Deciding to sell is not only about the price and the timing, but also about tax. The good news is that in many cases the sale of a property in Poland is exempt. It is still worth checking your situation carefully before you sign - sometimes it even determines the best date for the transaction.

The five-year rule

Income tax on the sale of a property is due when the sale takes place within five years, counted from the end of the calendar year in which the property was acquired or built. The same rule applies to a cooperative ownership right to an apartment.

Example: an apartment bought in March 2022 can be sold tax-free from 1 January 2028. The five years are counted from the end of 2022, not from the date of purchase.

Inheritance and gifts

For a property received as a gift, the period is counted from the end of the year in which the gift was made. For an inheritance - from the end of the year in which the deceased acquired the property. Thanks to this rule, many heirs can sell an inherited apartment tax-free as soon as the inheritance matters are settled.

How much is the tax?

The tax is 19% of the income. Put simply, the income is the difference between the revenue and the costs:

  • revenue - the sale price less the costs of the sale, such as the agent’s fee or notary costs paid by the seller;
  • costs - the documented purchase price and expenditure that increased the property’s value, such as a renovation supported by invoices.

For an inherited or gifted property, the costs may include, among other things, the inheritance and gift tax paid on that property.

The housing relief

Even if the sale takes place within five years, the income can be tax-exempt if the proceeds are spent on your own housing needs within three years, counted from the end of the year of the sale. This includes, for example, buying another apartment or house, building a house or repaying a loan taken out for these purposes.

The exemption is proportional: if half of the revenue is spent on housing needs, half of the income is exempt. The detailed conditions of the relief are set out precisely in the regulations, so it is worth consulting a tax adviser when planning to use it.

Filing

A sale within five years is reported on the PIT-39 tax return, filed by 30 April of the year following the sale. The intention to use the housing relief is also declared there. The return must be filed even if no tax is ultimately due - for example thanks to the relief or when the property is sold at a loss.

The buyer pays too - but a different tax

On the secondary market, the buyer pays the tax on civil law transactions (PCC) - 2% of the market value, collected by the notary when the deed is signed. People buying their first apartment or house may be exempt. On the primary market there is no PCC - VAT is included in the price.

Before you sign

If the five-year period is about to end, it may be worth setting a later date for the notarial deed - a preliminary agreement lets you plan it in advance. In more complex situations - co-ownership, a division of assets or a property connected with a business - it is wise to consult a tax adviser. We are happy to help plan the timeline of the transaction so that it takes these questions into account.

This article describes the general rules for private individuals, is for information only and does not constitute tax advice.