Rent debt and tax debt. More effective tools for municipalities coming soon

Rents in municipal apartments depend on the location, square footage, and – at least in theory – on the tenant’s income. This type of apartment is particularly sought after and desirable due to the rent being much lower than market rates, so tenants can consider themselves lucky.

In practice, it turns out that half of the tenants of municipal apartments in Poland do not pay rent for various reasons, and cities and communes have a huge problem with collecting such debts. However, the situation is about to change.

Attractive rents in municipal apartments

Low rents for low-income earners seem like a fair solution. Today, the minimum municipal rent rate in Warsaw is approximately PLN 13/m2. For an apartment with an area of ​​40 m2, this amounts to approximately PLN 500 per month – regardless of the location. Meanwhile, for a similar apartment in the city center on the open market you have to pay up to PLN 5,000 a month. zloty.

Warsaw also offers a number of protection programs and forms of support for tenants of municipal premises in a difficult financial situation. It is possible to restructure the debt or defer payments in the event of rent arrears or sign an annex to the contract. This lenient policy is abused by tenants of public housing.

Rent debt will be treated as tax debt

At the end of 2022, there were 355,000 apartments with debt. according to the Central Statistical Office, and two years later – 322,000. Even though the debt is smaller, in practice it means billions. At the same time, the entire stock of municipal premises also decreased: from 779,000 to apartments at the end of 2022 to 756 thousand. in 2024.

– Rent debts in municipal premises have various causes and each of them requires a different approach. There are people who have a temporary problem and pay off their arrears after a few months. There are also those who fall into a debt spiral and their debt grows so much that they stop believing in the possibility of repaying it. Finally, there are people who consciously do not pay, even though they have income, because they know that eviction or effective debt collection are unlikely – explains prof. Adam Czerniak, deputy president of the National Real Estate Resource and head of the Department of Institutional and Political Economics of the Warsaw School of Economics.

And this needs to change. One of the proposals is to treat rent debt as tax debt, because obligations towards the tax office are enforced very efficiently in Poland – tax offices have access to income data and can seize bank accounts.