The sale of private property, which is not related to business activity, in principle generates income in income tax on individuals. This income should be reduced by the cost of obtaining it and calculated from the tax base thus obtained 19% tax. Information on the sale made shall be sent to the competent tax authority by submitting to the competent tax authority by 30 April the year following the declaration PIT-39. The tax due should also be paid within this period.
The judgment of the Supreme Administrative Court shows that in order to be able to benefit from the exemption they must be interpreted strictly and in accordance with a reasonable interpretation.
When examining the right to apply the exemption, it will be important not only to spend funds on the purpose specifically indicated by the legislator, but also to intend to reside by the taxpayer in the purchased property.
Thus, a taxable person who acquires or rents property for loved ones will not, in principle, be able to benefit from the exemption.
Catalogue of tax exemptions for the purchase and sale of real estate
If the taxpayer wants to free himself from the obligation to pay the tax, he has a choice. two Out. After first may refrain from selling the property so that its disposal takes place after the end of 5 years from the end of the calendar year in which the acquisition or construction of the property took place.
In this case, the taxpayer should take special care in calculating the time limit, bearing in mind that the calculation does not include the year in which he acquired the property. For example – if the acquisition took place 15 May 2014, This sale of the property will only benefit from the exemption from 1 January 2020
However, for taxpayers who cannot wait to sell, the legislature has yet to foresee one Out.
In particular, it is an exemption from the taxation of income from the sale of immovable property provided that within the time limit two years from the end of the tax year in which the divestment took place, the taxpayer shall allocate it for its own housing purposes.
Among its own residential purposes, the legislator mentions, among others, the purchase of real estate, the purchase of land for the construction of real estate, the construction of residential property, the renovation, the reconstruction of real estate or the expenses on repayment of loans incurred to finance the purchase.
Tax exemption in practice
However, despite the tax exemption catalogue contained in the law, the case does not look so transparent.
The taxpayer found out about it, who before passing 5 years from the date of the acquisition of the land, she sold it and the proceeds from the sale were allocated to the purchase and renovation third housing units that she then rented. By making a Pit-39 She thought that the income would benefit from tax exemption.
Another sentence was taken by the Chief of the Tax Office, who initiated the tax procedure completed by a decision to administer the tax to be paid. In the explanatory memorandum, he pointed out that the income from this sale was spent by the taxpayer on purchase and renovation, among others. third dwellings that have been rented.
Therefore, the factual situation shows that the party's intention at the time of the purchase of the premises was a commercial objective rather than the fulfilment of its own housing needs. The decision was maintained by the Director of the Tax Chamber.
Before the Provincial Administrative Court, the taxpayer argued that she had the right to apply the tax exemption in question, since the purpose of the purchase by her 3 the premises were resident in them, although this objective was removed for the future, due to unforeseen circumstances. The apartments were also intended to meet the housing needs of members of the immediate family.
This argument did not convince the Provincial Administrative Court in Łódź. In his judgment, he stated that the term ‘own housing’ used by the legislator should be understood as providing for itself the so-called ‘restor’.
In order to fulfil the condition laid down in the law, it is not enough to buy the apartment itself, but it is necessary to do so in order to meet its own housing needs.
It was the intention of the legislator to help meet the needs of citizens, and it was only their own at a given moment, rather than, as the party claims, in the future, or the needs of people living in the future. third, In this case, the daughter. The taxpayer brought a cassation action against that decision.
However, it included in part the argument of both the Court of First Instance and the tax authorities, claiming that the tax should grant it the right to be exempted at least as regards expenditure incurred on one property.
This position was agreed by the Supreme Administrative Court, which in its judgment of 4 July 2018 Act reference I SA/Łed 1356/15 set aside the sentence of the WSA and the preceding decisions. In the statement of reasons, one party is correct, the tax authority and the Court of First Instance, claiming that the exemption will not apply to third real estate. On the other hand, However, the parties to the tax authority should consider whether the exemption in question may apply to one of the purchased dwellings.
The judgment of the Supreme Administrative Court shows that in order to be able to benefit from the exemption they must be interpreted strictly and in accordance with a reasonable interpretation.
When examining the right to apply the exemption, it will be important not only to spend funds on the purpose specifically indicated by the legislator, but also to intend to reside by the taxpayer in the purchased property.
Thus, a taxable person who acquires or rents property for loved ones will not, in principle, be able to benefit from the exemption.
Author:
Marcin Kołkowicz
Tax advisor, tax consultant at Russell Bedford Poland Sp. z o.o., graduate of the Administration, Management and Marketing of the Catholic University of Lublin named after John Paul II. The subject of tax law deals with from 2012. He gained experience in Lublin and in Warsaw tax advisory offices. Author and co-author of many tax publications, in particular for Tax and Tax Portal TaxFin.pl. In his career, he dealt with both direct and indirect taxation issues, with particular emphasis on VAT.