Selling property abroad

More and more Poles are deciding to buy and sell property abroad. This applies to houses, residences in exotic countries and smaller properties near the borders of our country. Are you curious what these transactions involve and whether they differ much from domestic ones? Get information on selling residential premises located outside Poland.

The Income Tax Act

Selling a flat generates income, which in turn entails paying income tax on the disposal of property for consideration. When selling a flat or house abroad, you need to take steps to avoid double taxation, which applies to profits obtained from the transfer of ownership of assets.

If the premises were disposed of less than five years after purchase, the income is subject to tax. Profits from the transfer of assets should be taxed according to the rules of the country in whose territory the property is located. To avoid paying tax twice, agreements on avoiding such situations were created. With many countries, Poland has signed a double tax treaty (UPO), as well as agreements on exemption with progression and on proportional deduction. These rules mean that income earned outside the country is exempt from tax in Poland, or that tax paid in another country is deducted from Polish tax.

HOW AND WHERE TO LOOK FOR PROPERTY?

Exemption from paying tax

Clients often ask us whether tax can be avoided when selling property abroad. It can. How? The income from the transaction must be spent on your own housing needs. This rule can be applied to transactions carried out in countries belonging to the European Union, the European Economic Area, and also Switzerland. The income can therefore be spent on buying another property or renovating it.

Selling property abroad and the PIT return

If we earn income from selling property abroad, we pay tax in accordance with the provisions of the bilateral agreement on avoiding double taxation mentioned earlier. We are not obliged to file a PIT-39 return and settle the income in Poland where the income was obtained solely from the disposal of property located in a country with which the exemption with progression method applies.

Income from selling a flat abroad is reported in PIT-39 when we sold it in a country in which the proportional tax calculation method applies. You can file the PIT-39 return using an online program and settle it online. You can also choose the traditional route, that is, go to the tax office or send the documents by post.

Do you have other questions about selling flats abroad? Do you need information about buying or selling residential premises? Contact the staff of the REMAX Gold agency.