Investment relief in Warsaw

Warsaw's City Council has enacted a law which allows those investing in hotel, tourism and sports facilities in the capital in the next few years to avoid paying property tax. The city authorities hope the law, which came into force on January 1, 2008, will stimulate investors' interest in the city and help develop its sports and tourism infrastructure before the Euro 2012 soccer championships.

According to Alex Kloszewski, chairman of the Warsaw Destination Alliance, an organization promoting the city abroad, this decision by Warsaw's authorities has been welcomed by investors. "This is a very positive signal to all developers from the city authorities. I think that other Polish cities preparing for Euro 2012 will follow this policy," he said.

The newly enacted law applies to plots and buildings, or parts thereof, which will host tourism and sports-related facilities such as hotels, stadiums, swimming pools and tennis courts. The property-tax relief will last for a maximum of five years and the actual amount of the aid offered will depend on the costs involved in a particular investment. In order to qualify for the tax relief, the project in question needs to be completed by December 31, 2011.

What the city authorities hope the law will achieve, in particular, is a strengthening of the capital's hotel base. Currently, there are 63 hotels in Warsaw, offering over 18,000 beds. According to Warsaw officials, the relief could allow the latter figure to increase by 25-30 percent by 2012.

Warsaw is the first of Poland's Euro 2012 host cities to have introduced a tax relief measure. Local government representatives from Wrocław, Gdańsk, and Poznań, however, have already sent signals that their respective city councils could follow Warsaw's example soon.

Adam Zdrodowski