Selling a Plot of Land and Taxes – What You Should Know

Tax on the sale of a plot of land

During a transaction involving the purchase and sale of a plot of land, both parties will be subject to tax. The buyer will have to pay PCC tax – tax on civil-law transactions. The buyer will also be subject to another tax – income tax resulting from enrichment. Income tax on the sale of real estate amounts to 19% of the income obtained in this way. This means that if someone buys a plot for PLN 100,000 and then sells it for PLN 150,000, the tax will amount to 19% of the difference, that is, PLN 50,000.

When do you not have to pay tax on the sale of real estate?

You will pay the tax if five years have not passed since the date of acquiring the real estate. However, remember that in this case, the five-year period is calculated from the end of the calendar year in which five years have passed since the date of acquiring the plot. See the latest listings in the real estate category mamtoo.pl

People who received real estate through inheritance will also be required to pay this tax. If someone wishes to sell a plot immediately after inheriting it, they will not pay tax, provided that the person who bequeathed it had owned it for at least five years.

If a person acquired sole ownership of a plot after the division of marital property as a result of divorce, the situation is similar to that in the case of inheritance, with the difference that the five-year period is calculated from the day the spouses acquired possession of it, not from the day of the divorce.

You will not pay tax when selling agricultural land in two cases. An agricultural plot will be exempt from income tax if it was previously part of an agricultural holding and provided that the land does not lose its agricultural character after the sale.

How can you avoid paying the enrichment tax after selling a plot of land?

One condition allows you to avoid paying income tax regardless of the exceptions mentioned above. If the person selling the real estate in the form of a plot undertakes to spend the income from its sale on other housing purposes within three years from the end of the calendar year in which the sale took place, they will not have to pay the tax.

By what deadline must you pay tax on the sale of a plot of land?

If you are not exempt from the obligation to pay tax on the sale of a plot in any of the ways mentioned, you will have to file a PIT-39 return. The deadline for filing the return is April 30 of the year following the transaction.