News

25/01/2016

Purchase of property and the height of PCC

In accordance with the provisions of the Act on the civil law transactions tax, in the case of a property sale the transaction is taxed 2% tax on civil law transactions. Receivable of tax authorities is paid by the buyer on the day of contract of sale transferring the ownership. The tax amount depends on the market value of the property.

Is an essential fact that in the case of real estate sales contract often the final agreement for the transfer of ownership is preceded by previously signed a preliminary agreement. Due to the lapse of time between the signing of the preliminary agreement and the final agreement could cause a significant change in the market value of the property. In such cases, the key issue is to answer the question whether the basis for determining the amount of PCC is the market value indicated in the preliminary agreement, or the market value of the property at the time of concluding the final agreement?

Debated issue for a long time was the cause of disputes between taxpayers and the tax authorities, and consequently has also become a study subject of Regional Administrative Court in Poznań.

WSA in Poznan hearing the case of the taxpayer who in 2005 signed a preliminary agreement, but property acquired only after five years, stood on the side of the taxpayer confirming that property buyers can pay PCC from the price fixed even a few years back (judgment of the Administrative Court in Poznań of 16 December 2015., Ref. Act III SA / Po 1924-1914).

Considering the above it must be held that the basis for the calculation of the PCC may be the value of the property indicated not only in the promised contract of sale, but also in the preliminary contract of sale of real estate.