Last Updated on February 11, 2025
This article was reviewed by a tax advisor.
The Polish Deal (also known as the New Polish Order) was introduced on 1 July 2022, though some of the regulations will not take effect until 1 January 2023. In this guide, you will find everything you need to know as an overseas landlord with property in Poland about the Polish Deal.
What is the Polish Deal?
The Polish Ministry of Finance implemented some new legislation aimed at simplifying tax settlements.
The new Polish Deal includes tax changes that will affect everyone who pays them, including landlords (both residents and non-residents). Let’s take a look at the current rental income taxes and what has been implemented.
How is Polish rental income taxed now?
At present, all Polish private landlords can choose between two options when paying their rental income tax:
- Reduced tax rate – 8.5% for income up to 100k PLN and 12,5% for income over 100k PLN. This is the simplified tax method, where no deductions are permitted and only real income is taxed (amount of rent paid by a tenant). Private landlords in Poland who operate on a small scale and don’t want the hassle of bookkeeping frequently use the reduced rate.
- Progressive rate – With a tax-free allowance of 8kPLN, the tax rate is currently 17% for income up to 85,528 PLN and 32% for income over 85,528 PLN. A number of deductions are allowed: service fees and utility bills (if not paid by a tenant), property tax, insurance, maintenance costs, renovation costs, the cost of purchasing new equipment, the interest rate on the mortgage, and depreciation of the property (1.5% to 10% of the property value per year).
Landlords who have a lot of expenses frequently use the progressive rate. It requires more time because all expenses must be supported by invoices and receipts, which must then be kept and property owners might need assistance from a qualified accountant.
The primary consideration, in this case, is the property’s depreciation write-offs, which represent a considerable deduction from gross income. However, applying the progressive rate frequently results in paying less tax or none at all.
The following tax options are currently available to all landlords who conduct business activity by renting out their properties in Poland:
- Reduced rate (same rates as individuals)
- Progressive rate (same rates as individuals)
- 19% flat tax with allowable expenses
- Tax cards are the most straightforward form of taxation, requiring neither tax declarations nor bookkeeping. Regardless of the amount of the income, tax is paid on the gross amount. The type of business activity, the number of employees, and the number of residents in the tax district all affect the tax rates.