Do you know – what kind of area are you paying taxes for?

To start with, it is worth mentioning that measurements for tax purposes and measurements for lease purposes each have their own, different rules. This article is dedicated only to measurements for tax purposes. The only regulated by norms area measurements in Poland  are those used for calculating building (or building parts) taxes, or the area of a property that is later put in the notarial deed at the moment of purchase. Two laws can be mentioned here – the Act on local charges and fees (Uopiol) of January 12th 1991 with later changes, as well as the PN-ISO 9836:1997 norm (technical support to the act). All buildings in Poland are measured in accordance with these two documents for tax purposes. How does it all look in detail?

The legal aspect of taxes

There aren’t many details about the ways of performing measurements and calculations in the Uopiol act. However, the Act has always referred to Polish norms. Since April 29th 2012, the only applicable norm in Poland is the PN-ISO 9836 (the regulation of the Minister of Transport, Construction and Maritime Economy on the detailed range and form of a building project, Dz. U. 2012 poz. 462). My and the lawyer’s way of thinking is that since Uopiol mentions words such as “building” or “construction”.

What is the subject to taxation

According to Uopiol (art. 1a pt. 5) the subject to taxation is the usable floor area. In accordance with PN-ISO 9836:1997, service areas (which in fact are considered technical areas – the creator of the norm didn’t use the term accurately) i.e. all technical rooms, for example mechanical room or electrical room, are not considered part of the usable floor area. Additionally, movement areas (staircases, hallways, indoor ramps) are not included. Construction area doesn’t consist only of construction walls, but also of partition walls, chimneys, shafts and ventilation shafts. According to art. 1a pt. 5 Uopiol, the usable floor area of a building or a part of the building is the area measured at the inside length of walls on all storeys, excluding the staircase and elevator shafts areas. Underground garages, cellars, basements and usable attics are also considered storeys. The difference in defining the same term between Uopiol and the PN-ISO 9836:1997 norm is now clearly visible. To clear up this confusion, the easiest way to put it is that we don’t pay taxes for staircases, shafts without floors, unusable attics, plastered walls (including partition walls) and for areas with height below 1.40m.

Height reduction

If the room height or the height of its parts is between 1.40 and 2.20m we pay for 50% of such an area. For rooms above 2.20m we pay 100% of the tax. It’s logical that the Act is superior to the norm. It’s worth noting that the height limits come from the old (now outdated) norm PN-70B-02365 – what’s good is the fact it’s been continued in the following years. It’s also worth mentioning that those limit values have nothing to do with the regulation of the Minister of Infrastructure of April 12th 2002 on technical conditions, which buildings and their location should meet. In my opinion, those two documents should be concurrent. I’d also like to mention that Uopiol and the Construction Law don’t provide a definition of unusable and usable attics, which is problematic when deciding whether the attic is usable or not. When it comes to garages, we pay for the area of underground parking lots along with the communication area inside. We also pay for all the technical rooms, even if it’s a so-called technical storey.

Staircases

The Construction Law doesn’t provide a definition of a staircase either. It also is problematic, especially after the amendment of the act, as it requires measuring and taxation of the common parts of a building. I’ve said before that we don’t pay for a staircase – but where does a staircase have its limits? As it turns out, we have to pay for the area where the staircase ends. Nowadays new buildings have open or semi-open stairways, so the division line isn’t very clear. Escalators in the common areas of shopping centers are also an issue. In those cases we project an opening in the ceiling, which gives us an “area confined by walls used for stair installation” – the only definition of a staircase which can be found in the PN-ISO 9836:1997.

Shafts, elevators, machine rooms, roof garages

We don’t pay taxes for shafts, so an elevator shaft isn’t taxed either. However, when it comes to elevator machine rooms we pay a property tax. It is a separate room, it has a ceiling, floor and doors and it cannot be considered a continuation of the elevator shaft. And what can you do when there is a multi-level parking lot next to the shopping center, and the highest level is open (without a roof) and the walls and barriers are e.g. 1.2m high? There are a lot of examples of non-standard cases in buildings, and each one of them should be interpreted individually. This is due to the fact that Polish laws are not precise enough and don’t mention many situations.

Area around the property

I’d like to remind property owners, that according to the art. 4 pt. 1.3 (Uopiol) we pay taxes for buildings or their parts that are connected with economic activity, subject to the act 4-6. The value mentioned in income tax laws, given on January 1st of the financial year, which is the base for calculating tax amortisation for that year, is not reduced by depreciation charges. In case of building which are fully amortised we use the value given on January 1st of the year of the latest depreciation charges. Thus, we also pay taxes for roads, paved areas, installations, lighting, fences and ramps.

What other areas can we exclude from taxation?

The important thing is that if we have a “medical” tenant we don’t pay taxes for the area of the lease. The other case is when there is a historical building that is uninhabited. For such area, as long as it remains uninhabited, we don’t pay a property tax either.

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Author: Adrian Hołub

Translation: Julia Pająk

Contact with

 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!