Real Estate Tax Audits – What Are the Risks and How to Avoid Them?

Submitting the real estate tax return for 2026 on time does not necessarily mean that entrepreneurs can archive their tax settlements. New regulations, which from the beginning of 2025 have changed the meaning of terms such as “building,” “structure,” “construction object,” and “construction works,” are starting to significantly shape the more restrictive approach of tax authorities. 

This increasingly means that entrepreneurs must submit detailed explanations and, in many cases, be required to pay overdue taxes along with interest. 

Audit Procedures in Real Estate Tax 

Audit procedures are the stage at which taxpayers should present all available materials and data proving the correctness of the tax calculation based on the real estate tax return DN-1 or the IN-1 information form. It is important to note that attempts to conceal unfavorable facts for the taxpayer may be quickly uncovered. Authorities already have access to: 

• • data on real estate transactions,  

• • data on issued construction permits,  

• • information from land and building registries,  

• • aerial and satellite photos of the area (including archival materials).  

Real Estate Tax – Full Access to the Fixed Asset Register by the Tax Authorities 

Additionally, starting in 2027, tax authorities will gain full access to the fixed asset register of individual businesses through the implementation of the JPK_ST_KR reporting scheme, which will include information about the name, initial value, modernizations, and decommissioning of individual buildings and structures. 

Given this, it becomes especially important to prepare in advance and have full knowledge of the risks associated with the adopted real estate tax settlement principles. Issues that are easy to correct in the current period, but are uncovered by officials after several years result not only in the need to pay overdue taxes with statutory interest for all non-prescribed years, but also pose potential consequences for those responsible in the company for tax settlements, as per the Penal Fiscal Code (k.k.s.). 

When Does the Risk of Real Estate Tax Audits Increase? 

The risk of  real estate tax audit settlements increases when, despite the amendments to the regulations from the beginning of 2025, taxpayers have not changed the declared tax bases or, for the first time, included in the return properties that were created many years earlier.

Tax authorities typically find explanations from entrepreneurs unconvincing when they claim that until the end of 2024, disputed objects were not subject to tax, especially when this concerns street lights, container buildings, tent halls, or weighbridges. Such actions increase the likelihood of initiating a tax audit and related costs and burdens. 

In light of the regulations that came into force in early 2025, entrepreneurs should consider the risks associated with challenging their filed returns, including the need to adapt settlements to the current interpretative approach and court rulings. Over the coming years, further increases in tax authority activity are expected, including more checks and audits, which means taxpayers will need to systematically analyze risks and respond accordingly. 

Real Estate Tax Advisory – How MDDP Experts Can Help 

In this context, support from MDDP experts will significantly reduce the risk of negative consequences arising from actions taken by tax authorities. In terms of proactive actions, MDDP offers, among other things: 

• • Comprehensive tax reviews and asset inventories that help verify the correctness of object classifications and identify potential risk areas arising from changing regulations and tax authority practices.  

• • Analysis of documentation, including the fixed asset register, land and building registry excerpts, and construction documents, to identify errors or simplifications that could lead to the questioning of settlements by tax authorities.  

• • Preparation and verification of tax return corrections and tax explanations, representation the taxpayer in tax and court proceedings, and assist with requests for individual tax rulings to confirm the adopted approach.  

Constant monitoring of changes in regulations, interpretations, and case law, as well as active advisory on tax risk management, with the support of MDDP, will allow you to build an appropriate tax strategy and minimize the negative consequences of potential tax audits. 

Should you have any questions or concerns, MDDP experts are available to assist you.