Poland’s National Revenue Information has confirmed that home renovations funded by family members for a property they inhabit do not constitute a taxable donation for the legal owner of the building.
Family Renovation of a Mother’s Property
A homeowner sought a formal tax interpretation regarding the renovation of her single-family house, which is being funded by her daughter and son-in-law. The couple occupies a specific part of the building under a written loan-for-use agreement and plans to renovate the upper floor, including the replacement of the roof structure and covering.
Funding and Documentation Details
While the building permit for the project was issued in the mother’s name as the legal owner, the daughter and her husband are financing the works entirely from their own income. Invoices for construction services and materials are issued to the couple as the parties actually funding the renovation, and all payments are made directly by them.
Tax Authority Declares No Donation Liability
The Director of National Revenue Information ruled that financing a renovation under these circumstances does not constitute a donation under the Act on Inheritance and Donation Tax. The authority determined that such an arrangement involves neither the acquisition of cash nor the acquisition of property rights by the homeowner.
According to the ruling, a donation requires a donor to provide a benefit at the expense of their own assets without receiving an equivalent in return. In this case, the tax office agreed with the owner that no tax obligation arises, as the act of family members paying for improvements to the space they occupy does not meet the legal criteria for a taxable gift.
