Property Purchase Tax – What Should You Know at the Start?

Before considering how to avoid tax on buying an apartment, you need to understand when the obligation to pay it arises in the first place. PCC, the Polish tax on civil law transactions, applies to purchases of properties on the secondary market. It amounts to 2% of the property's market value and is payable by the buyer when signing the notarial deed. For an apartment worth PLN 600,000, this means an additional cost of PLN 12,000.

Wondering who pays the tax on civil law transactions? It is always the buyer, not the seller. The notary collects the payment and transfers it to the tax office, so the buyer does not need to file a separate tax declaration.

However, PCC is not the only cost associated with a property purchase. Additional costs when buying an apartment include notary fees, court fees for registering ownership in the land and mortgage register, and potentially a real estate agent's commission.

Before finalising the purchase, it is worth preparing a complete breakdown of all expenses.

How to Avoid Tax on Buying an Apartment? Legal Exemptions and Exceptions

Polish regulations provide several situations in which the tax on buying an apartment does not apply at all. Below are the most important examples.

Buying One of Your First Apartments on the Primary Market

The most common and accessible way to avoid PCC is to purchase a property directly from a developer. Transactions on the primary market are subject to VAT, which is already included in the price of the property by the developer. Since the PCC Act excludes transactions subject to VAT from PCC taxation, the buyer does not pay the additional 2% tax (an exception applies to bulk purchases starting from the sixth apartment within the same development project, which since 2024 are subject to a 6% PCC rate).

This is one of the reasons why buying a new apartment from a developer is often more tax-efficient than purchasing a property on the secondary market.

Relief for First-Time Home Buyers

Since 2023, an exemption from PCC has been available for individuals purchasing their first home on the secondary market. The condition is that the buyer does not currently own and has never previously owned ownership rights to another apartment, house, or share in residential real estate.

The exemption covers the purchase of one property within a transaction that qualifies for this relief. If you are purchasing jointly with a partner, both of you must meet this condition to benefit from the exemption in full.

Acquisition Through Donation or Inheritance

Transferring property within a family through a donation or inheritance is not subject to PCC. In such cases, inheritance and donation tax may apply; however, immediate family members (the so-called "zero tax group") are exempt provided they report the acquisition to the tax office within six months.

Purchase from a VAT Taxpayer Conducting Real Estate Business Activities

As with the primary market, a transaction subject to VAT cannot be simultaneously taxed with PCC. If the seller is a business entity and settles the transaction as a VAT-taxable activity, the buyer does not pay the 2% tax on civil law transactions.

How to Avoid PCC When Buying a House?

The answer to how to avoid tax when buying a house is almost identical to that for apartments. PCC amounts to 2% of the market value of the property regardless of whether you are buying an apartment or a detached house. The same exemptions apply:

purchasing from a developer or a company that charges VAT,

relief for people who do not own another property,

acquisition through donation or inheritance.

An important difference is that when purchasing a house together with land, each asset component may be taxed separately. It is worth checking the amount of PCC in a specific case, taking into account both the value of the building and the land.

Mistakes to Avoid When Planning Purchase Costs

Buyers often assume that a cash transaction eliminates all additional fees. This is not true. Paying without a mortgage does not exempt you from PCC or notary fees. Moreover, when purchasing with cash, you do not benefit from the bank's property verification process, which typically includes checking the land and mortgage register and the legal status of the property before financing is released.

Another common mistake is understating the transaction value in the notarial deed to reduce the taxable base. The tax office has the right to challenge the declared price if it significantly differs from market value and may impose additional tax, interest, and penalties.

Such actions can expose the buyer to serious financial and legal consequences.

It is also important to remember that when planning your budget, you should account for the full range of potential costs associated with completing the transaction, including:

notary fees (depending on the property's value),

court fees for registering ownership in the land and mortgage register,

fees for establishing a land and mortgage register (if one does not already exist),

PCC tax, where applicable,

a real estate agent's commission (if using agency services).

The Primary Market as a Way to Avoid Property Purchase Tax

By purchasing directly from a developer, you gain not only a brand-new property but also a more favourable tax arrangement. The absence of PCC on primary market transactions represents a tangible saving, especially with higher property prices. For an apartment costing PLN 700,000, the difference amounts to PLN 14,000, which can instead be allocated to interior finishing and furnishing.

By choosing an established developer such as J.W. Construction, you can be confident that the entire purchasing process will be carried out efficiently, safely, and in full compliance with current regulations. Developers operate under the provisions of the Polish Development Act, which provides buyers with a range of protections, such as escrow housing accounts and detailed information prospectuses.

The combination of favourable taxation and a legally regulated purchasing process makes the primary market the first choice for many buyers.

FAQ – Frequently Asked Questions

What can I do to avoid paying tax when buying an apartment?

The most effective solution is purchasing an apartment from a developer on the primary market, as VAT-covered transactions are not subject to PCC. Another option is taking advantage of the exemption available to first-time buyers on the secondary market, provided you meet the statutory requirements.

When do you not have to pay tax when buying an apartment?

The obligation to pay PCC does not arise when purchasing from a developer or another VAT taxpayer, when buying a first home on the secondary market under the statutory exemption, or when acquiring property through inheritance or donation from immediate family members.

Why is buying property with cash considered a mistake?

Paying in cash does not exempt you from PCC or other fees. Understating the transaction value in the notarial deed in order to reduce the tax base is illegal and may result in additional tax, interest charges, and penalties imposed by the tax authorities.