Poles have begun interpreting the housing tax relief far too broadly, increasingly using it to avoid tax on investment properties. As of the beginning of next year, the Ministry of Finance plans to restore the original intent of the regulation — supporting individuals who are genuinely meeting their own housing needs.
Back to the original mission
In recent years, apartments in Poland have often been treated not as places to live, but as speculative financial assets. Many people bought properties with the intent to resell quickly at a profit — benefiting from housing tax relief due to a favourable interpretation that developed over time.
To avoid paying income tax, it was enough to declare that the property was purchased “for one’s own residential purposes”. However, the legislation never clearly defined what that actually meant — and this loophole was widely exploited.
“The original goal was to support people genuinely improving their housing conditions, not participants in speculative investment markets,” says legal advisor Katarzyna Siwiec. “Yet today many buy apartments to rent out or flip, and still claim the relief simply by declaring the property as their residence. In practice, moving in for just a week was enough to qualify. Some even benefited while owning multiple properties.”
This mechanism became a common method of avoiding the 19% capital gains tax — prompting the government to introduce reforms that will restore the real purpose of the relief: supporting people who truly need housing to live in.
What will change?
Under the new proposal, the housing tax relief will still exempt income from property sales — but only if the seller does not own another residential property.
“If someone owns more than one apartment, they will still be eligible, but only if — within three years of the sale — they donate the other property to their children, grandchildren, the State Treasury or the municipality,” explains Siwiec.
For example:
If someone sells an apartment but still owns another rented investment property, they will not qualify for the tax relief — unless they donate the second apartment within three years (e.g. to a child or grandchild).
Exceptions — when the relief will still apply
Certain types of property ownership will not count as “having another residence”, including:
- property inherited through succession,
- one residence held under marital joint property,
- co-ownership shares below 50%.
“The aim is not to penalise those who inherited an apartment or own a small minority share,” clarifies Siwiec. “The intention is simply to stop treating the relief as a tax loophole for property traders. In justified cases, the relief can still apply — but the tax office will verify donations very carefully.”
It is worth noting that under current law, selling a property after five years of ownership is already tax-exempt (PIT Act, Art. 10). The housing relief only applies to earlier sales, provided the funds are used for one’s own housing needs.
Who benefits — and who loses?
“These are both fiscal and corrective changes,” says Siwiec. “They restore the original intent — helping people who are genuinely meeting their personal housing needs. The change in language — from ‘for housing purposes’ to ‘to satisfy one’s own housing needs’ — makes that crystal clear.”
The biggest losers:
- property investors
- “flippers” reselling apartments for profit while avoiding tax
Those who will keep the relief:
- people selling one home to buy another to live in,
- individuals who inherited a home and do not own another property.
The government expects the reform will discourage speculative property trading and reduce market overheating.
When will it take effect?
The bill is currently in public consultation. The Ministry of Finance intends for the new rules to enter into force on 1 January 2026 — meaning Parliament must adopt the law, and the President must sign it by the end of November.
