Is it a construction or a building? Property tax changes are causing chaos

The new regulations on property tax in force since the beginning of 2025, although largely responding to the postulates submitted by entrepreneurs, still leave a lot of room for interpretation as to what can be considered a building and what a structure. This, in turn, raises serious doubts as to the amount of the tax. - I would expect the Ministry of Finance to listen to the postulates regarding the clarification of the regulations and in the next six months, maybe at the beginning of the next year, to introduce several amendments - emphasizes Dr. Adam Kałążny from Deloitte.

- The new rules on property tax, which have been in force since the beginning of 2025, are significant changes in the way property tax is settled. Until the end of 2024, the provisions of the construction law played an important role in determining what is subject to property tax. This has changed - since the beginning of this year, we have completely new definitions of what a building and structure is, we have an annex that specifies in quite detail the scope of the subject matter of property tax - Paweł Banasik, partner and leader of the property tax team at Deloitte, reminds the Newseria agency.

The amendment to the property tax regulations introduces clear definitions of buildings and structures, which no longer refer to construction law. According to the new regulations, a structure is a structure made (and not erected, as before) using construction products listed in the annex to the Act. This also includes installations and devices, if they constitute a technical and utility whole together with the structure. A building, in turn, can be a structure that meets four conditions: it was erected as a result of construction works, it is permanently attached to the ground, separated from space by building partitions, it has foundations and a roof. A structure that is used to store bulk, liquid, gaseous or piece materials, if its function is determined mainly by capacity, no longer has the status of a building (e.g. silos or elevators).

- The benefits of the new property tax rules are a clearly defined list of the subject of taxation. There is always a certain scale of grey in such changes, but the scope of subject matter of taxation is defined slightly differently. We do not have reference to construction law, which, however, is governed by other laws, so there is a greater chance that the new regulations will be more transparent - explained the leader of the property tax team at Deloitte during the 9th edition of the Lewiatan Confederation Tax Council Congress.

The amendment is a response to the Constitutional Tribunal's judgment of 2023, which found the current tax regulations regarding the definition of a building to be unconstitutional. This issue has been the subject of legal disputes for years - often only administrative courts would decide whether a given object should be classified as a building or structure, or whether it is not subject to taxation at all. The amendment to the Act on Local Taxes and Fees was intended to sort out these issues.

- The new regulations do not allow for a one hundred percent determination, without any doubts, of what is subject to taxation. Importantly, this division between buildings and structures is still not entirely clear. It also seems that an aspect that may be problematic in the long run is the issue of taxation of internal building facilities or some installations, technical devices. I assume that administrative courts will also play an important role in the interpretation of these regulations - assesses Paweł Banasik.

According to experts, some regulations may depend on interpretation. This concerns, for example, the concept of "permanent connection with the ground", which is one of the conditions for recognizing a building. This means that a building is connected to the ground in a way that provides it with stability and the ability to counteract external factors that may destroy it, cause it to move or shift.

- The definition itself is not very precise and it is not entirely clear how to understand this permanent connection with land, which is important because whether or not a given object is permanently connected to land often determines whether it is subject to taxation at all. This applies in particular to container objects or tent halls, i.e. objects that are very often used in today's economic reality in industrial plants or logistics - notes Dr. Adam Kałążny, legal counsel and associate partner at Deloitte.

For example, the definition of a construction device may also be unclear, where it refers to "other technical devices" that are directly related to a building or structure and necessary for their proper use in accordance with their intended purpose. This may mean taxation of, for example, various technical devices that have not been taxed so far.

During the work on the act, entrepreneurs requested a more precise definition of the term "free-standing, permanently connected to the ground industrial installation". Such a formulation is very broad, it may include, for example, all sets of devices located on the premises of industrial plants.

- The issue of taxation of various types of tanks would require clarification. The legislator has introduced some clarification compared to the previous legal status, but it is still not entirely clear how to treat, for example, process tanks in industrial plants under property tax. These are multi-million objects and their taxation arouses great emotions among entrepreneurs, because it can cause major financial problems on their side - says Dr. Adam Kałążny.

According to the expert, although the new regulations largely respond to the demands of entrepreneurs, some of them still leave room for interpretation.

- This is only a step in the right direction, but we are still far from the finish line. I would expect the Ministry of Finance to be open to listening to these postulates regarding the clarification of the regulations and in the next six months, maybe at the beginning of next year, to introduce several amendments that would make these regulations more understandable and unambiguous - emphasizes the legal counsel and associate partner at Deloitte.

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