First general interpretation of real estate tax in years

On December 1, 2025, the Minister of Finance and Economy issued a general interpretation[1] regarding real estate tax, which concerns the understanding of the concept of land, buildings, and structures related to business activity. The meaning of this phrase is decisive in determining which tax rate to apply. It is important to be aware that adopting an unjustifiably high rate, i.e., unnecessarily high, may lead to a 30-fold increase in the property tax paid.

Property tax for entrepreneurs

Land, buildings, and structures related to business activities should be understood as real estate and facilities owned by an entrepreneur or other entity conducting business activities (with a few exceptions, e.g., residential buildings). This provision seems quite clear, but in practice its application may raise doubts, which the Minister of Finance and Economy [hereinafter: MF] attempts to answer in a general interpretation.

As indicated in the interpretation, the fact that an entrepreneur or other entity conducting business activity owns land, a building or a structure, without taking into account its status and the nature of its business activity, may not be sufficient to recognize the connection between these objects subject to real estate tax and business activity. Taxpayers are then faced with the dilemma of whether they are overpaying or underpaying tax, depending on the tax rate applied.

What rates to apply to sole proprietorships

One of the ambiguities is the situation where the taxpayer acts in a dual role, i.e., as an entrepreneur and as a private individual. This case applies to natural persons conducting business activity, where a distinction can be made between land, buildings, and structures related to this activity and those that constitute their personal property used for purposes other than business activity. As indicated by the Ministry of Finance, in such a situation, the higher tax rate applies to those items which (1) are used or (2) may be used to conduct business activity, even if they have not been entered in the entrepreneur’s fixed asset register.

The Ministry of Finance considers items that are actually used to conduct organized gainful activity, performed on one’s own behalf and on a continuous basis, to be (1) used for business purposes. As regards (2) potential use, according to the interpretation, this will be determined by the entrepreneur’s activities aimed at preparing, maintaining, or securing land, buildings, or structures for future or interrupted business activities and incurring expenses related to these activities that are considered tax-deductible costs.

What to do if we also conduct activities other than business activities

Another situation described in the interpretation that may raise doubts concerns taxpayers who, in addition to business activities, also conduct other activities, e.g., agricultural activities, in which they use land, buildings, and structures. The Ministry of Finance indicates that in such a situation, similarly to natural persons conducting business activity, only those land, buildings, and structures that are (1) actually used or (2) may be used in business activity will be subject to real estate tax at higher rates.

Rental, lease and tax rates

The last case covered by the general interpretation is the situation of taxpayers who do not conduct business activity themselves, but, for example, rent or lease their land, buildings, and structures to a person conducting such activity. In the opinion of the Ministry of Finance, such a situation will mean that the taxpayer will have to apply higher property tax rates only in the event of (1) use or (2) the possibility of using the taxable items as part of the business activity conducted by the lessee/tenant.

Why the general interpretation is also important for companies

In business practice, the cases described in the general interpretation occur quite often, especially in the case of sole proprietorships. However, it is worth noting that entrepreneurs operating in the form of commercial law companies should also take into account the position of the Ministry of Finance presented in the interpretation in question. This is because MDDP’s experience shows that the interchangeable use by such taxpayers of the terms related/occupied with business activity often leads to the declaration and payment of excessively high property tax. This may apply to real estate which, for various reasons, is not actually used for business purposes at a given moment (e.g., buildings leased to organizations or individuals, unused land). However, in exceptional cases, the preferential tax rate may even apply to real estate that is used for the business activities of a given company. These cases confirm the truth that details matter and that without in-depth knowledge not only of the regulations but also of the practice, it is impossible to correctly settle real estate tax.

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If you have any doubts as to whether you are applying the correct property tax rates, please contact MDDP’s experts. Our experts will provide comprehensive answers to your questions and advise you on how to safely correct your tax return or help you recover overpayments.

[1] Dz.Urz.MFiG.2025.40 z dnia 2025.12.01.