8% VAT on Flat Finishing – When a Company Can Apply It
Author: Tacjana MasiukiewiczFinishing and fitting out~13 min read
A company can charge 8% VAT on flat finishing if it carries out construction works, renovation or modernisation in a residential unit, and the unit has up to 150 m² of usable area. Materials that the contractor buys and builds in as part of such a service fall under the same rate. The same tiles or floor panels bought yourself in a shop already carry 23%. Below we explain what exactly the lower rate covers, how it works for made-to-measure furniture and appliances, and how much you really gain on a quote of PLN 60 thousand net.
Key facts
- The 8% rate covers construction, renovation, modernisation, thermal upgrading and reconstruction of residential units up to 150 m² and single-family houses up to 300 m² (Art. 41 sec. 12–12b of the VAT Act in conjunction with Art. 146ef).
- Materials supplied and built in by the company as part of the service are taxed like the service, i.e. at 8%. Materials bought yourself carry the standard rate of 23%.
- Made-to-measure furniture can carry 8% only if it is permanently attached to the structure of the unit and is unusable after dismantling (general interpretation of the Minister of Finance of 27.05.2020). Freestanding furniture and household appliances carry 23%.
- For a unit larger than 150 m², the 8% rate applies only to the part of the price proportional to the limit, the rest carries 23% (Art. 41 sec. 12c).
- The rate is chosen, and answered for, by the contractor as a VAT payer. On a quote of PLN 60 thousand net, the difference between a comprehensive service and buying materials yourself is, in our example, PLN 3 750.
When can a company apply 8% VAT to flat finishing?
The basis is Art. 41 sec. 12 of the VAT Act (consolidated text Dz.U. 2025 item 775). The reduced rate applies to the supply, construction, renovation, modernisation, thermal upgrading, reconstruction or maintenance works concerning facilities classed as "construction under the social housing programme". The name is misleading, because it concerns ordinary flats and houses. Art. 41 sec. 12a includes here residential facilities and parts of them, excluding commercial units, and sec. 12b excludes residential units above 150 m² and single-family houses above 300 m².
Art. 41 sec. 2 itself speaks of 7%, but the transitional provision of Art. 146ef sec. 1 pt 2 raises this rate to 8%, and the standard rate to 23%. In September 2026 the rates are therefore 8% and 23%. The amendments to the Act from 2025–2026 did not change Art. 41 sec. 12–12c.
Two conditions must be met at once. First, the company carries out works in the unit, and does not merely sell goods. Second, the unit qualifies for the programme, i.e. it is a flat, not a commercial unit. Finishing a flat in developer standard (stan deweloperski – the unit handed over without interior finishes), that is plastering and skim coats, painting, floors, tiling, sanitary installation or interior doors, is usually treated by tax authorities as modernisation or construction of the unit. The order of these works is described in the guide finishing a developer-standard flat step by step.
It makes no difference whether you order as a private person or whether the unit is for rent. What counts is the nature of the unit and the type of works. It is also important who issues the invoice: a small firm using the subjective exemption (since 1 January 2026 the sales limit is PLN 240 000 a year, Art. 113 sec. 1) does not charge VAT at all, but buys materials itself with 23% VAT and usually factors this into the price.
Building materials – 8% or 23% VAT?
The provision lists services (construction, renovation, modernisation), not the sale of materials. That is why tiles, floor panels, paints or fittings bought in a shop or wholesaler carry the standard rate of 23%, regardless of which flat they go to. The shop cannot lower the rate, even if you show it the notarial deed.
It is different when the materials are supplied by the contractor. You then buy one supply – the finishing of the unit – and the materials are part of it and after installation become part of the flat. The tax base is the whole remuneration (Art. 29a sec. 1), so the invoice for labour with materials shows 8% on the whole amount. The company buys the materials with 23% VAT, but deducts that tax, so the difference is not a cost to it.
The condition: the materials must actually be built in as part of the service. If the company sells you goods on a separate invoice and the installation is done by someone else or by nobody, that is an ordinary supply of goods at 23%. That is why it is worth stating in the agreement with the contractor that its subject is the execution of finishing works using the contractor's materials. What else such an agreement should contain is covered in the text finishing crew – how to choose a firm and what to put in the agreement.
Example: a quote of PLN 60 thousand net – how much do you save on VAT?
PLN 60 thousand net is roughly the finishing of a 2-room flat of the median size from our Wroclaw offer (40.8 m², according to TM Invest offer data as at 27.09.2026) at about PLN 1 470/m² net. Of this, PLN 25 thousand is materials and PLN 35 thousand is labour. We compare two variants at the same net prices.
| Variant | Net | Rate | VAT | Gross |
|---|---|---|---|---|
| A. Comprehensive service by a company (labour + contractor's materials) | PLN 60 000 | 8% | PLN 4 800 | PLN 64 800 |
| B1. Materials bought yourself | PLN 25 000 | 23% | PLN 5 750 | PLN 30 750 |
| B2. The company's labour only | PLN 35 000 | 8% | PLN 2 800 | PLN 37 800 |
| Variant B total | PLN 60 000 | – | PLN 8 550 | PLN 68 550 |
| Difference B – A | – | – | PLN 3 750 | PLN 3 750 |
The saving is 15% of the net value of the materials (23% – 8%), here PLN 3 750. In practice the result may differ. The contractor often adds a margin on materials or has wholesale discounts, and you may come across a promotion at a DIY store. So compare the gross prices of both variants, not just the rates. How to break finishing down into items and build a budget is shown in the article how much does flat finishing cost.
Only just looking for a flat and do not want to organise crews yourself? We will select a flat from a developer for you – also a ready one or one with a finishing package – and compare the costs of several developments. For the buyer we work in most cases with no commission, because the developer usually pays our fee.
8% or 23% VAT – table of finishing items
| Item | Rate | Basis |
|---|---|---|
| Labour: skim coats, painting, floors, tiling, sanitary installation, doors – residential unit up to 150 m² | 8% | Art. 41 sec. 12 pt 1, sec. 12a–12b |
| Materials supplied and built in by the contractor as part of this service | 8% | part of a comprehensive supply, Art. 29a sec. 1 |
| Materials bought yourself in a shop or wholesaler | 23% | Art. 41 sec. 1 in conjunction with Art. 146ef – supply of goods |
| Made-to-measure furniture fitting permanently attached to walls, floor or ceiling | 8% | general interpretation of the Minister of Finance no. PT3.8101.2.2020 |
| Freestanding furniture and fittings that can be moved elsewhere | 23% | general interpretation of the Minister of Finance no. PT3.8101.2.2020 |
| Household appliances (fridge, oven, dishwasher, washing machine), also built-in | 23% | KIS interpretations, e.g. of 18.10.2023 |
| Residential unit above 150 m² | 8% and 23% proportionally | Art. 41 sec. 12c |
| Commercial unit (e.g. office, services) | 23% | Art. 41 sec. 12a – exclusion of commercial units |
8% VAT on made-to-measure furniture and appliances
The rules for furniture are set by general interpretation of the Minister of Finance no. PT3.8101.2.2020 of 27 May 2020 (Dz. Urz. Min. Fin. 2020 item 69). It changed the earlier, stricter position from 2014. According to it, the execution of a furniture fitting is a modernisation of the unit at 8% VAT where, cumulatively: the furniture is made to measure for a specific unit, makes substantial use of walls, floor or ceiling as its own elements, and after dismantling is unusable as furniture.
The Ministry gives the example of a built-in wardrobe made of boards cut to size, fixed with plugs and screws, in which the back and side walls of the recess serve as the walls of the wardrobe. Such a wardrobe may carry 8%. If, however, the furniture can be dismantled and reassembled elsewhere, e.g. a wardrobe with a full carcass or kitchen modules placed against a wall, it is a supply of furniture at 23%. For a made-to-measure kitchen, therefore, the construction decides, not the name in the offer.
Appliances are a separate item of goods. In an individual interpretation of 18 October 2023 (ref. 0113-KDIPT1-2.4012.758.2018.10.JS), issued after a Supreme Administrative Court (NSA) judgment, the Director of the KIS held that fitted furniture can share the building's rate, but the part of the price attributable to appliances must be separated and taxed at the rate appropriate for those goods. A built-in fridge or oven therefore usually carries 23%, even when the same company installs it.
A flat above 150 m² – how is VAT on finishing calculated?
For a unit larger than 150 m² the company does not lose the whole preference. Art. 41 sec. 12c requires 8% to be applied to the part of the tax base corresponding to the share of 150 m² in the total usable area, and 23% to the rest. There are few such units in our offer: according to TM Invest offer data as at 27.09.2026, it is 26 of 4351 available units, i.e. about 0.6%.
Example: an apartment of 191.19 m² in the Sudea development in Wroclaw's Krzyki district. The limit's share is 150 / 191.19 = 78.46%. With a finishing quote of PLN 400 000 net, PLN 313 824 goes at 8% (VAT PLN 25 106), and PLN 86 176 at 23% (VAT PLN 19 820). Total VAT is PLN 44 926, i.e. PLN 12 926 more than with 8% on the whole. The same proportion applies to VAT in the price of a unit from a developer, which we describe in the article VAT on a flat from a developer.
A separate category is maintenance works, i.e. works that keep building elements technically functional, other than renovation (Art. 41 sec. 12d). In residential units they carry 8% even above the 150 m² limit (sec. 12 pt 2), but only where the value of materials does not exceed 50% of the tax base (sec. 12e). The first finishing of a unit in developer standard (stan deweloperski) is usually not maintenance.
A finishing package from the developer and VAT
Where finishing is part of the price of the unit, the developer delivers a finished flat and applies the same rate to the whole as to the flat: 8% for a unit up to 150 m². The exception is elements that the authorities treat as separate goods, above all appliances and furniture that can be moved. Where the package is carried out by a separate firm under a separate agreement, the rules described above for a finishing service apply. We discuss the pros and cons of such packages in the article finishing package from a developer – is it worth it.
Who is responsible for the VAT rate and how to check it?
The contractor is responsible for the correct rate, because they are the taxpayer and account for VAT with the tax office. If they apply 8% without basis, the tax arrears arise on their side. The Act does not require any special declaration from the client, but the company may ask for details of the unit (address, usable area, type of unit), because it must be able to show that the works concern a flat of up to 150 m².
For unusual items the contractor may apply for a binding rate information (WIS, Art. 42a of the VAT Act) or an individual interpretation. Interpretations already issued can be searched in the Ministry of Finance's Eureka database. What you should check above all is whether in the offer and on the invoice each item has a rate assigned and whether appliances and freestanding furniture are not hidden in labour at 8%.
Frequently asked questions
Does a flat renovation always carry 8% VAT?
Not always. A service of renovation, modernisation or reconstruction of a residential unit of up to 150 m² carries 8%. The 23% rate applies to commercial units, the area exceeding 150 m², and goods sold without a service, e.g. materials, freestanding furniture and appliances.
Can I buy building materials with 8% VAT?
Yourself in a shop – no. The sale of materials is a supply of goods at 23%. Materials can carry 8% only if the contractor buys and builds them in as part of a service of finishing or renovating the flat.
What VAT applies to made-to-measure furniture?
8% if the fitting is made to measure for a specific unit, uses walls, floor or ceiling as its own elements and is unusable after dismantling. Furniture that can be taken apart and reassembled elsewhere carries 23%. This follows from the general interpretation of the Minister of Finance of 27 May 2020.
Does a private person have to sign anything to get 8% VAT?
The VAT Act does not provide for a mandatory declaration. The contractor may, however, ask for the address and area of the unit, because it is responsible for the rate applied and must be able to justify it in an inspection.
Is a contractor without VAT cheaper?
Not necessarily. A firm with the subjective exemption does not add VAT to the invoice, but buys materials with 23% VAT and cannot deduct it, so it usually factors it into the price. Compare the final gross amounts from the offers, not whether the invoice shows VAT.
Summary
8% VAT on flat finishing is the rate for a company's service in a residential unit of up to 150 m², together with the materials that the contractor builds in. Materials bought yourself, freestanding furniture and appliances carry 23%, and permanent made-to-measure fittings – 8% if they meet the conditions of the Ministry of Finance's general interpretation. On a quote of PLN 60 thousand net, choosing a comprehensive service gives, in our example, PLN 3 750 less VAT, but ultimately what counts is the gross price of the whole offer.
Planning a purchase and already thinking about finishing? We will help you choose a flat from a developer – in developer standard (stan deweloperski), ready, or with a finishing package – and calculate the total budget. We have been on the market since 2016, and for the buyer we act in most cases with no commission, because the developer usually pays our fee. You will find current offers in the catalogue of developments.
Legal position as at September 2026. The calculations are indicative and do not constitute tax advice. The VAT rate for a specific service is determined by the contractor; in unusual cases it may apply for a WIS or an individual interpretation.
Sources
- Act on Tax on Goods and Services – consolidated text Dz.U. 2025 item 775 (Art. 2 pt 12, Art. 29a sec. 1, Art. 41 sec. 1, 2 and 12–12e, Art. 42a, Art. 146ef).
- Act of 24 June 2025 amending the Act on Tax on Goods and Services – Dz.U. 2025 item 896 (subjective exemption limit PLN 240 000 from 1.01.2026).
- General interpretation of the Minister of Finance no. PT3.8101.2.2020 of 27 May 2020 – Dz. Urz. Min. Fin. 2020 item 69 (permanent furniture fittings).
- Individual interpretations of the Director of the KIS (Eureka) – of 18.10.2023, ref. 0113-KDIPT1-2.4012.758.2018.10.JS (appliances and fitted furniture), and of 11.09.2019, ref. 0111-KDIB3-1.4012.339.2019.2.WN (turnkey flat finishing).
- Flat prices: TM Invest investment catalogue, as at 27.09.2026.
