Betterment Levy – What Is It? How Much Does It Cost?

When Is the Betterment Levy Charged?

The municipality may charge a betterment levy when the value of a property increases as a result of specific events. This primarily concerns the division of a property, the consolidation and subsequent division of land, and the construction of technical infrastructure facilities with public funding. In practice, this may include, for example, the construction of a road, a water supply network, a sewage system or other facilities that increase the attractiveness and value of nearby plots.

However, the betterment levy is not charged automatically. The decision is made by the wójt, mayor or city president, and is based on an increase in the property's value confirmed by a property appraiser. If the value of the plot has not increased, the levy should not be charged. It also matters whether the municipal council has adopted an appropriate resolution specifying the levy rate for the given type of event.

How Is the Betterment Levy Calculated?

The amount of the betterment levy is determined on the basis of the difference between the property's value before the event and its value after the division, consolidation or construction of infrastructure. The valuation is prepared by a property appraiser, who draws up a valuation report. Only on this basis can the municipality calculate the amount due, applying the percentage rate specified in the municipal council's resolution. If you are interested in an example of calculating the betterment levy, it can be presented as follows: if the value of a plot increases by PLN 100,000 and the rate is 30%, the maximum levy would be PLN 30,000. The levy is therefore not determined arbitrarily, but results from the valuation and applicable limits.

The maximum rates depend on the reason for the increase in the property's value. In the case of a property division, the levy may amount to up to 30% of the difference in value. In the case of consolidation and division, as well as the construction of technical infrastructure facilities, the limit is generally up to 50% of the difference in value. In special cases concerning properties located within a Special Revitalisation Zone, the rate associated with infrastructure construction may be higher, reaching up to 75%. However, the final amount depends on the specific municipal resolution and the valuation results.

Can the Betterment Levy Be Avoided?

The betterment levy should not be charged if the property's value has not increased. This is why the valuation report and the possibility of verifying the assumptions adopted in it are so important. The property owner may analyse the municipality's decision, check the accuracy of the valuation and use the available appeal measures. In practice, therefore, the issue is not simply to “avoid” the levy, but to check whether it was charged correctly and in accordance with the law.

The time limit for the municipality to act is also important. As a rule, proceedings concerning the levy should be initiated within the statutory period, most often within three years of the event causing the increase in value—for example, from the date on which the decision approving the division became final or from the creation of conditions for using the completed infrastructure. In some cases, it is also possible to pay the levy in instalments, which may reduce the owner's one-off financial burden. Before taking action, it is worth analysing the decision with a lawyer or property appraiser, especially if the amount of the levy raises doubts.