- We asked the Ministry of Finance whether the regulations regarding real estate tax will be changed in the case of agricultural activity, e.g. if photovoltaic panels or a wind turbine are installed on a farm building.
- It should be emphasized that we are talking here only about agricultural activities. We do not take into account the situation when a farmer also runs a business, but only agricultural activity.
- Only buildings or their parts related to business activity are and will be subject to real estate tax. Within the meaning of the Act on Local Taxes and Fees, economic activity does not include agricultural activity. This means that buildings or parts thereof related to agricultural activities within the meaning of the above-mentioned Act, are not subject to real estate tax – emphasize experts from the Press Department of the Communication and Promotion Office of the Ministry of Finance.
- The Ministry of Finance in the proposed act (UD72) does not provide for additional exemptions from real estate tax for buildings used for agricultural activities – replied the Ministry of Finance.
- This means that the real estate tax will cover only buildings related to running a business. Farmers conducting agricultural activity, their buildings and installations, in accordance with the Ministry of Finance's response, will not be subject to the new real estate tax.
The Ministry of Finance is working on a draft act amending the Agricultural Tax Act, the Act on Local Taxes and Fees, the Forest Tax Act and the Stamp Duty Act.
The aim of the project, which is at the consultation stage, is, among others: introducing the definition of buildings and structures for tax purposes into the regulations.
So far, the definition from construction law has been used, which has led to many controversies, as in the case of buildings taxation is calculated per square meter, and in the case of structures – the rate is 2%. from value.
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Neneman: We will not send anything to the Sejm that could increase real estate taxes on any industry
Unfortunately, the changes proposed by the Ministry of Finance in the draft act regarding the definition of buildings and structures, including agricultural facilities, will mean that equipment and installations used for agricultural production, e.g. by processors of agricultural products, may also be subject to real estate tax.
The current definition and legal case law indicate and clearly separate and distinguish such agricultural production equipment and installations from buildings.
Expanding the definition of real estate to include agricultural production equipment means higher tax fees
The draft Act on Local Taxes and Fees, the Forest Tax Act and the Stamp Duty Act proposes modifications to the definitions of "structure" and "building", which includes provisions leading to a utility relationship between a facility and installations and devices as a sufficient justification for taxation. these installations and devices as part of buildings (previously they remained outside the scope of taxation).
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Changes in property tax from 2025. PKBiPB has no doubt: extremely unfavorable for farmers
The project returned to the concept of the so-called technical and operational whole, which was rightly eliminated from the regulations in 2015 due to the drastic number of disputes between taxpayers and tax authorities. Meanwhile, this solution, widely criticized by entrepreneurs, tax experts, tax authorities, but also administrative courts, is to be returned, according to the assumptions of the Ministry of Finance, and in an extremely controversial and problematic way. In its essence, it boils down to the utility relationship between the facility and the installations and devices as a sufficient justification for taxing these installations and devices as part of the structure (so far they have remained outside the scope of taxation). In practice, this will mean that all types of equipment used in the production process that have not been subject to real estate tax so far will be able to be considered parts of buildings and thus be subject to taxation on their value. This may lead to taxation of all devices, including air conditioners, ventilation units, power generators, electrostatic filters, transformers, all types of tanks, and even entire production lines/strings – informs the Polish Coalition of Biofuels and Protein Feeds and the Federation of Branch Associations of Agricultural Producers. – In addition to the above, the project also assumes the expansion of the catalog of structures to include objects that have not been generally taxed so far, which has been repeatedly accepted by tax authorities and courts, such as containers and tent halls. Such facilities are currently directly listed in the annex to the Act, which constitutes the basic catalog of buildings. Moreover, the extension of the scope of taxable structures will also be possible by changing the definition of a permanent connection with land, according to which it is sufficient to ensure the stability of the structure, as well as changing the requirement to construct a building using construction products to constructing the structure using construction products. This, in turn, will directly mean that real estate tax will apply to all types of devices or tanks that arrive ready from the manufacturer and are only assembled at the production plant, absolutely not as part of the construction process. At the same time, the project lacks a definition of a construction product, hence this will lead to obvious disputes as to whether this concept should be understood linguistically or, for example, refer to the Construction Law and the Construction Products Act.
The proposed extension of the definition of a building and structure means that all installed equipment, including renewable energy sources, will be taxed. What is the taxation of renewable energy installations in running a business?
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Elements of renewable energy installations are already subject to 2% real estate tax only when running a business
It should be noted, however, that building parts of technical equipment, i.e. building parts of photovoltaic panels but also wind turbines, e.g. foundations, are structures and are subject to real estate tax if they are related to running a business.
For example, this tax applies if we produce electricity or heat and sell it as part of a registered business activity. In the case of processing and agricultural activities, when we use the energy and heat produced to conduct business activities, these regulations also apply.
This position is firmly embedded in court jurisprudence, an example of which is the judgment of the Provincial Administrative Court in Szczecin of September 11, 2019 (I SA/Sz 239/19). The court indicated that the structure of the device of photovoltaic panels mounted on the ground and the function they perform – energy conversion solar to electric, mean that only their building parts, if they have them, should be considered buildings. As a consequence, they may be subject to real estate tax to this extent.
This means that not the photovoltaic panels themselves are considered structures and building elements, but their building parts, e.g. structures located on the ground.
It is worth adding that in accordance with Art. 2 section 1 point 3 of the Act on local taxes and fees, buildings or their parts related to running a business are subject to real estate tax .
All types of panel mountings in the form of poles, metal structures or foundations will be subject to taxation , provided that the structures are used for business purposes.
The real estate tax rate for structures is 2% of the tax base.
Okay, so what will the situation look like in the case of agricultural production? Please remember that the regulations are still being created and will be subject to change.
The Ministry of Finance answered whether renewable energy in farm buildings will be subject to real estate tax
We asked the Ministry of Finance whether the regulations regarding real estate tax will be changed in the case of agricultural activities, e.g. if photovoltaic panels or a wind turbine are installed on a farm building.
It should be emphasized that we are talking here only about agricultural activities. We do not take into account the situation when a farmer runs a business, but only agricultural activity.
Only buildings or their parts related to business activity are and will be subject to real estate tax. Within the meaning of the Act on Local Taxes and Fees, economic activity does not include agricultural activity. This means that buildings or parts thereof related to agricultural activities within the meaning of the above-mentioned Act, are not subject to real estate tax – emphasize experts from the Press Department of the Communication and Promotion Office of the Ministry of Finance.
We asked whether the Ministry of Finance provides additional tax exemptions for buildings used for agricultural activities and renewable energy devices installed on them?
The Ministry of Finance in the proposed act (UD72) does not provide for additional exemptions from real estate tax for buildings used for agricultural activities – replied the Ministry of Finance.
This means that the real estate tax will cover only buildings related to running a business. Farmers conducting agricultural activities, their buildings and installations, in accordance with the Ministry of Finance's response, will not be subject to the new real estate tax.
The Ministry of Finance also replied that it did not plan to extend the property tax to farmers conducting agricultural activities.
The greatest problems regarding the extension of real estate tax to renewable energy installations, but also to food production and processing, are faced by food and agricultural product processors who run a business.
