Real estate sales in Poland: Renovation costs and tax obligations

Property owners in Poland face specific financial considerations regarding renovations and taxation when selling real estate.

Regarding renovations, experts distinguish between preparing a home for sale—such as cleaning, painting, and minor repairs to highlight potential—and major renovations like replacing kitchens or bathrooms. While owners often wish to upgrade properties before selling, major renovations do not always guarantee a full return on investment, as buyers often focus on identifying potential flaws rather than appreciating aesthetic improvements.

On the fiscal side, selling property before a specific timeframe can trigger a 19 percent income tax (PIT). This tax is calculated on the profit (income) rather than the total sale price. The critical period is five years, which is calculated from the end of the calendar year in which the property was acquired or built. For example, a property bought in May 2022 would see its five-year period conclude at the end of 2027, making sales from January 1, 2028, exempt from this specific tax. Legal exemptions, such as housing relief, may also apply to avoid these costs.