Entitlement to the thermal modernisation tax relief under the Polish tax system

Abstract

The provisions of Article 26h of the Personal Income Tax Act allow taxpayers to deduct expenses incurred for individual modernisation purposes, such as the purchase and installation of a photovoltaic system, in their tax returns. However, the actual ratio legis of the legislative solution under consideration is controversial, as the right to tax relief is linked exclusively to the modernisation of an existing, and therefore usable, single-family residential building. Therefore, the prospect of deducting the expenses in question is conditional on modifying the original energy source in order to achieve a specific energy optimisation. In practice, however, there is a problem with the interpretation of Article 26h of the above-mentioned Act in conjunction with Article 3(2a) of the Construction Law, concerning the formal rigour of commissioning a building for use. To be more specific, over time, both the administrative courts and the Ministry of Finance have liberally modified the original findings, leaning towards a position favourable to taxpayers. So, the fundamental question is whether the so-called thermal modernisation relief can be used only by owners of long-standing single-family residential buildings, or also by taxpayers who are just starting to build their own homes? Is it reasonable to modernise buildings that have recently been put into use? Does the wording of Article 26h of the above Act correspond to the actual intention of the legislator and the conditions prevailing in Poland?