Not every real estate owned by the entrepreneur is being used for business activities and may therefore be taxed at a higher rate. This conclusion was reached by the polish Constitutional Tribunal (Trybunał Konstytucyjny) when examining the provisions on property tax.
Real estate tax is a local public duty, established by the council (rada gminy) of a some commune. However, it cannot be arbitrary – the upper limit of the value of the tax rate is set by the Act on Local Taxes and Fees (ustawa o podatkach i opłatach lokalnych). The executive body of the commune sets the rate individually for commune.
The legislator differentiated the upper limit of the real estate tax rate. This difference is considerable. From the content of art. 5 sec. 1 point 2 lit. a and b of the Act on Local Taxes and Fees, we learn that the amount of the property tax rate may not exceed 0.89 PLN per year for buildings or their residential parts per square meter of usable space, while in the case of a building or its part related to running business activity and residential buildings or parts thereof used for business purposes PLN 25.74 per square meter of usable floor space.
The problem arises when the executive body of the commune imposes an obligation on the entrepreneur to pay the excessive tax rate, when in fact the encumbered property cannot be used by the entrepreneur for profit.
The case was brought to the level of the Constitutional Tribunal, which was to adjudicate on the compliance with the Constitution of the legal definition contained in art. 1a paragraph 1 point 3 of the Act of January 12, 1991 on local taxes and fees with the provision of art. 64 sec. 1 of the Constitution. This provision defines all real estate owned by an entrepreneur as real estate related to running a business.
The Tribunal found that the lack of differentiation of the tax situation and, consequently, the recognition by the authority of any real estate owned by the entrepreneur as being used for profit, is inconsistent with the constitutional right to property and excessively and disproportionately restricts this right. According to the judges of the Constitutional Tribunal, a entrepreneur cannot be charged a higher tax rate solely because they own real estate.
Summing up, the judgment of the Tribunal may be of great importance for entrepreneurs who are involved in legal transactions both privately and as entrepreneur. It can potentially reduce the burden on the property due to public levies.
Despite the doubts as to whether all „judges” were properly appointed to the Tribunal (and these doubts, let us remind you, are not only of a political nature, but also serious legal doubts – the ruling on the real estate tax was issued, among others, by Mr. Mariusz Muszyński, who is, according to the judgment of the Voivodship Administrative Court in Warsaw of June 20, 2018 in the case V Sa / Wa 459/18, „a person not entitled to adjudicate in the composition of the Constitutional Tribunal”), the judgment should be assessed positively. Earlier interpretations of some city and communal offices were certainly too broad and led to unjustified excessive taxation of entrepreneurs.