The housing taxation will increase 5 times. A circumstantial date has expired

In fresh months the real property marketplace in Poland has gained fresh dynamics, which raises both hopes and concerns. Information about the planned five-fold increase in housing taxation has sparked lively discussions and speculation. Faced with rising housing prices, many wonder what the consequences will be for property owners, possible buyers and the marketplace as a whole. In this article, we will examine various aspects of this problem in order to aid us realize what the future may be.

Increase in housing prices

Housing prices in Poland have been rising at an alarming rate for respective years. According to data from the Central Statistical Office, in 2023 the average price per square metre in large cities increased by 10% compared to the erstwhile year. The main causes of this increase are:

• Housing shortage: Many cities deficiency fresh housing investments, leading to an increase in the prices of existing properties.
• Increase in construction costs: The rising prices of construction materials and labour importantly influence the costs of implementing fresh projects.
• Monetary policy: Low interest rates favour mortgage borrowing, which increases housing demand.

Demand and supply

In the real property market, request importantly exceeds supply. In particular, in large cities specified as Warsaw, Kraków or Wrocław, the number of available apartments is not keeping pace with the increasing demand. As a result, possible buyers are forced to compete for a limited number of properties, which further drives price increases.

Planned increase in housing tax

Increase details

The government announced that the housing taxation would be increased 5 times. Currently, the rate of property taxation is about PLN 0,50 per square metre per year. After the planned increase, this rate will increase to PLN 2.50 per square metre. For owners of large properties, this means a crucial increase in the cost of living.

Increase Themes

The main reasons for this decision are:

• Increase in budget revenue: The taxation increase aims to increase the budget gross that may be allocated to the implementation of crucial public projects.
• Stimulating the rental market: A higher taxation can discourage owners from holding empty apartments, which in turn can increase the number of properties available in the rental market.
• Valorisation of taxes: The current rates of property taxation are comparatively low compared to another European countries. The aim of the increase is to bring them into line with another European Union countries.

Consequences for property owners

Increase in maintenance costs

For many property owners, a taxation increase means a crucial increase in the cost of living. People with large apartments or houses can feel it most. For example, the owner of an flat of 100 square meters will gotta pay PLN 250 per year alternatively of the erstwhile PLN 50.

Possible marketplace reactions

The taxation increase may prompt any owners to sale their properties, which could increase supply on the marketplace and possibly inhibit price increases. However, this may besides lead to an increase in rental prices as owners will effort to transfer additional costs to tenants.

Consequences for the real property market

Short-term effects

In the short term, a taxation increase may make any confusion on the market. It is possible that any property owners will effort to rapidly sale their apartments before fresh rates enter into force. This in turn can lead to a temporary increase in supply and price stability.

Long-term effects

In the long term, higher maintenance costs can lead to changes in the structure of the real property market. We can expect:

• Decreases in emptyness: A higher taxation may discourage the holding of empty apartments, which will increase the number of properties available on the market.
• Changes in buyer preferences: possible buyers can more carefully analyse the cost of maintaining the property, which may affect the preferences regarding the location and size of housing.
• Impact on the rental market: Higher maintenance costs can be transferred to tenants, which will increase rental prices, especially in large cities.

Summary

The planned five-fold increase in housing taxation is simply a decisively controversial decision which can importantly affect the real property marketplace in Poland. In the face of rising housing prices, the additional financial burden for property owners may have wide consequences. A key challenge will be to find a balance between expanding the budget gross and minimising the negative impact on the real property marketplace and households. Time will show how the marketplace will respond to these changes and what their long-term effects will be.

How to prepare?

For property owners and those planning to buy an apartment, it is crucial to carefully analyse their finances and prepare for possible changes. Here are any tips that can help:

1. Home Budget Review: An estimation of how an increase in taxation will affect monthly spending and planning any savings.
2. Consultation of the Financial Advisor: Consult the expert to measure different scenarios and prepare a strategy for financial management.
3. Market tracking: Current monitoring of the real property marketplace to respond rapidly to changes.

The emergence in housing taxation is only 1 of the many factors affecting the real property market. Keep up to date and prepare for the future to minimise risks and maximise opportunities.