When incurring housing expenses for the purposes of applying the housing relief, special care should be taken as to the order in which they are incurred. And this applies not only to expenses for the repayment of credits (loans), but also to expenses incurred directly for the implementation of one’s own housing goals.
At the outset, it should be emphasized that according to Article 10(1)(8)(a-c) of the Polish PIT Act, the source of income is the sale of real estate or part thereof and a share in real estate for consideration, if the sale for consideration does not take place in the performance of business activity and was made in the case of a paid sale of real estate and property rights specified in letters a-c – before the expiry of five years, counting from the end of the calendar year in which the acquisition or construction took place.
In other words, in the case of the sale of real estate, before the expiry of five years from its acquisition or construction, income will be generated that should be taxed.
Importantly, it is possible to benefit from the exemption from taxation of such income with the application of the housing relief.
Pursuant to Article 21(1)(131), which regulates the housing relief, income from the sale of real estate for consideration (…) is exempt from income tax in the amount that corresponds to the product of that income and the share of expenses incurred for own housing purposes in the income from the sale of real estate and property rights for consideration, if, starting from the date of the sale for consideration, no later than within three years from the end of the tax year, in which the sale for consideration took place, the income obtained from the sale of that property or property right was spent for own housing purposes; Documented expenses incurred for these purposes are included in the amount of income from the sale of real estate and property rights for consideration.
In turn, according to Article 21(25), the above-mentioned expenses are considered to be m.in:
- expenses incurred for the acquisition of a residential building, its part or share in such a building, a residential unit constituting a separate property or a share in such premises, as well as for the acquisition of land or a share in land or the right of perpetual usufruct of land or a share in such a right, related to that building or premises,
- expenses incurred for the repayment of a loan (loan) and interest on this credit (loan) taken out by the taxpayer before the date of obtaining income from the sale for consideration.
With the application of the above-mentioned regulations, in the case of expenses incurred to repay a loan (loan), there is no doubt that such an expense will be qualified as an expense incurred for housing purposes only if it is incurred before the date of obtaining income from the sale for consideration. The wording of the provision directly indicates this.
The above is confirmed, for example, by the individual ruling of the Director of the National Tax Information of 6 August 2024 (file ref. no. 0114-KDIP3-2.4011.485.2024.3.MN): “One of such conditions is that the repaid loan was taken out before the date of obtaining income from the sale of real estate for consideration. As is apparent from the wording of Article 21(25)(2)(a) of the Personal Income Tax Act, the exemption referred to in Article 21(1)(131) of the above-mentioned Act does not apply to credits (loans) taken out after the sale of real estate. In this case, the fact that the loan was taken out for housing purposes is irrelevant, since the conclusion of the loan agreement will take place after the sale of the property. Such an allocation of funds is not provided for in Article 21(1)(2)(a) of the Personal Income Tax Act.”
And while it is impossible not to agree with such a position of the authorities in this part, sometimes a similar interpretation also applies to the order of expenditures incurred directly for one’s own housing purposes, as exemplified by the recently issued individual ruling of the Director of the National Tax Information of 7 July 2026 (file ref. no. 0113-KDIPT2-2.4011.473.2026.2.ACZ), where the conclusions indicate that:
“In your case, we are dealing with a situation in which your own contribution for the purchase of a new house was paid by you after receiving a deposit in July 2025 towards the sale price of the above-mentioned undeveloped plot and a share in the plot, but before receiving the amount constituting the next installment of the deposit payment (September 16, 2025) and before concluding the agreement for the sale of the above-mentioned undeveloped plot and share in the plot (September 15, 2025). As can also be seen from the description of the case – the amount of your own contribution paid by you in August 2025 for the purchase of a new house is not fully covered by the amount of the deposit received by you in July 2025.
As a consequence, the payment of the own contribution in the amount exceeding the amount of the deposit paid on 22 July 2025 – made on 27 August 2025 – i.e. before the conclusion of the agreement for the sale of the above-mentioned plot and share in the plot and before the receipt of the amount constituting the next instalment of the advance payment (16 September 2025) does not meet the conditions for benefiting from the above-mentioned tax exemption in this part.
Therefore, your position, in the part concerning the possibility of recognizing the amount of own contribution paid in August 2025 – in the amount exceeding the amount of the advance payment received on 22 July 2025 – as an expense for housing purposes – should have been considered incorrect.”
In other words, in the above-mentioned decision, the authority indicated that the exemption – housing relief – can only be used by income earned before incurred expenses for own housing purposes.
Such a position is controversial because the regulations do not explicitly indicate the order of purchase and sale activities. In addition, the opposite position to the one presented in the issued interpretation can be found in the judgments of administrative courts, such as the judgment of the Supreme Administrative Court of the following dates:
- 27 May 2021 (file reference number II FSK 3383/18);
- 25 April 2024 (file reference number II FSK 946/21).
In each of these decisions, the factual situation is slightly different, which makes us incline to far-reaching caution in such cases. Nevertheless, the conclusions of these judgments are that the money incurred for housing purposes does not have to come from the same “physically” money that was obtained from the sale of the previous property.
To sum up, there is no doubt that an expense incurred for the repayment of a loan (loan) is considered to be an expense for housing purposes when it is incurred before the date of obtaining income from the sale for consideration. At the same time, according to the latest interpretation of the Director of the National Tax Administration, the same applies to expenses incurred directly for housing purposes (construction/purchase of a house). And this despite a number of judgments of the Supreme Administrative Court emphasizing that the funds incurred for housing purposes do not have to come from the same “physically” money that was obtained from the sale of the previous property. Therefore, we recommend extreme caution and paying special attention to the sequence of actions taken that are to lead to the use of the housing relief.
