Alliance: Taxation of tenancy income for individual investors

The COVID-19 pandemic has transformed many sectors of economy. It is no different for the domestic real estate market. In 2020, two basic trends could be observed in this respect :

1. purchase of real estate to diversify the investment portfolios – especially estates located in cities with high growth potential, intended for sale or rent.

2. increased interest in real estate in the most popular tourist destinations in Poland, intended for short-term rental, possibly cased by the travel restrictions.

If you consider buying real estate for the purposes of short-term rental, you will notice a visible increase of demand, especially in the premium section of the market. This has led to increase of average prices In the most popular seaside resorts in Poland, e.g. Jurata or Jastarnia, with prices ranging between EUR 5,000 and EUR 8,000 per m2.

However, the increase of prices could be noticed all around Poland. According to the data for the third quarter of 2020, the prices have increased by an average of 10.9% as compared to 2019 and this is one of the highest increases recorded in the EU (the average for the euro zone was 4.9%).

The average price per m2 of a residential property in Warsaw is currently estimated at EUR 2,326, but the prices in other European capitals are much higher. The prospects of growth often have impact on decisions on investment in Polish real property.

Should you have made such an investment or consider it for the future, we encourage you to read our Newsletter concerning the taxation of income of individual investors from the rental of Polish real estate.

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