Real estate tax 2025 – key changes

A significant amendment to the Act on Local Taxes and Fees came into force from 1 January 2025. This amendment aims to clarify the definitions of the key terms – ‘building’ (budynek) and “non-building structure” (budowla) – without having to refer to regulations outside the tax law. In addition, the legislator has clarified the catalogue of objects classified as non-building structures, taking them into account directly in the tax regulations.

New definition of a building

Under the current regulations, a building is a structure that meets the following conditions:

• it has been erected as a result of construction works;
• it has installations that enable it to be used for its intended purpose;
• it is permanently attached to the ground;
• it is separated from the space by building partitions; and
• it has foundations and a roof.

At the same time, the new regulations exclude from this definition any structures intended for the storage of loose, chunky, liquid or gaseous materials, in which the capacity is the basic technical parameter determining its purpose.

These changes are aimed at increasing the precision of the tax provisions, which should contribute to their uniform interpretation and facilitate their application for both taxpayers and the administrative authorities.

New definition of a non-building structure – key changes in real estate tax 2025

The amended Act on Local Taxes and Fees precisely defines what structures qualify as non-building structures. Pursuant to the new regulations, non-building structures are:

• Structures, other than buildings, listed in Schedule 4 to the Act on Local Taxes and Fees, including installations to enable them to be used for their intended purpose.
• Power plants – wind, nuclear, photovoltaic and biogas plants, as well as energy storages, boilers, industrial furnaces, cableways, ski lifts and ski jumps – with only the construction parts being considered non-building structures.
• Building fixtures, such as connections and technical installations, including those for the treatment or collection of waste water, if they are directly related to the building or non-building structure and are necessary for its use.
• Technical installations that do not fall into the above categories – but only insofar as their building parts are concerned.
• Foundations for machinery and technical equipment, if they are technically separate elements of the utility structures.

Importantly, these objects are deemed to be constructions provided that they have been created as a result of construction works, even if they form part of a structure not included in the Act on Local Taxes and Fees.

Ambiguities in the definition of a non-building structure and the issue of permanent attachment to the ground

Despite the introduction of the new regulations, the provisions still do not clearly specify which elements of the indicated structures are to be considered as construction parts. This gives rise to interpretation doubts that may lead to further tax disputes.

An even greater problem remains the definition of permanent attachment to the ground, which has been controversial for years. The amendment introduces a new interpretation of this concept, according to which permanent attachment means a building object being attached to the ground in a way that ensures its stability and resistance to external factors independent of human actions. This criterion is intended to prevent the destruction, displacement or movement of the object to another place.

According to the new regulations, in the case of container facilities, antenna masts, billboards, advertising devices, outdoor lighting, industrial installations and technical equipment, only those that meet the condition of being permanently attached to the ground will be taxed as non-building structures.

New approach versus existing case law

The new definition of permanent attachment to the ground differs significantly from the previous interpretation, which is well-established in the case law of the administrative courts. Previously, permanent attachment was considered to mean the possession of foundations set below ground level and a close, stable, rigid attachment between the structure and these foundations. Nowadays, the criterion of resistance to external factors has become crucial, which may lead to divergent interpretations in tax practice.

The changes were introduced to tidy up the regulations and standardise the application of tax law. However, the lack of unambiguous guidelines with regard to the construction parts of non-building structures and the new, not entirely precise criterion of permanent attachment to the ground, may still be the subject of disputes between taxpayers and tax authorities.

New classification of non-building structures in real estate tax 2025

The amended Act on Local Taxes and Fees clarifies the catalogue of non-building structures. It includes, among other things, sports facilities such as amphitheatres, stadiums and outdoor sports facilities. Non-building structures also include elements of water and sewage infrastructure, including storage reservoirs, process halls and equipment wastewater treatment plants, such as settling tanks, biological reactors and pumping stations.

Storage facilities designed for the storage of bulk, liquid and gaseous materials are also considered as non-building structures if their key parameter is capacity. The amendment also covers road and rail infrastructure, including roads, entrances, parking bays and railway tracks with technical elements. Non-building structures also include dams, locks and dikes, as well as telecommunications and electricity infrastructure, including antenna masts, cable lines and water pipes.

Elements of ports and airports, such as harbours, piers, breakwaters, runways and aprons, as well as bridges, viaducts, tunnels, fences and landfills, are also included as non-building structures. The new regulations also cover freestanding billboards, industrial installations and specialised non-building structures such as cooling towers, railway scales and ski jumps.

Although the new classification is intended to make the rules easier to interpret, doubts may still arise, especially regarding the concept of permanent attachment to the ground, which could lead to further tax disputes.