2.02.2024 Real estate law

Changes to tax on civil law transactions from 2024


A higher rate of tax on civil law translations (PCC) for those buying several properties (the sixth and subsequent flat) and exemption from PCC tax for buyers of the first flat is a complete revolution in taxation of real estate transactions. On the one hand, this is a money-saver for buyers, and on the other, arouses certain doubts as to the application of a higher rate of tax on civil law transactions.

The amendment to the Civil Law Transactions Tax Act, adopted on 26 May 2023, introduced significant changes to real estate transactions. On the one hand, they are aimed at limiting the purchase of properties in bulk on the primary market by institutional investors, and on the other hand, they are intended to help people buying their first flats. Some of the new rules apply from 31 August 2023, while others came into force on 1 January 2024.

The first flat or house exempt from PCC tax

On 31 August, 2023, the first of those changes came into force, namely exempting the buyer of the first flat from the obligation to pay tax on civil law transactions:

  • self-contained flat constituting a separate property
  • cooperative right to a flat
  • a single-family house (a plot of land developed with a single-family house).

It should be remembered that the above exemption from the obligation to pay tax on civil law transactions, in principle:

  • applies to the purchase of real estate from the secondary market(on the primary market, the sale is subject to VAT) and
  • is intended for natural persons purchasing their first apartment or house.

The exemption also applies to persons who have a share in real estate (not exceeding 50%), provided that it was acquired by inheritance.

Sixth and subsequent flat with a higher PCC rate

With regard to limiting the purchase of flats in bulk by investors, as of 1 January 2024, the legislator decided to increase the tax rate on civil law transactions to 6%. This rate applies when the buyer acquires at least six flats constituting separate properties in one or more buildings developed on one parcel of land, subject to value added tax, on the basis of a contract concluded with the same buyer for the sale of the sixth and each subsequent flat. The obligation to pay tax on civil law transactions arises independently of the obligation to pay VAT, which means that such transaction is taxed twice. In addition, a 6% rate also applies to acquisition of a share in at least six units in such a building or buildings.

To sum up, the increased 6% rate of tax on civil law transactions applies when:

1. The subject of the sale is a flat or a share in a flat,

2. The flat subject to sale constitutes a separate property,

3. The flats are located in one or more buildings developed on one parcel of land,

4. Sale of flats or shares are subject to VAT,

5. At least six flats or shares in flats are acquired, and

6. The sales contracts were concluded with the same buyer.


Higher PCC rate only on transactions on the primary market

It should be noted that the increased rate will apply to sales contracts subject to VAT. Therefor, the change applies mainly to retail sales on the primary market, while flats from the secondary market purchased from a private person will continue to be taxed at the current rate of 2%. As a consequence, a person who buys at least six flats will pay the tax on civil law transactions and VAT starting from the purchase of the sixth flat.

The subject of sale must only be a flat or a share in a flat and the flats must constitute properties separate from the land. Such wording directly indicates that the increased 6% rate does not apply to the sale of commercial premises or houses, or even entire buildings.

Another issue that needs to be clarified is the condition that the purchased flats should constitute properties separate from the land, which entails the obligation to separate them in accordance with the provisions of the Flats Ownership Act. Thus, even independent rooms in the building separated by means of partitions will not constitute a separate property without a constitutive entry in the land and mortgage register.

The last issue that raises doubts is that the same party (buyer) should appear in all contracts and that there is no time limit for the application of the increased 6% rate of tax on civil law transactions. As a result, if an investor has previously purchased five apartments and after some time decides to buy a sixth one from the same seller, 6% tax will be charged on the price of the sixth apartment.

On the other hand, the transitional provisions indicate that tax regulations in the current wording apply to the purchase of flats effected before 1 January 2024. And so, doubts will arise if 5 previous apartments were purchased before 1 January 2024, while the sixth flat is acquired after that date. The Act does not answer this question and this issue will have to be interpreted.

Purchase of flat by several buyers to joint ownership

The principle of tax on civil law transactions is to tax the subject of the transaction, not individual taxpayers. As a result, a joint and several obligation to pay the tax was introduced for all buyers purchasing a flat in shares under a single sales contract. This means that even acquiring a small share in the co-ownership of the flat, as long as the transaction is for the entire flat, the buyer will be liable to pay the entire tax, as this is the essence of joint and several liability.

This rule will be relaxed with the 6% tax rate on civil law transactions. It was decided that only persons who meet the conditions for taxation will be liable for payment of this tax and only the shares they acquired will be subject to taxation.

Real estate law – see how we can help!


Grzegorz Witczak Director of the Commercial Law and Property Department, Advocate
TGC Corporate Lawyers
Damian Bożkiewicz Junior Associate in the Commercial Law and Property Department
TGC Corporate Lawyers
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