In the last October article in the series "Tuesday Mornings for Construction Workers", we decided to analyze for you two important resolutions of the Supreme Court related to agricultural real estate and the judgment of the Constitutional Tribunal on the amount of tax on underground garages.
Resolution of the Supreme Court of 21 June 2023, file reference III CZP 106/22
The resolution in question clearly indicates that an agricultural farm transferred under the Act of 14 December 1982 on social insurance of individual farmers and members of their families to a successor remaining in the system of statutory joint property of spouses is part of the joint property of the spouses .
Until the cited resolution was issued, there was no uniform position in court case law as to whether a farm transferred to a person in a marital community of property under the Act of 14 December 1982 was included in that person's personal property or the spouses' joint property. Even before the resolution, the prevailing view was that, unless otherwise stipulated, it was included in the joint property.
In practice, we have encountered numerous cases where the land and mortgage registers listed only the person to whom the property was transferred as the owner. However, in light of the aforementioned resolution, this entry is incorrect, and the spouse should also be entered as the owner in the land and mortgage register. This is crucial for correctly identifying the owners of such a property, whether for the purposes of a potential sale or for correctly determining inheritance shares. Therefore, it is crucial to examine not only the entries in the land and mortgage register but also the basis for the acquisition.
It is also worth recalling here that back in 2005, a seven-judge panel of the Supreme Court adopted a resolution of November 25 in case file reference III CZP 59/05 stating that "An agricultural farm transferred pursuant to the Act of October 27, 1977, on pension provision and other benefits for farmers and their families (Journal of Laws No. 32, item 140) to a successor remaining in the statutory joint property of spouses, belongs to the joint property." Thus, the Supreme Court maintained consistency in the interpretation of the provisions of subsequent acts regulating the transfer of agricultural farms.
Resolution of the Supreme Court of 17 October 2023, file reference III CZP 113/22
In the second resolution, which we are analyzing today, the Supreme Court found that "the exclusion provided for in Art. 1a item 1b of this Act shall apply to to disposal after geodetic division , subject to regulation under Art. 2b sections 1 and 2 of the Act of 11 April 2003 on shaping the agricultural system, constituting a plot of land with an area of less than 0.3 ha ."
The above resolution clearly determines the fate of agricultural real estate that, following geodetic division, will have an area of less than 0.3 hectares. According to the Supreme Court, it is not subject to the scope of application of the Act of 11 April 2023 on Shaping the Agricultural System (hereinafter referred to as "UKUR"). This means that, despite being separated from agricultural real estate, the remaining portion of the real estate loses its agricultural status upon division, and therefore the restrictions under the UKUR do not apply.
Therefore, trading in a plot of land that, as a result of subdivision, has an area of arable land smaller than 0.3 hectares will be much simpler, as it can be purchased by anyone, not just individual farmers. There is also no need to rely on the narrow list of exemptions provided for in the UKUR.
The interpretation of this provision is also consistent with the recent amendment, which we discussed in #174 , which explicitly states that UKUR provisions do not apply to agricultural properties with an area of arable land smaller than 0.3 hectares. In light of this change, any division of real estate to create an agricultural plot smaller than 0.3 hectares, so that the restrictions arising from the discussed act do not affect the sales agreement, will no longer be necessary.
Judgment of the Constitutional Tribunal of 18 October 2023, file reference number SK 23/19
Also this month, after four years of deliberation, the Constitutional Tribunal issued a ruling finding that it is unconstitutional to classify garages as non-residential premises for the purposes of calculating property tax .
The Constitutional Tribunal clearly found that
"Article 1a, paragraph 1, point 1 in conjunction with Article 2, paragraph 1, point 2, in conjunction with Article 5, paragraph 1, point 2, letter a and e of the Act of 12 January 1991 on Local Taxes and Fees (Journal of Laws of 2023, item 70) to the extent that they allow, for the purposes of real estate tax, the recognition of a separate garage located in a residential building as a part of a building of a non-residential nature, are inconsistent with the principle of specificity of levy regulations derived from Article 84 in conjunction with Article 217 of the Constitution of the Republic of Poland,
and
– to the extent that they make the application of appropriate property tax rates to a garage located in a residential building dependent on its separation or non-separation as an object of separate ownership, as a result of which the rate specified in Article 5, paragraph 1, item 2, letter e of the Act on Local Taxes and Fees applies to a multi-car garage located in a residential building that is an object of separate ownership, and not the rate specified in Article 5, paragraph 1, item 2, letter a of that Act, are inconsistent with Article 32, paragraph 1 in conjunction with Article 64, paragraph 2 and Article 84 of the Constitution.”
The Constitutional Tribunal's ruling opposes the practice of municipalities setting different property tax rates for separate garages (i.e., for which separate land and mortgage registers were maintained) compared to non-separate garages (i.e., those constituting part of shared properties). While the latter were subject to rates similar to those for residential premises, the former were significantly higher. This stemmed from the Local Taxes and Fees Act, which sets maximum tax rates, which are currently PLN 1 per square meter of usable area for residential properties and PLN 9.71 per square meter of usable area for other properties (although each municipality may set lower rates).
The consequence of the judgment is that municipalities are deprived of the right to set different property tax rates for separate garages and non-separate garages.
It is worth noting that the indicated provisions will cease to be in force on 31 December 2024. Appropriate statutory changes should be introduced by that time.
This article is for informational purposes only and does not constitute legal advice.
Legal status as of October 31, 2023
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