The thermal-modernisation relief lets the owner of a single-family house deduct from income (and under ryczałt from revenue) spending on insulation, window replacement, a heat pump or photovoltaics — up to PLN 53,000 per person in total. It is available under the tax scale, the flat tax (podatek liniowy) and ryczałt (lump-sum tax on recorded revenue), so entrepreneurs also benefit from it. Since 2025, however, the list of eligible items is narrower than before, and mistakes in documents or deadlines mean a return of the relief with interest.
Who is entitled to the deduction
The relief is governed by Article 26h of the Personal Income Tax Act. There are three conditions:
- the taxpayer is an owner or co-owner of a single-family residential building (detached, semi-detached or terraced),
- the expense concerns a thermal-modernisation project in that building and falls within the list of materials, devices and services set by regulation,
- the entire project will be completed within 3 consecutive years, counted from the end of the year in which the first expense was incurred.
A flat in a block or tenement house does not give the right to the relief, nor does a house owned solely by parents or by a spouse under separation of marital property. The form of business is irrelevant: an employed person, an entrepreneur on the flat tax (podatek liniowy) of 19% and an entrepreneur on ryczałt can all use the relief. A person settling solely by the tax card cannot.
What the 2026 list covers
The catalogue is closed and follows from the regulation on the list of types of building materials, devices and services related to thermal-modernisation projects (consolidated text: Journal of Laws of 2025, item 1128). The items settled most often:
| Area | Materials and devices | Services |
|---|---|---|
| Building envelope | systems for insulating walls, roofs, foundations, balcony slabs | carrying out the insulation |
| Windows and doors | windows, roof windows, balcony and external doors, garage doors | installation and replacement of joinery |
| Heat source | a heat pump being part of the heating or hot-water installation, a boiler fired exclusively on biomass, a heat substation, a connection to a district heating network | installation, commissioning and adjustment, dismantling of an old solid-fuel stove |
| Renewable energy | photovoltaic cells, solar collectors, energy or heat storage, energy management system | installation together with the necessary infrastructure |
| Installations | materials for the heating and hot-water installation, mechanical ventilation with heat recovery | installation replacement, hydraulic balancing |
| Documentation | — | energy audit before the works, thermographic analysis, design, ornithological and chiropterological expert opinion |
What dropped off the list on 1 January 2025
The December 2024 amendment removed condensing gas and oil boilers and tanks for gas and oil. The connection to the gas network was also narrowed: only networks supplied with biogas or biomethane count. Anyone installing a new gas boiler in 2026 will not deduct it under this relief. At the same time, energy and heat storage, an energy management system and external doors were added.
A heat pump qualifies only if it is used for heating rooms or preparing hot water. An air conditioner with a heating function, including one with a built-in air-to-air heat pump, cannot be deducted: the Ministry of Finance expressly states that it is not an expense on a thermal-modernisation project.
Limit, timing and subsidies
- Limit of PLN 53,000 applies per taxpayer and to all their projects in total, also in several houses. Spouses who are co-owners have separate limits, so together up to PLN 106,000.
- Gross or net amount: the deduction covers the expense including VAT, unless the taxpayer has deducted that VAT in the VAT return — then only the net amount.
- Year of deduction: the date on which the expense is incurred is the day the invoice is issued. The relief is shown in the return for that year.
- Carry-forward of surplus: the part not covered by income is deducted in subsequent years, no longer than 6 years from the end of the year of the first expense.
- Subsidies: only the part not financed by funds from NFOŚiGW or regional funds (e.g. "Clean Air") or returned in another form can be deducted. If the refund arrives after the return is filed, the deducted amount is added back to income in the year of receipt.
Entrepreneur: business cost or relief
The same expense may be settled only once. The Act excludes the deduction of expenses charged to deductible costs, deducted from revenue under ryczałt, or taken into account in another relief. When the firm operates in the house and part of the installation (e.g. photovoltaics) goes into the fixed-asset register, the same invoice cannot also feed the thermal-modernisation relief.
The choice depends on the situation. The relief gives a one-off, fast deduction but requires ownership of the house and concerns private property. Settlement in costs usually spreads over the years through depreciation and requires showing a link with the business. Under ryczałt there are no costs, so the relief is practically the only route, and it is deducted from revenue before the ryczałt rate is applied — the rules of this form are described in the article on ryczałt (lump-sum tax on recorded revenue).
Calculation example
An entrepreneur on the flat tax, owner of a house, in 2026 installs a heat pump for PLN 48,000 and photovoltaics for PLN 22,000 (invoices gross, VAT not deducted). From a subsidy programme they receive PLN 25,000 for the heat pump.
- Total expenses: PLN 70,000.
- Minus the subsidy: 70,000 − 25,000 = PLN 45,000.
- The PLN 53,000 limit was not exceeded, so PLN 45,000 is to be deducted.
- At the 19% rate, tax drops by PLN 8,550.
- PLN 8,000 remains in the limit for future works, e.g. window replacement in 2027, provided the project is completed within the 3-year deadline.
The same amount under ryczałt at 12% would reduce the tax by PLN 5,400, and under the tax scale — depending on the bracket — by 12% or 32% of the deducted amount.
Documents and the annual return
- Collect invoices from active VAT payers who do not use the exemption. A receipt, a bill from a VAT-exempt firm, a contract or a bank transfer are not enough.
- Make sure the buyer on the invoice is the owner or co-owner of the house.
- Keep documents regarding the subsidy and the date of completion of the works.
- Show the relief on the PIT/O annex attached to PIT-36, PIT-36L, PIT-28 or PIT-37 for the year the expense was incurred.
- In subsequent years, continue to deduct the surplus and check whether the project was completed on time.
If the works are not completed within 3 years, all deducted amounts must be added back to income for the year in which the deadline expired. The same applies to a refund of expenses. In case of doubt about a specific device, an individual tax interpretation may be requested.
How Good Balance can help
We check whether the planned investment fits within the list, calculate whether the relief or booking the cost in the firm is more advantageous, and spread the deduction over subsequent years. Where the rules do not give a clear answer, we prepare an application for a tax interpretation. The ongoing settlement of the business is covered by our simplified accounting.