a relevant form within 14 days following the date of occurrence of circumstances justifying the origination or expiry of the tax obligation related to real property tax, or following the date of an event that has contributed to the origination of the tax obligation; and if in the middle of a tax year, the tax obligation related to real property tax expired, or an event occurred referred to in para. 3, the tax authority shall change a decision by which the tax was established.

Legal persons, non-corporate bodies and companies without legal personality, organisational units of the Agricultural Property Agency of the State Treasury (now: Agricultural Property Agency), as well as organisational units of the “State Forests” National Forest Holding are required:
1) to submit, by 31 January, to a tax authority competent for the location of objects of taxation, real property tax returns for a given tax year, on a relevant form, and if the tax obligation arose after that date, within 14 days following the date of occurrence of circumstances justifying the origination of such obligation;
2) to accordingly adjust their tax returns if an event occurs referred to in para. 3, within 14 days following the date of the event;
3) to pay real property tax in the amount calculated in the return – with no prior notice – to the bank account of a relevant gmina, in instalments proportionate to the duration of the tax obligation, by the 15th day of each month, and by 31 January for January.

Taxable persons paying real property tax on the conditions specified for legal persons

General partnerships and limited liability partnerships that pay real property tax declare the tax amount without waiting for a tax authority's decision. In this case, the tax liability arises by operation of law – on the day when an event occurs that the Act on Local Taxes and Charges associates with the origination of such liability. The Act also sets out the tax point. Usually it is the first day of the month following the month in which circumstances occurred justifying the origination of the tax obligation.