Poland's Short-Term Rental Shake-Up: Tax Changes Loom for Property Owners

New regulations being considered in Poland for short-term rentals may significantly alter how property owners are taxed, potentially moving away from the simplified flat-rate system currently in place. The proposed changes, currently under review by the Sejm (parliament), could compel owners to register as businesses and handle their rental income like entrepreneurs.

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The regulations on short-term rentals do not change any tax laws. However, they could be a pretext for the tax office to change its views.

Currently, the Polish tax authorities permit property owners to choose their tax method for rental income, including short-term lets. This often involves a flat-rate tax of 8.5%, increasing to 12.5% for income exceeding 100,000 Polish zloty annually. Tax advisors confirm that this applies even to owners with multiple properties who utilize platforms like Booking.com or Airbnb, or work with tour operators, without requiring them to establish a formal business entity.

However, a proposed amendment to the Act on Hotel Services introduces a new definition of such services. This definition includes "short-term, lasting less than 30 days at a time for one client, generally accessible renting of houses, apartments, rooms, accommodation places, places for tents or caravans, and providing related services within the facility." The government has indicated that "hotel services will also include short-term rentals of apartments, e.g., for a few days."

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This applies also to so-called short-term rentals, i.e., per day or week. Income from this title can be settled privately and taxed at a flat rate (8.5%, and after exceeding 100,000 PLN in annual income, 12.5%).

This reclassification raises concerns. Tax advisors note that hotel services are considered business activities, meaning providers would need to register a company. While the tax rates themselves might not change drastically, operating as a business entails mandatory health insurance contributions and often social security payments, in addition to increased administrative formalities. This potential shift could impose substantial new costs and burdens on property owners currently benefiting from the simpler private rental tax regime.

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Hotel services are business activities. A taxpayer providing them should establish a company. Then they have a choice of three taxation variants: scale, linear PIT, or flat rate.