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Taxpayers who have decided to install photovoltaic panels in their homes have a lot of reasons to be happy. The thermal modernization relief allows them to deduct from tax the costs they incurred for their purchase and installation. This means that it covers all construction materials, equipment and services.
According to the information provided by the Ministry of Investment and Development, the scope of work on photovoltaics for which relief can be obtained includes:
- purchase and installation of a solar collector,
- purchase and installation of a photovoltaic installation,
- performing an energy audit or thermographic analysis of the building,
- performing ornithological and chiropterological expertise.
You can also benefit from the relief if the installation is installed on the ground, garage or other facility located close to the house. However, it should be remembered that the photovoltaic installation must be used to power the house, not farm buildings.
Thermal modernization relief allows you to deduct only those expenses that are on the list published by the ministry. This means that, for example, the costs associated with replacing a roof covered with asbestos cannot be taken into account, even though they directly affect how the house maintains heat.
Work deadlines also need to be taken into account. You can deduct expenses from tax only if the installation of photovoltaics was completed within 3 years, i.e. from the end of the tax year in which the first expense was incurred. Additionally, please remember that only expenses incurred from January 1, 2019 are deductible.
If we use the relief, it is worth knowing that there are certain limitations. What exactly do they concern? We will not deduct from tax the part of expenses that were:
- returned to the taxpayer in any form,
- included in tax deductible costs,
- deducted from income pursuant to the Flat-Rate Income Tax Act,
- co-financed by the National or Provincial Fund for Environmental Protection and Water Management,
- taken into account by the taxpayer in connection with the use of tax reliefs within the meaning of the Tax Ordinance.
To put it simply, this means that we will not deduct the same expenses under different tax reliefs. It is also not possible to deduct from tax the funds that we received as part of funding from the state budget. However, there is an exception to this rule. Funds from the Clean Air program are not recognized as income, so we can combine them with the thermal modernization relief for a photovoltaic installation.
What will we need to be able to deduct photovoltaic expenses from tax? Each of them must be documented with an invoice. Importantly, these cannot be invoices issued by companies that are exempt from VAT. The thermal modernization relief can be used by persons to whom the invoice was issued.
The tax office considers the gross amount including VAT as an expense incurred. The sales date given on the invoice is also the date of incurring the expense related to the purchase of specific materials or services.
Who can benefit from the thermal modernization relief? When settling income tax, they are entitled to it:
- taxpayers who pay linear PIT at a rate of 19%,
- taxpayers who pay PIT according to the scale (rates 18% and 32%),
- flat-rate taxpayers (lump sum on recorded income).
One very important condition must also be met. We can only make the deduction if we are the owners or co-owners of a single-family house.
Pursuant to the Act, single-family houses include detached buildings or semi-detached, terraced or group buildings. They must serve to meet housing needs and constitute an independent whole structurally. They may contain no more than two residential premises or one residential premises and one commercial premises. However, the area of the latter cannot exceed 30% of the total area of the building.
Spouses are also entitled to benefit from thermal modernization relief. There are some limitations here too. The building in which the photovoltaic installation was installed must belong to common property. Then, each spouse can deduct the expenses incurred from tax. This will only be possible if the invoice is issued to both of them. If it contains the data of only one of them, only that person is entitled to the deduction.
If you are just building a house, unfortunately you cannot benefit from the relief. Why? The answer to this question is simple. According to the regulations, it is only available to home owners. And we officially become them only after the construction is completed.
As a relief, a maximum of PLN 53,000 can be deducted from the tax calculation basis. zloty. This limit applies to one taxpayer. In fact, this means that within this amount, any number of thermal modernization works can be performed in any number of buildings. If, for example, spouses start a project related to the installation of photovoltaic panels in a building they co-own, each of them has the right to deduct up to PLN 53,000. zloty.
When completing the annual PIT tax return, you should deduct the expenses you incurred during thermal modernization works in a given tax year. Only from this amount do we calculate tax. If our income is lower than the deduction amount, we can deduct the rest of the relief in subsequent years. However, this can be done for 6 consecutive years, counting from the tax year in which the first expense was incurred.
We can combine the subsidy received under the “Clean Air” program with a thermal modernization relief. This program was created to improve air quality in Poland. Funds from “Clean Air” are intended to cover part of the costs of thermal modernization of buildings. From 2019, the subsidy is not treated as taxpayer’s income.
If we received funding from the Clean Air program to install photovoltaic panels, we still have the right to deduct the relief from the remaining costs of the photovoltaic investment that were not covered by the subsidy.
However, we must remember that the total value of subsidies from the “Clean Air” program and the thermal modernization relief cannot exceed the value of the costs we incurred in connection with the thermal modernization.
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