The fence tax is effective from 1 January 2025. Under the Local Taxes and Fees Act, a fence is now considered a structure and is subject to property tax. However, not everyone is obliged to implement the levy.
Until the end of 2024, there were regulations in place where the Local Taxes and Fees Act pointed to the definition of a structure in the Construction Law when it came to property tax. Article 1a(1)(2) of the Act spoke of a building object that is not a building or a small architecture object and indicated a construction device, within the meaning of the construction law, related to the building object, which ensures that the object can be used in accordance with its purpose. This is now changing. The Ministry of Finance has developed a new concept of a structure and a building and has indicated the taxable objects. Their list can be found in the appendix to the Act.
What is a building?
It is a ‘building erected as a result of construction works, together with installations ensuring that it can be used for its intended purpose, permanently connected to the ground, separated from the space by means of building partitions, and which has foundations and a roof, with the exclusion of a building in which loose materials, materials occurring in pieces, or materials in liquid or gaseous form are or can be stored, whose basic technical parameter determining its function is its capacity’.
What is a building?
1. a facility, which is not a building, listed in (new) Schedule 4 to the Act, together with the installations ensuring that it can be used for its intended purpose,
2. wind power plant, nuclear power plant and photovoltaic power plant, energy storage, boiler, industrial furnace, cableway, ski lift and ski jump – only as regards their construction parts,
3. building facility – a connection and installation facility, including for the treatment or collection of waste water and other technical equipment connected with a building or structure, ensuring their use for the purpose intended,
4. a technical unit and a free-standing industrial installation – only as far as their construction parts are concerned,
5. foundations for machinery and technical installations, as technically separate parts of objects, erected as a result of construction work.
A ‘fence’ was included in the list of taxable objects. However, owners of detached houses with gardens can rest assured. The tax is only to be paid by entrepreneurs. Article 2(1)(3) of the Local Taxes and Fees Act states that structures or parts thereof related to the conduct of business activitiesare subject to property tax.
Therefore, only such a fence, the existence of which is connected with conducting business activity, is subject to the tax. Entrepreneurs who have a fence for a hall, plot of land or shop may pay the tax. Importantly, there must be a connection between the structure (fence) and the business activity pursued.
source: PAP, Business Insider, Ministry of Development and Technology
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