Costs of using your own apartment in a sole proprietorship

What expenses can be included?

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All costs related to using your apartment for business purposes can be included, such as: rent, repairs, furnishings, maintenance costs, mortgage interest, and utility bills (water, electricity, gas).

These expenses are included proportionally to the part of the apartment used for business. For example, if 20% of the apartment is allocated to the sole proprietorship, 20% of the expense can be treated as a business cost.

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Requirements:

• A written statement from the entrepreneur declaring that part of the apartment is used for business purposes (typically 20% to 50%).
• The address must be listed in the CEIDG register. It does not have to be the main place of business – it is enough for it to be listed as an additional place of business.

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As your accounting office, we should receive:

• The entrepreneur’s statement (as above).
• Confirmation that the address is listed in CEIDG.

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Potential issue – higher property tax

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For the apartment owner, running a sole proprietorship from home may trigger a higher property tax rate.

However, according to a Supreme Administrative Court ruling from August 11, 1992 (case no. SA/WR 650/92), “the higher tax rate applies only to the area used exclusively for business activity”. Additionally, the ruling of the Voivodeship Administrative Court from January 15, 2013 (case no. II FSK 933/11) states: “Areas of a building used for residential purposes cannot be considered as areas occupied for business activities”.

Therefore, for property tax purposes, to avoid the higher rate, it may be necessary to demonstrate that the designated area is not used exclusively for business.

If a room is separated and used exclusively for business purposes (e.g. a home office), the apartment owner may be required to pay the higher property tax rate.

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