The resolutions on real estate tax exemptions for newly built office and production buildings, which were adopted by the Kielce City Council in February 2022, are an expression of the open approach of the city authorities to applying investors as well as local entrepreneurs willing to invest in Kielce. Both resolutions are in force until December 31, 2023. In January 2023, the City Council of Kielce adopted another resolution allowing exemption from property tax for new enterprises creating jobs.
Despite the difficult economic and geopolitical situation caused first by the Covid-19 pandemic and then Russia's aggression against Ukraine, the number of inquiries from potential investors to the Investor Assistance Center at the Kielce City Hall remains unchanged. Manufacturing companies and logistics service providers ask about available areas and halls. Available office space, sought after by companies representing the business process outsourcing sector, is very popular. When investors ask about the availability of land, production halls or offices, they also express interest in investment incentives in a functioning city.
New investors and local entrepreneurs are the driving force behind the development of each city, and fiscal incentives are of great importance to create favorable conditions for investing and running a business. Therefore, in order to meet the expectations of companies, the City Council of Kielce in recent years adopted two resolutions exempting entrepreneurs from property tax. Both local and external companies can take advantage of these exemptions.
The city of Kielce, having the potential for the development of the office sector: human capital, Kielce's location on the S7 expressway between two strong centers, i.e. Warsaw and Krakow, low rental rates, focused on the development and support of the modern business services sector. One of the barriers to the development of the outsourcing industry in the city is the shortage of modern office space, guaranteeing the appropriate quality of work and services provided. In order to encourage investors to build modern office space, the City Council adopted a resolution on real estate tax exemption for initial investment in newly built office buildings.
The adopted resolution enables entrepreneurs implementing initial investments to obtain real estate tax exemption for a maximum period of 3 years.
The conducted analysis showed that in a city of the size of Kielce and a population of approx. 200,000 inhabitants, the optimal solution is to use the mixed-use model in newly built buildings, and the adequate area of the building will be 3,000 m2. These parameters were introduced in the resolution, which provides for an exemption from property tax for newly built buildings with a usable area of at least 3,000 m2, related to running a business, in which at least 80% of the usable area is high-standard office space.
An important argument for locating production companies in Kielce is the resolution on the exemption from real estate tax of newly built buildings or their parts and structures related to conducting business activity in the field of production activity.
The resolution introduced an exemption from real estate tax for newly constructed buildings or their parts and structures related to production activities. The adoption of the resolution enables entrepreneurs implementing initial investments to obtain real estate tax exemption for a maximum period of 3 years. Importantly, it must be an initial investment related to the establishment of a new production facility.
Continuing the tax policy adopted by the City of Kielce, aimed at encouraging companies already operating on the Kielce market to make reinvestments here, as well as attracting investors operating in the country and abroad to locate their branches in Kielce, the local government proposed another tool to support entrepreneurs.
In January 2023, a resolution on real estate tax exemptions constituting regional investment aid was adopted. The resolution exempts from real estate tax buildings or their parts, as well as buildings or parts thereof related to running a business, as a result of which new jobs have been created. The exemption is valid for a period not longer than 3 years.
Due to inflation, the availability of materials and rising costs, the investment process is burdened with greater risk than before, and both the process of return on investment in both office spaces and production halls is stretched over time. Hence, the resolutions adopted by the Kielce local government exempting from real estate tax are to be a clear investment incentive addressed to companies building office space, production companies and entrepreneurs setting up new plants or diversifying production by introducing products previously not produced in the plant. According to the reports of local companies, the layoffs are perceived as an important element of support, helping to offset investment costs and reduce the risks associated with longer commercialization of space or the launch of production processes.
It should be mentioned that in addition to the tax exemptions offered, the City of Kielce, as part of supporting the investment process, also offers the lowest real estate tax rates among voivodship cities in Poland.
The charts show the tax rates of several voivodship cities.
Despite the difficult economic and geopolitical situation caused first by the Covid-19 pandemic and then Russia's aggression against Ukraine, the number of inquiries from potential investors to the Investor Assistance Center at the Kielce City Hall remains unchanged. Manufacturing companies and logistics service providers ask about available areas and halls. Available office space, sought after by companies representing the business process outsourcing sector, is very popular. When investors ask about the availability of land, production halls or offices, they also express interest in investment incentives in a functioning city.
New investors and local entrepreneurs are the driving force behind the development of each city, and fiscal incentives are of great importance to create favorable conditions for investing and running a business. Therefore, in order to meet the expectations of companies, the City Council of Kielce in recent years adopted two resolutions exempting entrepreneurs from property tax. Both local and external companies can take advantage of these exemptions.
The city of Kielce, having the potential for the development of the office sector: human capital, Kielce's location on the S7 expressway between two strong centers, i.e. Warsaw and Krakow, low rental rates, focused on the development and support of the modern business services sector. One of the barriers to the development of the outsourcing industry in the city is the shortage of modern office space, guaranteeing the appropriate quality of work and services provided. In order to encourage investors to build modern office space, the City Council adopted a resolution on real estate tax exemption for initial investment in newly built office buildings.
The adopted resolution enables entrepreneurs implementing initial investments to obtain real estate tax exemption for a maximum period of 3 years.
The conducted analysis showed that in a city of the size of Kielce and a population of approx. 200,000 inhabitants, the optimal solution is to use the mixed-use model in newly built buildings, and the adequate area of the building will be 3,000 m2. These parameters were introduced in the resolution, which provides for an exemption from property tax for newly built buildings with a usable area of at least 3,000 m2, related to running a business, in which at least 80% of the usable area is high-standard office space.
An important argument for locating production companies in Kielce is the resolution on the exemption from real estate tax of newly built buildings or their parts and structures related to conducting business activity in the field of production activity.
The resolution introduced an exemption from real estate tax for newly constructed buildings or their parts and structures related to production activities. The adoption of the resolution enables entrepreneurs implementing initial investments to obtain real estate tax exemption for a maximum period of 3 years. Importantly, it must be an initial investment related to the establishment of a new production facility.
Continuing the tax policy adopted by the City of Kielce, aimed at encouraging companies already operating on the Kielce market to make reinvestments here, as well as attracting investors operating in the country and abroad to locate their branches in Kielce, the local government proposed another tool to support entrepreneurs.
In January 2023, a resolution on real estate tax exemptions constituting regional investment aid was adopted. The resolution exempts from real estate tax buildings or their parts, as well as buildings or parts thereof related to running a business, as a result of which new jobs have been created. The exemption is valid for a period not longer than 3 years.
Due to inflation, the availability of materials and rising costs, the investment process is burdened with greater risk than before, and both the process of return on investment in both office spaces and production halls is stretched over time. Hence, the resolutions adopted by the Kielce local government exempting from real estate tax are to be a clear investment incentive addressed to companies building office space, production companies and entrepreneurs setting up new plants or diversifying production by introducing products previously not produced in the plant. According to the reports of local companies, the layoffs are perceived as an important element of support, helping to offset investment costs and reduce the risks associated with longer commercialization of space or the launch of production processes.
It should be mentioned that in addition to the tax exemptions offered, the City of Kielce, as part of supporting the investment process, also offers the lowest real estate tax rates among voivodship cities in Poland.
The charts show the tax rates of several voivodship cities.