Two years after the Constitutional Tribunal’s judgment, local authorities still interpret real estate tax differently

The second anniversary has now passed since the Constitutional Tribunal issued its judgment (judgment of 4 July 2023, case file no. SK 14/21) concerning the Act on Local Taxes and Charges, which led to significant changes to its provisions. The amendment was intended to organise the rules governing the taxation of individual taxpayer assets and, above all, to facilitate the classification of objects as structures. Has this objective been achieved?

Let us consider this issue from the perspective of selected individual tax rulings issued by local authorities in the meantime.

Can a facility map be considered an advertising board?

One of the most significant changes introduced through the amendment to the Act on Local Taxes and Charges was the inclusion in Article 1a(2) of a definition of a structure that is independent of construction law. Under this definition, a structure includes, among other things, an object that is not a building and is listed in Appendix 4 to the Act, together with installations enabling its use in accordance with its intended purpose. Item 25 of the aforementioned appendix lists, among other things, an advertising board as an object meeting the definition of a structure for real estate tax purposes. This recently became the subject of a dispute between a taxpayer and the authorities of Wrocław.

An entrepreneur engaged in property leasing and management submitted an interesting enquiry to the Mayor of Wrocław. The taxpayer’s doubts concerned several elements located within a logistics centre owned by the company and used by various businesses. The most controversial issue was whether an information pylon should be subject to real estate tax. 

According to the information provided by the Wrocław-based entrepreneur, the information pylon serves exclusively an informational and organisational function, namely indicating which entities are located on the property and facilitating navigation around the logistics centre. The object does not promote any services or goods and therefore has no advertising function and should not be regarded as an advertising board. 

However, in its ruling of 20 November 2025, reference no. WPO-DNT-310.1.6.2025.JF, the Mayor of Wrocław noted that, in addition to a site map, the pylon also displayed the company’s logo and the symbol of the BREEAM environmental certification. The authority further observed that the object was situated in a prominent location, indicating that its purpose was to attract attention and identify the brand in public space. According to the Mayor of Wrocław, these elements were sufficient to conclude that the pylon met the definition of an advertising board and was therefore taxable as a structure.

According to the local authority, the logo functions as the company’s calling card and forms part of its visual identity system, making it an element of an advertising nature. Similarly, displaying the BREEAM certification symbol should be regarded as a marketing activity and therefore as advertising. As a result, the authorities of Wrocław classified the entire pylon as an advertising board.

This ruling clearly demonstrates that, despite the legislator introducing a catalogue of structures in the appendix to the Act on Local Taxes and Charges, difficulties still arise regarding the scope of individual terms contained within it. Tax authority practice shows that the definitions provided both in the Act and in the appendix are often interpreted very broadly, which consequently creates significant tax risks for taxpayers.

Taxation of installations enabling the use of a building in accordance with its intended purpose

When discussing recent rulings issued by local authorities, attention should also be paid to an issue which, as practice demonstrates, is among the most problematic and high-risk areas of real estate taxation under the provisions applicable from 2025.

This concerns the taxation of installations that ensure the proper use of buildings and structures in accordance with their intended purpose. 

As a rule, structures and buildings are taxed together with installations enabling their use in accordance with their intended purpose. However, as demonstrated by a ruling issued by the Mayor of Lublin, the correct classification of such installations is not always straightforward. 

A company engaged in the supply of district heating to buildings connected to a heating network sought clarification on this issue. The taxpayer wanted confirmation that heating substations, both those located within buildings and those situated outside them, would not be treated as structures but rather as installations necessary for using a building in accordance with its intended purpose.

In its application for a ruling, the company stated that, as a rule, a building together with its installations constitutes a coherent and functional object whose components are necessary either for carrying out specific internal processes or for enabling users to utilise the facility in line with its purpose. A heating substation, meanwhile, enables, among other things, the delivery of heat from the district heating network to the building, the distribution of that heat, and the measurement of its proper circulation within the building’s heating system, thereby ensuring that the building can be used in accordance with its intended purpose.

In addition, the company argued that heating substations should not be subject to real estate tax because they were not constructed through construction works but were manufactured elsewhere and subsequently installed at their final location. 

The Mayor of Lublin, however, did not share this view in the ruling of 9 July 2025, reference no. PE-OR.310.3.2025. In the reasoning, the authority stated that construction works encompass not only construction in the ordinary sense of the word but also installation. According to the Mayor of Lublin, attaching prefabricated elements to a foundation through installation (that is, assembling ready-made components), or even simply placing an object on a foundation without connecting it, satisfies the definition of installation. Consequently, because the heating substations were erected through construction works, they meet the definition of a structure. Furthermore, they should be treated as separate elements of the transmission network rather than as part of building installations, because a building may be heated in other ways, for example through its own boiler room or a heat pump. This means that a heating substation is not an indispensable element ensuring the functionality of a building.

How should real estate taxpayers respond to the current situation?

The individual real estate tax rulings issued by local government authorities cited above illustrate only a few of the many problems that entrepreneurs may face. For years, other disputes have also persisted, including those concerning the taxation of transformer stations, gas pressure regulators, pumps and many other installations used in both buildings and structures. Unfortunately, as the examples above demonstrate, the new provisions have not resolved taxpayers’ problems. 

Analysis of these rulings leads to a rather surprising conclusion: today it is easier to say what is not subject to real estate tax than to identify what should genuinely be covered by it. One may gain the impression that we have reached a situation in which virtually anything can be taxed, while local authorities interpret definitions, particularly the concept of a structure, exceptionally broadly.

What can an entrepreneur do in such circumstances? First and foremost, it is worth approaching the matter calmly. The fact that a local authority considers a particular asset to be subject to real estate tax does not automatically mean that such an approach is correct. Examination of some of the reasoning provided in these rulings shows that the arguments presented by tax authorities may be open to challenge. As a result, it may be worthwhile appealing against such decisions with the assistance of advisers experienced in representing taxpayers in court proceedings.

At the same time, it should not be forgotten that real estate tax, although often overlooked, should be monitored on an ongoing basis, not only by businesses operating extensive technical infrastructure, manufacturing plants, warehouses, logistics centres, energy installations or renewable energy projects. In fact, failing to declare specific assets in the tax returns of any entity may result in severe financial consequences.

Given the complexity of many of these issues, in future articles RSM Poland experts will focus on explaining real estate tax matters in an accessible manner, drawing on examples from their day-to-day work with clients throughout Poland.

If, after reading this article, you have any questions regarding real estate tax, we remain at your disposal and invite you to contact our tax advisers.