According to the Local Taxes and Fees Act the real estate is subjected to a local tax. Pursuant explanation of the National Revenue Agency № 3-568 dated 10 May 2021, the taxation should be made according to the intended use of the property established in the approved investment plan and the other construction documents. The Nation Revenue Agency also states in its explanation that in the case of discrepancy between that intended use and the actual one, the latter is relevant. However, the Spatial Development Act also includes a relevant provision, according to which the use of constructions or parts of them in a way that does not correspond to their intended use or in breach of the commissioning conditions is not allowed. The Act provisions sanctions if violations are established.
This situation raises the following question – given that many studios are used by their owners as residential properties, could they be declared and subjected to taxes as such, if the intended use of the real estate is not changed in the procedure prescribed by the law?
The National Revenue Agency has given multiple statements in reply to this question that permanently declare its position that despite the regulation in the Spatial Development Act and the sanctions provisioned by it, many real estates – including studios, are actually used for residential purposes and therefore should be subjected to taxes as such. In his statement, the Deputy Executive Director of the National Revenue Agency declares also that a studio may benefit from the provision of Article 25, para. 1 of the Local Taxes and Fees Act, which envisions that a property, that is a main residence, is subject to tax relief of 50% of the annual amount of the property tax. For that purpose, the studio must meet the definition of “housing” given by the Spatial Development Act – “a set of premises, roofed and/or open spaces, constituting a single functional and spatial whole and designed for the satisfaction of housing needs”; as well as the definition of “main residence” given by the Local Taxes and Fees Act – “real estate serving to satisfy the housing needs of the individual and the members of the family thereof during the predominant part of the year”.
This position is taken not only in the statements of the National Revenue Agency, but in the case-law of the administrative courts as well. This leads to a clear and unified regime of taxation of real estates, used for residential purposes, no matter what is their intended use established in the approved investment plan and the other construction documents.