Katowice has taken a radical step against property developers by increasing the property tax on unsold residential units by as much as 30 times. City officials argue that if a flat is not being used for residential purposes and remains in the developer’s portfolio, it should be treated as a business asset rather than an ordinary dwelling.
From Preferential Rate to Maximum Levy
Until now, developers paid the standard residential rate of PLN 1.19 per square meter on unsold flats. Under the new rules, the city is applying the much higher business property rate of PLN 34 per square meter.
The difference is stark:
- A 50 m² apartment previously generated an annual tax of about PLN 60.
- Now, the same unit will cost PLN 1,700 per year.
For developers holding dozens of unsold units, the total burden could rise into the tens or even hundreds of thousands of zloty annually.
Legal Basis and City’s Justification
City officials cite a ruling by the Supreme Administrative Court (NSA) from autumn 2024, which confirmed that municipalities may apply higher tax rates to residential properties not being used for housing purposes.
According to Katowice, such units can function as show apartments or be maintained as part of the developer’s business operations. In this context, the city argues, there is no justification for granting them the same preferential tax treatment as owner-occupied homes.
Developers Push Back
The real estate development industry has reacted with anger, warning that the measure will further strain a sector already grappling with slowing sales, rising construction costs, and higher financing expenses.
Bartosz Krawczak of the Polish Association of Developers told Gazeta Wyborcza that companies plan to appeal the city’s decision.
“This is not a situation developers will accept calmly. Companies will definitely be filing appeals against the Katowice authorities’ decision,” he stressed.
Broader Implications
Property tax is a local levy set by municipalities, though the state determines the maximum rates. Katowice’s decision could set a precedent for other Polish cities facing large inventories of unsold developer units and looking to boost local revenues.
For developers, this creates a new financial risk. If other municipalities follow Katowice’s lead, unsold apartments could become a heavy cost burden, potentially forcing price reductions or prompting developers to rethink their investment strategies.
