The sale of real estate usually involves a large income for the owner, and consequently, also a large tax. It is therefore worth being aware of what the funds collected from the sale of the property should be used to benefit from the tax relief.
Speech mainly to the relief mentioned under Article 21(1)(131) Personal Income Tax Act (hereinafter: the Personal Income Tax Act), also referred to as "residential relief". Generally, the sale of residential property is subject to taxation before the period five years after its acquisition.
Of course, this applies only to the situation of income, i.e. when the sale of the apartment exceeds the value of its previous acquisition, plus possible renovations or reconstructions.
To reduce the tax involved, you can benefit from housing relief if within three years from the end of the tax year in which the divestment took place, the funds will thus be used for their own housing purposes.
The concept of "own housing" expenditure is crucial. The Act lists them under Article 21(25)
Revision of the January tax rules 2019 it has introduced favourable solutions for taxpayers. First of all, it extended the deadline for the allocation of funds for its own housing purposes to three years ago (they were two years), and significantly improved the situation of the property obtained in decline.
Based on added Article 10(5) The calculation of the five-year taxable period shall take place from the acquisition or construction of the immovable property by the decedent and not, as before the amendment, from the date of acquisition of the inheritance.
The concept of "own housing" expenditure is crucial. The Act lists them under Article 21(25).
This directory is closed and can be divided into three cost groups: for the acquisition of new real estate, for the investment in real estate already held and for the repayment of financial liabilities related to real estate and resulting from loans or loans drawn.
This excludes the possibility of exempting expenditure which cannot be included in the above cost groups. This includes booking and development contracts, as stressed by the Director of National Tax Information in interpretation no. 0115-KDIT2-1.4011.448.2019.2.JG. It cites the NSA's judgment dated 21 March 2017 II FSK 321/15.
This judgment provided that the development contract, according to Article 3(5) Act on 16 September 2011 on the protection of the rights of the purchaser of a dwelling or a single-family house, is the contract which the developer undertakes to establish or transfer to the buyer after the completion of the undertaking of the right of separate ownership of the dwelling and the transfer of that right to the purchaser.
It does not therefore constitute an acquisition of a premises within the meaning of Article 21(25)(1) the Personal Income Tax Act, and its content only indicates the exspect of the right to acquire the property.
If, therefore, the transfer of the property does not occur within the time limit third the years set out in the Act, the taxable person is not allowed to benefit from the exemption.
Another reason for frequent disputes is the narrow interpretation of the term "own housing objectives".
Many times in their interpretations, the authorities stressed that, from the point of view of the legislator, it is important that the spending of revenue is aimed at meeting the taxpayer's own housing needs both in the current situation and in the future.
This means that, for example, property expenses for family members or their own children are not relieved. The amount of property held is also irrelevant.
In a recent NSA judgment with 30 April 2018 (II FSK 2413/16) it is important from the point of view of the court to determine whether, at the time of the purchase of the property, the taxpayer meant to meet his own housing needs, which in a given situation meant to sleep In the second an apartment outside of your permanent residence.
The Court also held that even the temporary leasing of the purchased apartment does not prevent the application of the exemption unless the apartment is primarily used to meet other commercial purposes.
A confirmation of the change of attitude of tax authorities is, among others, the interpretation of the Director of National Tax Information No. 0115-KDIT2-1.4011.309.2019.2.JG. indicating that a taxable person may benefit from an income tax exemption even in the acquisition of an apartment where he plans to spend only a few nights a week or while on leave, even if he assigns it for short-term rent during the remaining period.
source: https://nieruchomosci.wprost.pl/wiadomosci/10292417/sprzedaz-nieruchomosci-skorzystaj-z-ulgi.html