Rental of Spouses' Shared Property and VAT: How to Calculate the Limit?

Often, spouses who co-own a property decide to rent it out. In such situations, questions arise about taxation, especially regarding VAT, when one of the spouses runs a business. In the latest interpretation, the Director of the National Tax Information (KIS) resolved a similar issue.

Joint Property and Taxation Issues

A taxpayer running a sole proprietorship, taxed with a lump sum and benefiting from VAT exemption, asked the authority about accounting for private rental income. In PIT-28, he reports both business and rental income together because his wife declared that he would account for all the income. The taxpayer noted that rental agreements are signed solely by his wife, acting in her own name. The tenants are individuals, and the rental is exclusively for residential purposes. The rent is deposited into the couple's joint account. The taxpayer does not participate in these agreements or in managing the rental. He asked whether the income earned by his wife should be considered when determining the sales value for the purpose of VAT exemption. In his opinion, it should not, as his wife is the VAT taxpayer, signing agreements in her own name.

Wife's Rental Does Not Count Towards Husband's VAT Exemption Limit

The Director of KIS agreed with the taxpayer. Marital joint property allows each spouse to independently manage the joint assets. According to civil code regulations, the VAT taxpayer is the spouse who performed the taxable activity. If the rental is conducted in one's own name and on behalf of one spouse, then that spouse is the VAT taxpayer. In the presented case, since the wife signs the rental agreements and manages the property, she is the VAT taxpayer. Consequently, the rent from the rental does not affect the applicant's sales value in his business. Individual interpretation by the Director of the National Tax Information from June 10, 2026, no. 0111-KDIB3-1.4012.348.2026.2.IK

Practical Aspects of Rental Accounting in Marriage

Managing joint assets, especially when it involves renting property, can raise various questions and doubts. A key aspect is determining which spouse is responsible for specific actions related to the rental. In practice, this means that spouses must clearly define who will sign rental agreements and how responsibilities related to property management will be divided. One practical solution is to draft an agreement between the spouses that specifies how rental income will be managed and how costs related to property maintenance will be accounted for. Such an agreement can be particularly useful in case of potential misunderstandings or tax audits.

Impact of Joint Property on Taxes

Joint property, which automatically arises upon marriage, includes all assets acquired during the marriage. This means that income from rental will be part of the joint property unless the spouses decide on separate property. In tax terms, this means that each spouse could theoretically be responsible for accounting for this income unless they explicitly determine that only one of them will do so. For example, if the wife is responsible for managing the property and she signs the rental agreements, she will have to account for the income in her tax return. However, if the spouses decide on joint accounting, they must remember that in such a case, they may lose the ability to benefit from the VAT exemption if they exceed the applicable limit.

What Are the VAT Exemption Limits in Poland?

The VAT exemption in Poland is granted to entrepreneurs whose annual turnover does not exceed a specified limit. For 2023, this limit is 200,000 PLN. This means that if rental income, combined with other business income, exceeds this amount, the entrepreneur will have to register as a VAT taxpayer and account for this tax. As with other forms of activity, spouses must be aware that rental income can affect their total turnover, which in turn may necessitate VAT registration. Therefore, it is important to continuously monitor income and, if necessary, consult a tax advisor.

Practical Tips for Spouses Renting Properties

1. **Formalizing the Agreement**: Drafting a written agreement between spouses that specifies who manages the rental and how income and costs will be divided can prevent future conflicts. 2. **Monitoring Income**: Regularly tracking rental and other income will help avoid exceeding the VAT exemption limit. 3. **Tax Consultations**: It is advisable to use the services of a tax advisor, especially when rental income is significant and may affect the need for VAT registration. 4. **Considering Separate Property**: In some cases, introducing separate property may be beneficial, allowing for better financial and tax management. 5. **Preparing for Audits**: Spouses should be prepared for potential tax audits, which means having complete documentation of rental agreements and tax settlements. By following these tips, spouses can more easily manage rental income while minimizing tax and legal risks.