Many married couples face tax questions when one spouse's real estate is added to their joint property. This mainly concerns cases where one spouse bought the property before the marriage and later decided to extend the marital property community (wspólność majątkowa) to include it. The question then is whether this legal act creates inheritance and gift tax obligations for the other spouse. We provide bookkeeping for your business – also when the spouses' property is used in it.
The issue requires a detailed analysis of Polish family, civil and tax law to determine clearly the legal and tax consequences of such a step. The key is to understand the difference between an agreement extending marital property community and a gift agreement, because this distinction decides whether tax obligations arise.
Extending marital property community to include real estate that is the personal property of one spouse is not subject to inheritance and gift tax. It is a legal act separate from a gift agreement and governed by different provisions
Legal basis of the spouses' property regime
To understand how real estate is added to joint property, you first need to look at the rules governing the spouses' property regime. Under Article 31 § 1 of the Family and Guardianship Code (Kodeks rodzinny i opiekuńczy), when a marriage is concluded, marital property community arises between the spouses by operation of law, known as statutory community. This community covers all property acquired during its existence by both spouses or by one of them, forming the joint property.
All property not covered by statutory community remains the personal property of each spouse. This distinction is fundamental to understanding how ownership moves between the different types of marital property.
Statutory community arises automatically when the marriage is concluded and covers all property acquired while it lasts. Property acquired before the marriage remains the personal property of each spouse
Article 33 of the Family and Guardianship Code sets out in detail which assets belong to each spouse's personal property. This category includes, above all, property acquired before statutory community arose, that is, before the marriage. Personal property also includes items acquired by inheritance, legacy or gift, unless the testator or donor decided otherwise.
Personal property also includes property acquired in exchange for assets of personal property, unless a specific provision states otherwise. This rule ensures that personal property keeps its character even when it is transformed or exchanged for other assets.
Changing the property regime
Spouses are not limited to the statutory property community. Under Article 47 § 1 of the Family and Guardianship Code, they may conclude a marital property agreement in the form of a notarial deed, which allows them to extend or limit statutory community, or to establish separation of property or separation of property with equalisation of acquisitions.
A marital property agreement may be concluded both after and before the marriage, which gives couples considerable flexibility in shaping their property regime. This is particularly important when adding real estate to joint property, as it allows the legal status of specific assets to be regulated formally.
A marital property agreement must be made in the form of a notarial deed and may be concluded either before the marriage or during it. It allows the statutory property community to be modified to suit the spouses' needs
When spouses decide to move an asset from one spouse's personal property into joint property, that personal property must be disposed of accordingly. The process requires the proper legal form and a conscious act by both parties to make it legally effective.
Extending property community versus a gift
The key element of the tax analysis is understanding the differences between an agreement extending marital property community and a gift agreement. Although these two legal acts may appear to lead to similar economic results, they are governed by different provisions and have different legal and tax consequences.
A gift agreement, under Article 888 § 1 of the Civil Code (Kodeks cywilny), is an agreement by which the donor undertakes to make a free-of-charge performance for the benefit of the recipient at the expense of the donor's own assets. The essence of a gift is a transfer of value without anything in return, most often by moving an asset from the donor's property to the recipient's property.
A gift is a legal act intended to give someone a financial benefit without anything in return. The performance must enrich the recipient, and the donor's obligation must be intended as free of charge
For a legal act to be treated as a gift, it must meet certain conditions. First, the donor must declare the gift and the recipient must declare that they accept it. Second, the act must consist of a free-of-charge performance by the donor, at the donor's expense, for the benefit of the recipient.
Under Article 890 § 1 of the Civil Code, the donor's declaration should be made in the form of a notarial deed. However, the law provides an exception: a gift agreement concluded without this form becomes valid if the promised performance has been made. This exception does not help with real estate – an agreement obliging the transfer of ownership of real estate and an agreement transferring that ownership require the form of a notarial deed (Article 158 of the Civil Code).
Acts subject to tax
The basis for determining inheritance and gift tax obligations is Article 1 section 1 of the Inheritance and Gift Tax Act. This provision sets out a closed catalogue of legal acts subject to this tax, covering the acquisition by natural persons of ownership of things located in the Republic of Poland or of property rights exercised in Poland.
The catalogue covers the following titles of acquisition:
- Inheritance, ordinary legacy, further legacy, vindication legacy and testamentary instruction
- Gift and donor's instruction
- Acquisitive prescription of real estate or other rights
- Free-of-charge dissolution of co-ownership
- The reserved portion (zachowek) in certain cases
- Free-of-charge annuity, usufruct and easements
The catalogue of acts subject to inheritance and gift tax is closed and cannot be extended to other legal acts. If a given transfer of assets does not take the form of one of the acts listed in the Act, no tax obligation arises
An important feature of this catalogue is its closed nature, which means it cannot be extended to other legal acts. As a result, if a given transfer of assets does not take the form of one of the listed acts, in particular a gift, no inheritance and gift tax obligation arises.
Position of the tax authorities
The Director of KIS (National Tax Information), in an individual tax ruling of 12 July 2024 (no. 0111-KDIB2-2.4015.82.2024.1.KK), clearly stated that an agreement extending statutory marital property community is not subject to inheritance and gift tax. The reason for this position was that this type of agreement is not included in the closed catalogue of taxable acts set out in Article 1 of the Inheritance and Gift Tax Act.
This position confirms that extending marital property community to include real estate that is one spouse's personal property does not create tax obligations for the other spouse. The act reorganises property within the marriage rather than giving a financial benefit within the meaning of tax law.
The ruling of the Director of KIS of 12 July 2024 confirms that extending marital property community is not subject to inheritance and gift tax. Such an agreement is not included in the closed catalogue of taxable acts
Applying the rules in practice
To understand better how these rules work in practice, let us look at a specific example. Imagine that Ms Ewa bought a property with her own funds in 2020. In 2024 she married Mr Adam, and in 2025 the property was included in their joint property under an agreement extending property community.
In this situation, Mr Adam has no inheritance and gift tax obligation. Extending marital property community to include real estate that is Ms Ewa's personal property is not subject to this tax, which means Mr Adam has no tax obligations at all. For unmarried couples the tax consequences are assessed differently, for example when living with a partner.
| Stage | Date | Legal consequences | Tax effects |
|---|---|---|---|
| Purchase of the property by Ms Ewa | 2020 | Property in personal property | No tax obligations |
| Marriage | 2024 | Statutory community arises | No effect on the status of the property |
| Extension of property community | 2025 | Transfer to joint property | No inheritance and gift tax |
| Final status | After 2025 | Property in joint property | Tax neutrality |
Financing a property purchase with personal funds
The same tax rules also apply when a property bought for the spouses' joint property is financed with funds that are one spouse's personal property. This situation also does not create inheritance and gift tax obligations. Property can also belong to a business – what happens to it after the owner's death is described in our article on withdrawing a fixed asset from an enterprise in estate.
The Director of KIS, in an individual tax ruling of 10 January 2019 (no. 0111-KDIB4.4015.151.2018.2.MD), confirmed that using funds from the husband's personal property to buy a flat that is joint property was only an outlay on joint property from personal property and did not take the form of a gift agreement or any other act listed in Article 1 of the Inheritance and Gift Tax Act.
Financing the purchase of real estate for joint property with funds that are one spouse's personal property is not subject to inheritance and gift tax. It is only an outlay on joint property, not a gift
As a result, there is no need to report a gift to the tax office (urząd skarbowy), because the funds were not transferred to the other spouse's sole ownership. The funds went into joint property, which has a fundamentally different legal character from a gift.
Conditions for treating an act as a gift
For a legal act to be treated as a taxable gift, it must have all the features of this obligation set out in the Civil Code. The donor must declare the gift and the recipient must declare that they accept it.
In addition, the act must consist of a free-of-charge performance by the donor, at the donor's expense, for the benefit of the recipient. It is also essential that the performance enriches the recipient and that the donor's obligation is intended as free of charge.
When marital property community is extended to include real estate, these conditions are not met. There is no transfer of ownership from one person's property to another person's property, which is typical of a gift, but a reorganisation of property within an existing marriage.
- Extending marital property community is not a free-of-charge transfer of value
- One spouse is not enriched at the expense of the other
- There is no element of gratuitousness typical of a gift
- The act reorganises marital property rather than giving a benefit
Procedure for extending marital property community
Extending marital property community to include specific assets requires the proper legal procedure. Above all, the agreement must be drawn up in the form of a notarial deed, as required by Article 47 § 1 of the Family and Guardianship Code.
The agreement should state precisely which assets of personal property are to be moved into joint property and confirm that both spouses consciously want this. It is also important to document properly the value of the property being transferred and its legal status.
Extending marital property community requires an agreement in the form of a notarial deed. The agreement should state precisely which assets are transferred and confirm that both spouses agree
For real estate, it may also be necessary to make the relevant entries in the land and mortgage register (księga wieczysta) to reflect the change in the property's legal status. These formalities are intended to ensure full transparency and legal certainty of the transaction.
The procedure includes the following stages:
- Preparing the legal documents relating to the property
- Drafting the agreement extending property community
- Both spouses appearing before a notary
- Signing the notarial deed
- Making the necessary entries in the land and mortgage register
Differences in legal and tax effects
Understanding the differences between extending marital property community and a gift is key to assessing the tax effects correctly. Although these two legal acts may lead to similar economic results, they are fundamentally different in legal nature and have different tax consequences.
A gift leads to a definitive transfer of ownership of an asset from the donor's property to the recipient's property, which is a financial benefit covered by inheritance and gift tax (between spouses – with the exemption under Article 4a of the Act, if its conditions are met). Extending marital property community, by contrast, does not lead to such a transfer, but only to a reorganisation of property within the marriage.
A couple who married in 2023 decided to extend their property community to include a flat the wife had bought before the wedding. Instead of treating this as a gift, the spouses signed an agreement extending property community, which created no inheritance and gift tax obligations and at the same time achieved the intended legal status of the property. A gift between spouses would also have been exempt from this tax (Article 4a section 1 of the Act), and with an agreement in the form of a notarial deed it would not have required reporting to the tax office (Article 4a section 4 point 2).
The difference between a gift and extending marital property community is of fundamental tax importance. A gift falls within the catalogue of acts subject to inheritance and gift tax (between spouses, however, it benefits from the exemption under Article 4a of the Act), while extending property community remains outside the scope of this tax
Documentation and records
Although extending marital property community creates no tax obligations, it is advisable to keep proper documentation of the process. It may prove useful in the future, especially in the event of tax audits or other administrative proceedings.
Proper documentation should include a copy of the notarial deed extending property community, documents confirming the original purchase of the property by one spouse, and any documents relating to the valuation of the property at the time property community was extended.
It is also worth keeping documents confirming the source of the funds used for the original purchase, which may be important to confirm that the property really was one spouse's personal property before property community was extended.
