The Polish Prime Minister announced yesterday that his government is starting work on tax abolition for all emigrants living and working in the UK and Ireland between 2002 and 2006. This is likely to lead to a lot of Poles returning home, but it won't be massive exodus in my view.

The tax abolition was one of his election promises and it now looks it will finally materialise and could even come into effect as soon as this year!

The current situation is that emigrants returning permanently to Poland have to submit tax declarations for all the years up to 2006 and then pay the difference in tax between what they have paid in the UK and what they would have paid at home.

For many young Poles the difference is often the equivalent of a year’s salary! That has been stopping many emigrants from returning home.

The tax abolition means the emigrants who didn’t declare UK/ Irish income in Poland will not be required to do it and no penalties apply. Those who paid the difference would be allowed to claim it back.

The tax abolition will be encouraging factor for many Poles to go back home and invest their money. In many cases that will translate into investing in properties, as owning a home is a goal for every Pole.

It looks like the second wave of property price growth could occur quicker that we thought, especially if the tax abolition law is introduced this year, as the government promises.

Any thoughts?

Anna