Is it normal to pay 22% tax on renting a flat?

Hello,

I was surprised to see that, for my flat in Krakow, I will be charged 22% tax on the monthly price for the flat. I was not expecting that. Is it normal procedure in Poland for the tenants to pay VAT on the rent?

I'm supposed to sign the contract tomorrow morning at the real estate agency. I payed the "kaucja" with cash to the landlord yesterday. He gave me the key in exchange and I moved in yesterday evening.

Thanks

Moonlighting

Are you renting it with an invoice for office use? That would (but doesn't always need to) incur 22% VAT. Residential lettings don't.

Otherwise no.

I'd be very wary of this landlord if I were you. And the agent too.

No, it's not for office. It's private. The cost was announced 1600 PLN + czynsz 200 PLN if I remember correctly + media. I must go to the agency tomorrow morning to sign the contract which will have been translated in English for me and I'm asked to bring 1952 PLN for the first month, described as 1600 PLN + 22% tax. The agency is Volker, ul. Karmelicka, Kraków.

This sounds a bit strange. I'd ask them about the tax before parting with it.

Take someone along to compare Polish and English contracts - it's a *very* common trick to get English (or German, or whatever) speakers to sign both versions, and the Polish contract will have some very nasty clauses included in it - such as a statement that in the event of dispute, the Polish contract will have precedence.

I'd also say that in Poland, if something feels wrong, it usually is wrong.

It's OK. The issue was fixed. Two persons (my Polish accountant + another Belgian who settled in Poland a few years ago) confirmed that it's normal to pay VAT on housing (even private). It was just my ignorance of the fact.

Moonlighting

I'd get another accountant, pretty quick. There is no VAT on flat rental for residential use.

Only for companies needing a faktura (and this is not always the case) or short-term holiday lettings. Apartment sales can be subject to VAT at 22%, under certain circumstances (over 150sqm, with a residents' swimming pool). But not normal flat rental.

Perhaps your friend is confusing this with the flat owner's personal income tax. Though this wouldn't be 22%. Are you renting from a person or a limited company?

From what I understand, you have to pay VAT on housing if renting from a company, not from an individual (it's taxed as income on their behalf)....BUT, it should already be included in the advertised price. Just like buying a car, groceries, etc.

Edit: Alright, seems like jonni is much more competent on this...

You flatter me. LOL

It's just that I've rented flats here a few times, offices too. But there are also two Polish people within shouting distance who are both sure that there shouldn't be VAT added to the price. Neither were sure about rentals from companies, but as you said, any VAT should be included in the price.

It isn't uncommon in PL to offer a flat at a particular price, wait until you're ready to move in, pen in hand to sign the contract, then spring something on you at the last minute when it would be inconvenient to withdraw.

jonni / convex
I'm renting from a company. And from the further informations I got after long conversations on Skype with my 2 contacts, it appears that I'm definitely supposed to pay this 22% tax.

As I'm coming from a country where the tax is supposed to be included on the displayed price (just like cars and groceries), I was surprised. I've run a business for 12 years so I'm used to seeing prices announced without tax, but I didn't expect it to occur in Poland, especially with estate. But apparently I'm wrong. It can happen, and I was just not aware of it.

BrutalButcher
Yeah, I had the time to view your posted image. Don't worry, I was not offended. I saw the joke ;-)

I just asked my friend, over gadu gadu, who's a tax inspector and briefly explained the situation.

He told me (but he'll check tomorrow) that if you're a private individual and you're renting from a company, there is VAT, but it's 0% because you are renting it for non-commercial use. Even hotels charge only 7%.

90% of people in Poland rent a flat in the shadow economy so nobody knows about the tax :)

But in reality you have to pay the tax even if you stay for a week in your friends flat and you don't pay them anything for it. Welcome to Poland :) or should I say EU...

there is no VAT in private housing rentals. I've had 4 rental contracts as a renter, and never have I seen VAT mentioned in the contracts. Each time has been done with an agent.

But for my business rental contracts, there is 22% VAT written in the contract.

something is fishy!!!!

Thanks for your replies.

Before I went to the agency this morning, my accountant confirmed me that if the owner was a company, I would have to pay VAT, but if it was a physical person, there would not be VAT.

Actually I just got back from the estate agency to sign the contract and everything is OK. There is no VAT indeed on the rent I will pay monthly to the owner, as it is a contract between two physical persons.

In fact, the agency charged me the equivalent of 1 month of rent as a commission for their service. As the agency is a company, they apply 22% VAT. They gave me a receipt for it and I will put their invoice in my professional expenses. It was my misunderstanding, for at first I had thought that the requested amount with VAT was due for paying the rent of January.

^ My first reaction was that you must be getting confused with the agency fee (which is subject to VAT).