Changes in the thermomodernisation tax relief – what has changed since January 2025?

As of January 1, 2025, amendments to the thermomodernisation tax relief have come into effect, which may impact the tax settlements of individuals investing in energy-efficient building improvements.

The new regulations eliminate the possibility of deducting certain expenses, such as those related to gas or oil boilers, while expanding the relief to cover new categories of expenditure previously excluded. For individuals planning investments in eco-friendly heating solutions, these changes could be significant. But what exactly has been modified, and which investments now qualify for tax relief?

Answers to these questions can be found in the amended Regulation of the Minister of Investment and Development of December 21, 2018, which outlines the types of construction materials, devices, and services eligible under thermomodernisation projects. The updated provisions took effect at the beginning of this year.

Boilers under scrutiny of new regulations

Starting in 2025, taxpayers can no longer deduct expenses related to the purchase and installation of gas or oil boilers and their associated infrastructure, including control systems, protective fittings, and air supply and exhaust systems. Additionally, gas and oil storage tanks have been removed from the list of deductible expenses.

At the same time, the legislation specifies that the deductions for the purchase and installation of connections to district heating or gas networks will only be possible if these networks use biogas or biomethane as an energy source. This change aligns with efforts to promote environmentally friendly energy solutions.

These changes stem from the implementation of the European Parliament and Council Directive (EU) 2024/1275 of April 24, 2024, concerning the energy performance of buildings (EPBD Directive). According to its provisions, from 2025, Member States will no longer provide financial incentives for installing individual boilers powered by fossil fuels.

New deduction rules for heat pumps

Taxpayers planning to deduct expenses related to the purchase and installation of heat pumps must now meet an additional condition: the heat pump, along with the infrastructure necessary for its operation, must be part of a system used for heating rooms or preparing hot water for domestic use.

As outlined in the justification for the draft regulation, this clarification aims to eliminate misinterpretations regarding the documentation submitted by taxpayers concerning devices that did not meet the definition of heat pumps. The update is intended to direct tax relief toward more efficient and environmentally sustainable solutions.

Energy storage and energy management systems – new opportunities

Energy and heat storage systems, as well as energy management systems, have been added to the list of deductible expenses. As of 2025, taxpayers can deduct costs related to the purchase and installation of these storage systems, their necessary infrastructure, and energy management systems.

According to the Ministry of Development and Technology, one of the key challenges in the widespread adoption of energy storage technologies has been the lack of financial incentives. By including energy storage investments in thermomodernisation tax relief, the government aims to encourage broader implementation of these solutions.

What about building insulation?

The new regulations introduce the possibility of deducting expenses for roof insulation. Additionally, tax relief now covers the purchase and installation of external doors, which could be an appealing option for those undertaking large-scale thermomodernisation projects.

The amendments aim to clarify ambiguities and simplify the application of regulations for both taxpayers and tax authorities. The revised regulation also refines specific terminology that previously caused confusion. For instance, the term “equipment” has been replaced with “infrastructure necessary for operation”. The deduction also includes the purchase and installation of a heat exchange unit, along with a temperature controller, and, as clarified, an automatic weather regulation system.

Who can benefit from Thermomodernisation tax relief?

Owners and co-owners of single-family residential buildings are eligible to deduct expenses related to thermomodernisation projects from their taxable income under personal income tax. The deduction applies to construction materials, devices, and services specified in the relevant regulation.

Both non-business individuals and entrepreneurs can benefit from the relief. This applies to taxpayers subject to progressive tax rates, flat-rate tax, and lump-sum taxation on recorded revenue.

The deduction limit is PLN 53,000 for all thermomodernisation projects, and for married couples, it is PLN 106,000. The projects must be completed within three consecutive years from the end of the tax year in which the first expense was incurred. Additionally, taxpayers must provide VAT invoices as proof of expenses.

Constitutional concerns

The legislative changes have raised concerns regarding their compliance with the Constitution, particularly in relation to the principles of democratic rule of law. The amended regulation detailing deductible expenses was published in the Journal of Laws on December 27, 2024, and came into effect on January 1, 2025.

It is important to note that some of these new provisions are disadvantageous for taxpayers – for instance, the removal of deductions for gas and oil boilers. According to rulings by the Constitutional Tribunal, the minimum “vacatio legis” (waiting period before a law takes effect) for changes in income tax laws that negatively affect taxpayers should be at least one month. This means there should be sufficient time between the announcement of a new legal act and its enforcement, allowing citizens to adapt to the new regulations.

Failure to meet this requirement may be seen as a violation of proper legislative procedures and could undermine the constitutionality of the introduced changes.

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Legal basis:

• Article 26h of the Act of July 26, 1991, on Personal Income Tax (Journal of Laws 2025, item 163)
• Regulation of the Minister of Investment and Development of December 21, 2018, on the list of construction materials, devices, and services related to thermomodernisation projects (Journal of Laws 2023, item 273, as amended).