Tax Benefits for Real Estate Investors in Poland

Published on September 29, 2025 and written by Cyril Jarnias

Poland’s growing appeal as an investment destination is particularly evident in the real estate sector, where a series of cleverly designed tax incentives offer investors countless opportunities to optimize their returns.

By combining dynamic economic growth with an expanding real estate market, Poland offers benefits that don’t go unnoticed by savvy investors.

At the heart of these incentives are tax mechanisms specifically designed to guarantee significant tax reductions and attractive deductions, making this financial horizon not only stable but also lucrative.

For those looking to diversify their portfolio while benefiting from advantageous taxation, understanding the specifics of the Polish framework could well be a strategic key to maximizing return on investment.

Poland: An Unexpected Tax Haven for Real Estate Investors

Poland strongly attracts real estate investors through a set of specific tax benefits, macroeconomic stability, and solid growth prospects.

Attractive Tax Factors for Real Estate Investment in Poland:

• Special Economic Zones (SEZs)
  • Partial or total tax exemptions for several years for investments made in these zones.
  • Investment subsidies and simplified administrative procedures favoring industrial and commercial real estate development.
• Absence of Social Security Contributions
  • No social security contributions on rental income or real estate-related dividends, representing substantial savings compared to France (where these charges can reach up to 17.2%).
• Competitive Tax Rate
  • Flat rate of 8.5% to 12.5% on rental income. This tax simplicity facilitates the management of foreign investments.
• New Tax Regulations Since January 2025
  • Buildings continue to be taxed based on their floor area; certain structures are now assessed according to their depreciated value. For some industrial sectors (notably renewable energy), the tax framework has been structured favorably despite some audit risks due to regulatory complexity.

Tax Advantage	Detail
SEZs	Partial/total corporate tax exemptions
No Social Security Contributions	On rental income/real estate dividends
Property Tax Rates	Flat, simple (8.5–12.5%)

Concrete Examples of Beneficiary Investors:

• European SCPI Corum XL:
  • Acquisition of an office building in Krakow for €54 million, observed net annual yield: 6.6%.
  • Second office acquisition in the same city: investment of €42 million, net yield: 8.1%.

These performances are explained by the low level of social/security charges and strong local rental demand in major Polish metropolitan areas.

Comparison with Other European Countries:

In Germany or France: higher taxation on property income + mandatory social security contributions on rental income/dividends.
Housing costs also remain lower in Poland than in Western Europe:

Item	Warsaw (€)	Berlin (€)
Monthly Rent for 2-Bedroom Downtown	~1,000	~1,800
Restaurant Meal	~10	~15

Economic Stability & Growth Prospects:

Expected Polish GDP growth in 2025: 3.5%, higher than European averages
Controlled public debt (below 60% of GDP). The combination of favorable taxation—notably through SEZs—a simple structure of levies on commercial/rental real estate, and robust economic fundamentals positions Poland as an attractive hub in Central Europe for any investor seeking to optimize their net profitability while limiting regulatory risks.

International Tax Optimization: Leveraging Double Taxation Agreements

Poland has concluded numerous double taxation agreements (DTAs) with its main economic partners, including France, Germany, Switzerland, and Luxembourg. These conventions aim to prevent investors from being taxed twice on the same real estate income earned in Poland and in their country of residence.

Main Agreements Concluded by Poland

Partner Country	Signature Date	Scope
France	June 20, 1975	Income & Wealth
Switzerland	September 2, 1991 (amended 2010)	Income & Wealth
Germany	Various recent versions	Income
Luxembourg	Several recent addenda	Income

Mechanisms to Reduce or Eliminate Double Taxation

Tax conventions generally provide for two main mechanisms:

• Tax Credit: Tax paid in Poland on real estate income is deducted from the amount due in the country of residence.
• Exemption: Certain types of income may be completely exempt from tax in the country of residence if already taxed in Poland.

Concrete Example

A French tax resident investor receiving rental income from a property located in Warsaw will be taxed locally on this income. Thanks to the Franco-Polish agreement, they can benefit either from:

• A tax credit equal to the Polish taxation when calculating the overall tax in France,
• Or—according to specific terms—a total or partial exemption of said income from French taxes.

This also applies to capital gains realized upon the sale of the property.

Conditions and Requirements to Benefit from the Advantages

To be eligible for the favorable provisions provided by a convention:

1. The investor must prove their status as a tax resident in one of the contracting states.
2. They must provide the appropriate forms (for example, an official request to the Polish or French tax authorities).
3. They must not artificially seek to evade tax (real economic substance required).

Summary in list form:

• Proven tax residence
• Compliant declarations
• Strict adherence to administrative procedures

Impact on Polish Real Estate Competitiveness

DTAs significantly enhance Poland’s attractiveness as a destination for international real estate investments because:

• They offer increased visibility on the applicable tax regime,
• They limit the tax risk related to double taxation,
• They often allow for legal optimization of the effective tax rate.

In practice, these agreements thus facilitate both the entry and exit of foreign capital into the Polish real estate market while legally and financially securing international investors.

Understanding Property Tax in Poland: An Asset for Investors

Property tax in Poland is a local tax applied to the ownership of real estate, covering both residential and commercial properties. It is characterized by its relative moderation and by major legislative reforms effective January 1, 2025, which aim to clarify definitions and simplify procedures.

General Operation and Types of Properties Concerned:

• The tax applies to land, buildings (single-family homes, multi-family buildings) as well as commercial or industrial structures.
• Taxable parties: private owners, local companies, or foreign investors owning real estate on Polish territory.
• Garages attached to dwellings will now be considered as residential parts, which will imply more favorable taxation for these spaces.

Calculation Method and Applicable Rates:

Property Type	Tax Base	Indicative Rate*
Residential	Area (PLN/m²/year)	Approx. 0.5% cadastral value
Commercial/Industrial	Area (PLN/m²/year), specific equipment considered from 2025	Variable by municipality

*In practice for an average home:
– Cadastral value ≈ 1,200,000 PLN → Annual tax ≈ 6,000 PLN (~€1,280)

Precise rates are set each year by municipalities within a limit defined at the national level. The reform of January 1, 2025, notably clarifies the distinction between “building” (structure with foundations and roof) and “infrastructure/structure,” thereby reducing legal uncertainty for some complex projects.

Available Exemptions or Reductions:

• Certain port or railway infrastructures benefit from specific exemptions.
• Small architectural objects remain exempt.
• No general exemption for foreign investors but possibility of local temporary reduction according to municipal policy.
• Extension of the tax declaration deadline until March 31 for companies starting from the 2025 fiscal year.

Impact on Real Estate Investment Profitability:

Advantages

– Low relative weight compared to other European countries → net optimization of gross rental yield
– Numerical example:
– Gross annual rent received: ~51,000 PLN
– Typical annual property tax: ~6,000 PLN
– Net yield before tax optimized thanks to low tax level

Disadvantages

– For the commercial/industrial sector, some regulatory changes risk substantially increasing the amount due — absolute necessity to audit each technical component of the property to avoid underestimating potential future charges.

Strategic Aspects and Assets Related to Good Tax Mastery:

Mastering local regulation allows:

• Precise integration of the real cost into one’s real estate business plan,
• Quick benefit from possible exemptions during negotiations,
• Better anticipation of the financial impact during rapid legislative changes,
• Adjustment of rental/commercial strategies before any significant announced increase — particularly crucial after the reform planned for early 2025 where some players will see their charges increase abruptly if poorly prepared.

Concrete Example Illustrating Strategic Interest:

An investor who anticipated the favorable reclassification of their attached garages will see their property tax burden decrease significantly starting next January; whereas a commercial owner who did not meticulously audit their installations could face several tens or even hundreds of thousands of PLN in additional unbudgeted annual charges if certain parts become taxable under the new structural definition.

☑️ A fine understanding of the Polish system therefore offers a major competitive lever both on future valuation and on immediate operation – especially in a changing legislative context where every detail can significantly alter your net margins!

Global Comparison: Why Choose Poland Over Other Markets

Poland stands out fiscally with preferential tax rates, targeted exemptions, and an absence of social security contributions that favor foreign real estate investors.

Main Tax Advantages in Poland

• Flat Rental Income Tax Rate:
  • 8.5% up to approximately €23,000 annual income
  • 12.5% beyond (rental income)
• No Social Security Contributions on property income for non-residents
• Equal Treatment: non-residents subject to same rates as residents
• Special Economic Zones (SEZs): partial or total tax exemptions for several years depending on investment and location
• Simplified Administrative Procedures, investment subsidies in certain sectors or regions

Country	Rental Income Tax Rate	Social Security Contributions	Specific Exemptions/Credits
Poland	8.5–12.5 %	No	SEZs: multi-year exemptions
France	Up to 45 % +17.2%	Yes	Deductions like Pinel/Malraux
Spain	Approx. 19–24 %	Yes	Special regimes by region
Germany	~15–45 %	Yes	Depreciation “Abschreibung”
United Kingdom	~20–45 %	No (for non-res.)	Limited deductions since Brexit

In Poland, the simplicity of the tax regime is often cited as a major asset. One investor testifies: “The possibility of not paying social security charges on my rents makes all the difference compared to Paris or Berlin. My net yield remains high even with delegated management.”

Concrete Examples

• In Krakow, a building acquired for €54 million generated an annual yield of 6.6%; another building reached 8.1%. European SCPIs carry out major operations there thanks to this attractive framework.
• A studio in Warsaw rented for approximately €400/month, taxed at a flat rate without additional social security contributions.
• Annual Polish GDP growth between 3 and 4%; real estate price increase: +17.7% over twelve months.

International Comparison

Polish taxation optimizes net yield compared to mature markets where high taxes and mandatory social security charges are added. Tax credits are less frequent than in France but compensated by:

• A more readable tax administration,
• Low rates,
• Facilitated access to derogatory regimes in certain geographical areas.

Recent Statistics

• Cumulative foreign direct investments (2004–2023): $310 billion
• Public debt under 60% of GDP
• Gross annual yields generally between 2 and 8%

Expert Opinions

“The Polish market combines macroeconomic stability and direct tax incentives where Western Europe multiplies surtaxes and declarative complexities” — European SCPI Analyst

“Our real estate portfolio in SEZs has benefited from a total exemption on local corporate tax for three years” — Pan-European Fund Manager