Last Updated on September 18, 2026
The Polish Deal (also known as the New Polish Order) was introduced on 1 July 2022, though some of the regulations will not take effect until 1 January 2023. In this guide, you will find everything you need to know as an overseas landlord with property in Poland about the Polish Deal.
What is the Polish Deal?
The Polish Ministry of Finance implemented some new legislation aimed at simplifying tax settlements.
The new Polish Deal includes tax changes that will affect everyone who pays them, including landlords (both residents and non-residents). Let’s take a look at the current rental income taxes and what has been implemented.
| Before Polish Deal changes | Since 2023 |
|---|---|
| General taxation could apply | Ryczałt is the private-rental regime |
| Expenses could be relevant under the previous system | Tax is based on revenue |
| Depreciation could be relevant under previous rules | Residential-property depreciation treatment changed |
| More complex calculation | Simpler revenue-based calculation |
How is Polish rental income taxed now?
At present, all Polish private landlords can choose between two options when paying their rental income tax:
- Reduced tax rate – 8.5% for income up to 100k PLN and 12,5% for income over 100k PLN. This is the simplified tax method, where no deductions are permitted and only real income is taxed (amount of rent paid by a tenant). Private landlords in Poland who operate on a small scale and don’t want the hassle of bookkeeping frequently use the reduced rate.
- Progressive rate – With a tax-free allowance of 8kPLN, the tax rate is currently 17% for income up to 85,528 PLN and 32% for income over 85,528 PLN. A number of deductions are allowed: service fees and utility bills (if not paid by a tenant), property tax, insurance, maintenance costs, renovation costs, the cost of purchasing new equipment, the interest rate on the mortgage, and depreciation of the property (1.5% to 10% of the property value per year).
Landlords who have a lot of expenses frequently use the progressive rate. It requires more time because all expenses must be supported by invoices and receipts, which must then be kept and property owners might need assistance from a qualified accountant.
The primary consideration, in this case, is the property’s depreciation write-offs, which represent a considerable deduction from gross income. However, applying the progressive rate frequently results in paying less tax or none at all.
The following tax options are currently available to all landlords who conduct business activity by renting out their properties in Poland:
- Reduced rate (same rates as individuals)
- Progressive rate (same rates as individuals)
- 19% flat tax with allowable expenses
- Tax cards are the most straightforward form of taxation, requiring neither tax declarations nor bookkeeping. Regardless of the amount of the income, tax is paid on the gross amount. The type of business activity, the number of employees, and the number of residents in the tax district all affect the tax rates.
FAQs
Is Polish rental income taxed at 8.5% or 12.5%?
Under the Polish Deal rules for private landlords, rental income is taxed at both rates depending on revenue threshold: 8.5% applies to annual rental income up to PLN 100,000, and 12.5% applies to any amount exceeding PLN 100,000. Under this lump-sum system (ryczałt), the tax is calculated directly on gross income, meaning expenses cannot be deducted.
Can landlords deduct expenses from Polish rental income?
No. Since the Polish Deal made lump-sum taxation (8.5%/12.5%) mandatory for private rental income in 2023, landlords can no longer deduct expenses or claim depreciation. Tax is calculated on gross rental income, with no allowance for costs like repairs, mortgage interest, or property management fees.
Does the Polish Deal apply to foreign property owners?
Yes. Non-resident landlords who earn rental income from property in Poland are subject to the same rules as Polish residents: the mandatory lump-sum tax of 8.5% (up to 100,000 PLN) or 12.5% (above that threshold), with no expense deductions. Non-residents must still register and file an annual tax return in Poland to report this income.