Usable area for tax purposes

Every building, the whole building inside area should be measured in accordance with the Act on Local Taxes and Charges, and the measured value should be reported to a district/local authority. The following are excerpts from the most important articles from the Act.

Usable area of a building or its parts

Article 1a point 5) the usable area of a building or its parts – the area measured on the inside wall length on all levels, apart from staircase areas and elevator shafts; underground garages, cellars, basements and usable attics are also considered levels;

A comment: the only problems are levels, staircases, elevator shafts, underground garages and usable or unusable attics, because those terms are not defined in Polish law (Construction code law or other acts and regulations). Let’s consider usable and unusable attics. I, as a geodesist measuring those areas, apply the following rules: an unusable level (attic) is a level with a “thin floor”, which is dangerous to walk on. It’s also a level that can be accessed only by a ladder (there are no permanent stairs). Heights don’t matter here, since the area is reduced anyway because of the height (the limits are 140cm and 220cm). A next, less important rule is the presence of lighting, heating, water or e.g. windows. The measurement team considers the results of the two first factors and determines whether the attic is usable or unusable. After many years, when I searched through court judgments, I found a confirmation of the rules I use:

Judgment of the Regional Administrative Court (Wojewódzki Sąd Administracyjny) of 22/06/2005 Act signature II SA/Wa 916/05

“It seems natural to reach for the Construction code law and implementing regulations first, especially for the ordinance on the technical conditions that buildings and their positioning should meet. That’s why the level definition, introduced by § 3 point 16 in the ordinance, is binding in this case; it emphasizes the fact that an attic needs to be purposed for human residence for it to be recognized as an individual building level” – controversial, if not nonsense – it lacks the second part of the level definition, where a technical floor with average height above 2m also can be a level, as well as a storage floor – this is controversial as well.

Judgment of the Supreme Administrative Court (Naczelny Sąd Administracyjny) of 12/08/2014 Act signature II FSK 1715/12

– The Supreme Administrative Court rejected the understanding of the level in accordance with § 3 point 16 in the ordinance, and gave it a dictionary meaning. Because the Act doesn’t give a definition of a “level”, we have to take it from a Polish language definition, so all levels

– For a usable attic to exist there is a “need for a communication route, which allows access to areas in such understanding on all levels, for the purpose of utilizing it” – congratulations, someone’s smart

We pay a tax for an attic even if it is: not insulated, has no connection to utilities, is not finished – an individual interpretation of tax law by the President of Cracow of 09/12/2013 (PD-01.3120.8.19.2013.GK)

You see, dear Reader, how many problems and judgments have to be studied to determine whether something is a usable attic or not. It’s the same with every mentioned element that is not a subject to property tax.

Which areas are subjects to taxation?

– 2. point 1) The following properties or construction works are the subjects to property tax:

1) lands;

2) buildings or their parts;

3) constructions or their parts connected with commercial activity.

– 4. point 1) …for buildings or their parts – the usable area…

– 4. point 2) The areas of rooms or their parts and level parts with height from 1.40 to 2.20 m are included in the usable building area in 50%, and if the height is lower than 1.40 m the area is excluded.

The Act on Local Taxes and Charges of January 12th 1991

– measurements are performed within the finished walls

– measurements are performed on the floor level

– we don’t pay taxes for:

    – staircases

    – shafts without floors

    – unusable attics (problematic, they are not defined in Construction code law or in other legal regulations)

    – plastered walls

    – areas with height below 1.40m, between 1.40 and 2.20 in 50%

A comment: we measure on the floor level – and what about socles or baseboards, are they excluded? According to the Polish Committee for Standardization, if a socle’s height is higher than a doubled height of a stair step (30cm), we measure to the lowest element of this “not socle”. Walls, partition walls (drywalls, aluminum profiles), wall coverings (they don’t have to be the full height of the wall like in the German GIF Standard) are excluded from the taxed area.

The difference between the level’s gross area (raw building condition, this gross lease area coming from the BOMA Standard) and the area for property tax purposes for a level in the finished state will result in about 7% difference.

A forgotten property tax

The Act on Local Taxes and Charges of January 12^th 1991, property tax:

Article 4 point 1.3) for buildings or their parts connected with commercial activity, without prejudice to Act 4-6 – the value spoken about in income tax law, determined on January 1^st of the tax year, constituting a base for calculating that year’s depreciation, not reduced by depreciation charges, and in cases of fully depreciated buildings – their value from January 1^st of the year of the last depreciation charge.

The following are classified as non-building structures:

– roads, pavements

– hardened places

– lighting, terrestrial and underground installations

– fences

– and other

Copying an article or its parts without the author’s permission is prohibited

Author: Adrian Hołub

Translation: Julia Pająk

Contact

 Monika Hołub

Co-owner Polish Geodetic Group

szkolenia@geodezyjny.com

Tel.: +48 785 041 07

 Adrian Hołub

Co-owner Polish Geodetic Group

adrian.holub@geodezyjny.com

Tel.: +48 608 577 042

Measure it soon!