The tax on civil law transactions for apartment purchases

When buying a new apartment, it is important to keep in mind that the final expenses incurred in this purchase exceed the property’s value. Buyers need to consider not only the agreed price of the unit but also additional fees, including the tax on the purchase of the apartment. How are these fees structured? What does the tax on civil law transactions cover, and who is responsible for bearing these costs?

What is the tax on civil law transactions?

The tax on civil law transactions is a tax fee regulated by law, listing nearly 10 activities subject to taxation. These include, among others, sales and exchange agreements of goods and property rights, loan agreements (money or items designated only by type), donation agreements, and the establishment of a mortgage. When planning to buy an apartment, this tax should be anticipated in your expenses. However, there are situations where you do not pay this tax when purchasing a property. We will discuss these exceptions later in the article.

Check the tax on apartment purchases before the transaction

Dreaming of buying an apartment? The tax on civil law transactions (called PCC tax in Poland) is an additional tax obligation imposed on certain transactions, including real estate purchases. Estimating the amount of this tax is crucial, as it affects the final cost of the transaction. It is worth including the tax amount in the total costs to avoid any unpleasant surprises.

Tax rates on property purchases

Tax law imposes an additional fee on the purchase of an apartment. The tax rates on property purchases vary depending on the type of transaction. For example, a new apartment is subject to 8% or 23% VAT, while for a secondary market apartment, the tax on civil law transactions of 2% of the transaction price applies.

However, there are situations where one can be exempt from the tax on property purchases. This occurs, for example, when buying an apartment from a developer who is a VAT taxpayer.

Tax rules for purchasing an apartment from a developer

When buying directly from a developer, you do not have to worry about the tax on the purchase of the apartment. This is one of the few situations where the 2% tax does not apply to the buyer. Why is this the case? In this scenario, the property purchase tax is shifted in another form to the developer. The developer, as the seller, is charged with VAT (or exempt from it), but regardless of the seller’s tax status, the buyer does not have to bear this additional fee. This is a significant advantage for those choosing to buy a primary market apartment from a developer.

Where do we pay the tax on apartment purchases?

The notary is responsible for paying the tax on civil law transactions to the office, and the value of the tax will be added to the overall costs of the notarial deed. Therefore, the exact amount of the tax can be calculated by the selected notary office.

This article discusses selected legal issues related to the PCC tax on the purchase of an apartment, including its amount and principles of operation. The information presented in this article is for informational purposes only and does not constitute legal advice. WPBM Mój Dom S.A. recommends consulting a qualified legal advisor for individual advice, due to the complexity of the regulations and the specificity of individual cases.