On the demand side, the major problem is data on investment. This was mentioned

above; rough estimates are used to calculate total investment, including housing

investment of individuals. Unfortunately, there is a very major problem in estimating

investment in individual houses. First, the estimation method does not take into account

changes in houses under construction during a calendar year. Secondly, and more

importantly, recent housing statistics suggests that the number of new dwellings completed

and the number of dwellings in progress are not logically correlated. One explanation is

that the average length of time used for construction is greater than before. A more

probable explanation, which is suggested by a number of experts, is that occupied and

completed individual houses are not formally registered as completed (oddane do uoytku)

(see Table A2.1). There are benefits for these investors in housing; they do not pay

property tax, nor a stamp fee for registration in the title register.

Table A2.1

Building Permits and Dwellings Under Construction

Year 

  1985

  1991

  1993

  1995

Building permits in  000

79.3

55.3

78.4

61.7

Apartments under construction:

      in December, in  000

275.8

334.4

403.0

496.6

Source:  CSO statistics, and: Gorczyca, M.: Stan I rozwoj mieszkalnictwa w Polsce, GUS, Warszawa 1997.

It is probably not credible that the average investment period for housing is as long

as suggested in Table A2.1.  This problem is also indirectly revealed by data provided by

Ministry of Finance on tax expenditure. There were over 900,000 taxpayers claiming land

acquisition and new construction expenditures in 1995. Data on housing tax deductions

are provided in Table A2.2.

Table A2.2

Tax Deductions for Housing Investment in 1995

Total Housing (renovation,

land acquisitions, new

Land Acquisition and New

Total

construction)

Construction

Taxpayers (in  000)

22.874

4.781

901

Claims (in  000 PLN)

16.752

7.207

4.711

Source:  Ministry of Finance

II 4