Poland is considering property tax reform based on property values rather than square footage to address current system inequities.
Current System Inequities
The current property tax system is unfair because it’s based on square footage rather than property value. As square meter prices increase, people with small premium investment apartments in big cities pay minimal taxes, while those with large properties in poor condition and unfavorable locations pay higher amounts. It’s absurd that a single-family house with outbuildings in the countryside is taxed higher than an apartment in central Warsaw.
Benefits of Progressive Taxation
Introducing a progressive property tax would mean higher taxes for more valuable properties. This would discourage excessive money allocation in housing. In Poland, property investments are preferentially taxed compared to other capital allocations, which should be limited, especially for larger investors with five, seven, or ten apartments.
Public Perception of Taxes
Taxes always evoke negative emotions as they burden household budgets. We often don’t feel that collected money is well-spent. More than in countries like Sweden, taxes in Poland are perceived as a form of tribute, especially when talking about direct taxes. We feel them more strongly than VAT.
Addressing Tax Concerns
However, concerns about property tax stem from myths surrounding it. The first myth is that it would be a new tax significantly burdening owners of expensive apartments or multiple properties.
