Cadastral tax – what is it, how much is it, and who will have to pay it?

The cadastral tax is one of the most frequently discussed issues in the context of changes to the tax system in Poland. It arouses strong emotions—both among property owners and investors. In this article, we explain what the cadastral tax is, how much it may amount to, and who will be obliged to pay it if it is introduced in Poland.

Aider Poland

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What is a cadastral tax?


A cadastral tax is a form of property tax whose amount depends on the market value of the property, rather than – as is currently the case in Poland – its floor area.


In practice, this means that:


  • the more expensive the property, the higher the tax,
  • location and standard are of key importance,
  • the value must be regularly updated (e.g., through a cadastral system).

Example: If an apartment is worth PLN 500,000:


  • at a rate of 1%, the tax would amount to PLN 5,000 per year,
  • at a rate of 2% – as much as PLN 10,000 per year.

For comparison, the current property tax in Poland is many times lower.


Cadastral tax in Poland – will it be introduced?


As of today, a cadastral tax is not in force in Poland. However, the topic regularly appears in public and political debate.


Current situation:


  • no official timeline for its introduction,
  • no draft law implementing a full cadastral system,
  • strong public opposition.

Experts point out that its implementation would require:


  • creating a comprehensive register of property values,
  • a system for updating valuations,
  • legislative and administrative changes.

How much is the cadastral tax in other countries?


A cadastral tax operates in many countries around the world, and its rates vary:


  • Germany: approx. 0.26% – 1%
  • United Kingdom: approx. 0.5% – 2%
  • France: approx. 1% – 2%
  • United States: up to approx. 2.5%
  • Singapore: up to as much as 4%

This shows that potential rates could significantly affect the cost of owning real estate.


Who will pay the cadastral tax?


If a cadastral tax were introduced in Poland, the obligation to pay it would fall on:



Cadastral tax – from how many properties?


This is one of the most frequently asked questions. Depending on the adopted model, several scenarios are possible:


  • Tax on every property – regardless of the number of properties owned.
  • Progressive tax – higher rates for individuals owning multiple properties.
  • Relief for the first home – a lower tax or exemption for a primary residence.

At this point, there are no official decisions on this matter.

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Advantages of the cadastral tax


The introduction of a cadastral tax has several potential benefits:


  • increased revenues for local governments,
  • reduction of the informal (grey) zone in local taxation,
  • a more equitable system / stronger social justification (owners of more valuable properties pay proportionally higher taxes),
  • limitation of speculation in the real estate market,
  • incentive to develop vacant or unused properties,
  • improved spatial planning and urban development, as well as the growth of municipalities.

Disadvantages of the cadastral tax


At the same time, there are many significant drawbacks:


  • a substantial increase in tax burdens,
  • a possible rise in rental prices (costs passed on to tenants),
  • no link to the owner’s income,
  • risk of deepening regional inequalities (differences in property values depending on location),
  • high costs of implementing and administering the system,
  • discouragement from investment and renovations (owners may be reluctant to modernize or renovate properties due to fear of increasing their value and, consequently, higher tax burdens).

Will the cadastral tax affect housing prices?


The introduction of a cadastral tax could have a major impact on the real estate market:


  • a possible decrease in housing prices (lower investment demand),
  • an increase in rental rates,
  • reduced purchasing of properties “for rent,”
  • greater turnover of properties on the market.

Tax on income from buildings – is it a sign of upcoming changes?


Since 2019, Poland has had a so-called tax on income from buildings, which some consider a precursor to a cadastral tax.


Key information:


  • applies to properties with a value exceeding PLN 10 million,
  • amounts to 0.035% per month,
  • calculated based on the initial value of the building.

However, this is not a classic cadastral tax, as it does not cover the majority of residential property owners.


Summary


A cadastral tax is a solution that could significantly change the way real estate is taxed in Poland, shifting the basis from floor area to actual property value. Although it is not currently in force and there are no concrete plans for its implementation, the topic regularly returns in public debate and generates strong reactions. Its potential introduction would mean higher costs for property owners, but also possible benefits for local governments and the real estate market. Therefore, it is worth monitoring developments and preparing for possible changes in the future.


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