Changes in the so-called housing tax relief

On December 29, 2020, the Ordinance of the Minister of Finance, Funds and Regional Policy on the extension of the deadline for spending for own housing purposes the income obtained in 2018 from the sale of real estate or property rights came into force. The deadline has been extended from 2 to 3 years, so it expires on December 31, 2021.

Let us remind you that the income from the sale of real estate and property rights, in accordance with art. 19 of the Personal Income Tax Act, is its value expressed in the price specified in the contract, less the costs of paid disposal, e.g. notary costs or intermediation costs. The condition for using the so-called housing tax relief is spending of this income over a specified period of time for your own housing purposes.

The published regulation applies only to those taxpayers who sold the property in 2018. The amendment to the Personal Income Tax Act, which entered into force at the beginning of 2019, extended the period from 2 to 3 years in which money from the sale of real estate can be used for own housing purposes and thus – allowing taxpayers not to pay the tax, but it included only people who sold the property after January 1, 2019.

Taxpayers who sold real estate in 2018 to take advantage of the so-called housing tax relief, had to spend the revenues for their own housing purposes under the old rules – by the end of the 2-year period at the latest, counting from the end of the year in which they sold the property, i.e. until the end of 2020. The deadline has been extended by one year, which is undoubtedly beneficial, especially during the ongoing pandemic.