Housing Tax Relief – How Does It Work?
In a situation where a taxpayer receives real estate by way of donation and then sells it before the lapse of five years from the date of acquisition, they are required to pay Personal Income Tax (PIT) on the generated income at a rate of 19%.
However, if the funds obtained from the sale are allocated to the taxpayer’s own housing purposes (e.g., the purchase or renovation of a property) within three years from the date of receiving those funds, the taxpayer may benefit from housing tax relief and ultimately avoid paying the 19% PIT.
In practice, this has raised concerns that individuals who already own another residential property could lose the right to the relief when acquiring an additional one.
What Has Changed?
The Polish Ministerstwo Finansów (Ministry of Finance) has issued guidance indicating that it recognizes the possibility of legally avoiding the 19% PIT in such cases.
Importantly, the Ministry confirms that taxpayers may benefit from housing tax relief even if the funds allocated to their own housing purposes are not exactly the same physical funds received from the property sale.
What Does This Mean for Taxpayers?
Taxpayers are not required to maintain detailed accounting records enabling the identification of the specific funds received from the sale.
In other words, there is no obligation to trace the exact banknotes or transfers used for housing purposes.
Summary
The position presented by the Ministerstwo Finansów is both reasonable and favorable to taxpayers.
To benefit from housing tax relief, it is not necessary to meticulously earmark the exact funds obtained from the sale of the property. It is sufficient to ensure that an amount equivalent to the sale proceeds is allocated to eligible housing purposes.
Planned Effective Date
The amended regulations are scheduled to enter into force on January 1, 2026.