The subject of cadastral taxation returns to the Polish public debate like a boomerang – this time thanks to the statements of the ruling camp politicians and their announcements about "social justice". Although there are no circumstantial legislative proposals yet and the subject is not included in the coalition agreement, more and more votes talk of the request to taxation owners with at least 3 housing units. But is this truly a way to solve the housing crisis, or a hidden way to the mediate class pocket drain and poorer citizens?
What is cadastral tax?
Cadastral taxation is the common name of the taxation calculated on the basis of the marketplace value of the property, not – so far in Poland – according to its surface area. The example shows the scale of the difference: for an flat worth PLN 600 thousand, a cadastral taxation of 1% would mean PLN 6 1000 per year, or PLN 500 per month. Currently, owners only pay about 60 PLN per year – 10 times less.
The rich pay? No, the mediocre will pay.
The politicians of the Left, PSL or Poland 2050 emphasize that it is only about taxing the owners of many apartments. This, according to Adrian Zandberg or Magdalena Biejat, is to "increase supply" and "make access to housing easier for young people". However, this argument ignores the key economical mechanisms – especially the phenomenon tax portability. In practice, the taxation cost will be pushed on tenants – in the form of higher rents. It is the mediate and poorer class who will pay the bill for "social justice".
Great funds will survive, average owners will lose
It is worth remembering that global investment funds are increasingly entering the Polish rental market, which are able to absorb the costs of the fresh tax. It is not their activity that will become the mark of cadastral taxation – it will hit tiny owners who inherited or worked hard for them for years.
A bureaucratic monster and a fresh field for corruption
The cadastral taxation requires a immense administrative effort – it refers to universal property taxing, maintaining current databases, hiring experts and creating a full fresh control structure. The Real property Management Act 1997 and the implementing regulations of 2001 already contain the appropriate legal framework for the mass valuation of real estate, but they have never been full implemented. Reason? Cost, complexity and a immense hazard of abuse. Underselling valuations, bribery, disputes of value – they are inherent elements of the “cataster”.
Lack of legal stableness – road to taxation of the first apartment
The past of Polish government gives no basis for optimism. In the last 10 years, nearly 250,000 pages of fresh government have been introduced. 1 can anticipate that erstwhile introduced the cataster will gradually be expanded: first to the 3rd apartment, then the second and yet – the first. first reliefs and low rates will be abolished over time. This is how all "careful" states work – they start with reliefs, end with expropriations.
Elders and unprofitable will be driven out of cities
In the darkest scenario, introducing cadastral taxation means expropriating older and poorer people. Those who have lived their full lives in the city centre may be forced to sale their properties if they do not bear a fresh tax. Their place will be taken by large players who will turn the apartments into a origin of profitable rental. So the effect will be the other to the announced – the lease marketplace will grow and private property will shrink even more.
Injustice and strategy Pathology
The value of the property frequently does not reflect the financial situation of the owner. The individual inheriting the home may not have income that will let it to pay PLN 10-15 1000 a year only due to the "holding" of property. Moreover, the marketplace value may increase without the engagement of the owner, e.g. due to the improvement of the area or the construction of infrastructure. That means taxing something a citizen had no influence on.
Brake for improvement and renovation
Cataster is besides demotivating. The owner, who plans to renovate, may leave it for fear that it will increase the value of the flat and thus increase the tax. The effect? The method deterioration of housing resources.
Conclusions: what should truly be changed?
Against political narrative, it's not a fresh tax, but reduction of existing Danes, deregulation and departure from EU climate taxes can increase housing availability for young people. Poles are already paying off any of the most costly mortgage loans in Europe. Additional loads will lead not to an improvement but to a dramatic deterioration.
Completion
The cadastral taxation is an thought that sounds good only on paper – in practice it will hit not rich speculators, but average people. It is another tool for the fiscal exploitation of society, which, alternatively of supporting improvement and ownership, promotes dependence and control.
Continued here:
Cadastral Tax: Who truly hurts? Review of impacts that the government does not show
