Polish taxpayers who benefited from mortgage interest relief between 2002 and 2006 may need to adjust their tax returns if their bank has refunded interest payments.
Mortgage Interest Relief and Refunds
Taxpayers who took out a mortgage between 2002 and 2006 were eligible for mortgage interest relief. If a bank now returns interest paid, the tax relief must be corrected.
Acquired Rights to Interest Relief
The right to interest relief, based on acquired rights, applies to individuals who entered into a mortgage agreement for residential purposes between January 1, 2002, and December 31, 2006. These taxpayers can still deduct expenses related to interest payments from their income.
What Happens with Settlements or Loan Invalidations?
If a taxpayer reaches a settlement or a loan is invalidated, and the bank has previously refunded interest, the relief must be returned.
Returning Interest Relief After Settlement or Loan Invalidation
In such cases, the relief must be repaid. It doesn’t matter if some of the calculations have already passed the statute of limitations. Prior tax returns do not need to be corrected, nor are there any penalties for late payment of taxes. The refunded amount must be declared as income in the tax return for the year the refund was received.
Individual Tax Information Confirms the Procedure
Numerous individual interpretations from the National Fiscal Information (KIS) confirm this, such as interpretation No. 0112-KDIL2-1.4011.11.2026.1.TR dated April 2, 2026.
Case Study: Loan Invalidated in 2025
A man who entered into a mortgage agreement in 2006 deducted interest relief in his annual PIT returns from 2008 to 2020. In July 2025, the court declared the agreement invalid, and the bank refunded his paid interest.
KIS Director Confirms Income Inclusion
The KIS director confirmed that he must include the refunded amount in his income for 2025, citing Article 45(3a) of the PIT Act. This article states that if a taxpayer deducted amounts from income or tax and then received a refund, they must include the previously deducted amounts in the tax return for the year the refund was received.
KIS Interpretation: Refunds Declared in the Year of Refund
The KIS emphasized that the refund of interest must be declared in the tax return for the year it occurs. The provision also clarifies that the taxpayer who previously deducted the refunded amounts is responsible for making the adjustment.
Further KIS Interpretations
Similar rulings were made in interpretations dated, among others: