Relief for thermal modernization of the house. Minister of Finance with new explanations

The relief for thermal modernization of a house is in force for the seventh year, has grown in interpretations and rulings, and has been published many times. Is everything clear now? Apparently not, because the Minister of Finance has just issued another (third), this time 22 pages long (the previous ones were shorter), explanations.

Let us recall that the thermal modernization relief consists of deducting expenses for ecological home heating from income (this is the case for those who settle according to the scale and pay flat tax, while flat-rate taxpayers write off expenses from income). Thanks to this, we reduce the tax base and end up with a lower tax. The maximum amount of the deduction is PLN 53,000.

Relief for home thermal modernization – what can be deducted from income?

A detailed list of investments that are eligible for a deduction is included in the regulation of the Minister of Investment and Development specifying the types of building materials, equipment and services related to the implementation of a thermal modernization project. Changes were introduced to it from 1 January 2025. The latest explanations take them into account.

What has changed in the catalogue? The deduction for a gas or oil boiler (together with the control, safety and regulation fittings and the air supply and exhaust system) has been eliminated. In 2025, we will no longer deduct the costs of their purchase and installation. Gas and oil tanks have also been removed from the list.

The list includes a deduction for the purchase and installation of a heat pump (and the infrastructure necessary for its operation), but a condition has been added that it must be part of an installation used for heating rooms or preparing domestic hot water. The same applies to a connection to a heating or gas network. It is still in the catalogue, but a condition has been added - the deduction is only available if the network uses biogas or biomethane as an energy source.

The list has been expanded to include energy or heat storage facilities, along with the infrastructure necessary for their operation, and energy management systems. As well as their assembly services. Preference is also given to a heating substation with a temperature programmer and, from January 1, 2025, an automatic weather control system.

The list of investments eligible for the tax relief also includes materials used to insulate balcony slabs and roofs, as well as roof insulation services. As well as the purchase and installation (the replacement had already been carried out earlier) of external doors.

Relief for thermal modernization of a house. Can expenses incurred before the formal completion of construction be deducted?

The Minister of Finance also addressed the highly controversial issue of expenses incurred before the formal completion of construction. In the past, the tax office claimed that such expenses were not eligible for relief (even if the house was already in use by the owner). Since 2023, officials have been changing their interpretations in favor of taxpayers and indicating that the construction law does not exclude the recognition of a building as a building that has not been formally put into use. This is what the Minister of Finance wrote in previous explanations (issued in 2023). In the latest, we read: "The provisions of the Personal Income Tax Act do not absolutely require the taxpayer to have a document confirming consent to use the building (decision/notice on completion of construction resulting in tacit consent to its use). This applies to both long-term and newly constructed buildings."

The Minister emphasizes that for the purposes of the relief, it is enough for a single-family residential building to actually exist and have certain features, including meeting housing needs. "Confirmation of its existence may be both the aforementioned decision on the occupancy permit, as well as a document confirming payment of property tax for this type of building (e.g. a decision issued in this matter)" - we read in the explanations.

Is this the end of doubts? No, because the issue of deducting expenses incurred before the formal completion of construction will be addressed by the Supreme Administrative Court, composed of seven judges.

Until when can you correct your PIT return?

The Minister of Finance also writes (this was not in previous explanations) about the possibility of filing a correction of the return by those who were entitled to relief but did not use it. He reminds that the tax liability expires after 5 years, counted from the end of the year in which the tax payment deadline passed. "Therefore, until the end of 2025 and the end of 2026, you can return to the settlement for 2019 and 2020, respectively," we read in the explanations.