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Mike Farabow
Mike Farabow

Buying Property In Poland

Bank Millennium is just one example of a local bank that could be an option if your salary is Zloty denominated. Or, in addition to the aforementioned Pekao and Alior banks, you could use an international lender such as Santander to help you buy a property in Poland.

buying property in poland


While getting a mortgage to buy a property in Poland is far from impossible, it is tricky to do on your own. Your knowledge of both the local and international mortgage lender market may not be in-depth enough to access the best available product and interest rate for you. That can adversely impact how much you can borrow if you do not secure a loan where you have minimised your interest repayments.

The real estate market in Poland has been of great interest toinvestors and individuals for years. Real estate investments inPoland provide good yields compared to otherEuropean countries. In addition, many people consider Poland to bea good place to live, especially given itsattractive location in central Europe, growing economy, stablelabor market and lower cost of living than in other western EUcountries. On the other hand, buying a property in Polandinvolves many formalities, requires knowledge of manylegal regulations and the local market. This results with anincreased demand for real estate legal services.

Purchase of real estate in Poland requires theconclusion of a contract in the form of a notarialdeed before a Polish notary public. Upon conclusion of thesales contract, the buyer acquires ownership of the property.

The transfer of ownership of real estate cannot be madeon condition or with a reservation of time. This meansthat the ownership of the real estate is transferred to the buyerunconditionally. The parties also cannot set a time limit afterwhich the ownership of the property reverts back to the seller.

Disclosure of ownership of real estate in theregisters is not a condition for the effectiveness of thepurchase of real estate. The entry in the land register isdeclaratory in nature, i.e. it is only an official confirmationthat the buyer has become the owner of the property.

The conclusion of the contract shall be preceded by anexamination of the legal status of the property, in particular theseller's title to the property, the existence of third-partyclaims and rights, statutory restrictions for property sale,planning regulations, conservation protection, compliance withconstruction laws. In the case of more valuable or complextransactions, especially those involving commercial real estate,buyers conduct detailed real estate due diligence combined also with atechnical and commercial examination of the investment.

The subject of negotiations may be not only financial issues(price, timing and method of payment), but also issues of theparties' liability for risks identified during the course ofthe property examination or that may become apparent in the future(e.g. possible technical defects in the building, potentialdisputes with owners of neighboring properties or tenants of theproperty being sold).

The parties of the property sale contract, in particular abuyer, have a lot of obligations (administrative, tax, contractual)that should be fulfilled after execution of the contract, includinginter alia:

Civil law transaction tax on the sale of real estate is2% of the market value of the property. The PCC ischarged to the buyer. The duty to collect and paythe tax is borne by the notary drawing up the sales contract. Inpractice, the buyer must pay the PCC tax to the bankaccount of the notary's office even before signing thesales contract.

Real estate in Poland is subject to real estate tax to themunicipality of the place where the property is located. Thepurchaser of real estate is required to independently report theacquisition of real estate to the relevant office for real estatetax purposes on a special form. The notification must be submittedwithin 14 days from the date of real estateacquisition.

  • Since Poland joined the European Union in 2004, citizens of member countries (also Iceland, Norway, Liechtenstein and Switzerland) can freely purchase almost any kind of property. Permission is only required for buying agricultural or forest real-estate. There are exceptions to this rule, e.g. when a buyer has been a permanent resident of Poland or has been renting a property for a certain length of time. In 2016, all permission requirements for EEA and Swiss nationals will be lifted. Non-EU/EEA nationalsForeigners who are not citizens from EEA states or Switzerland must obtain permission from the Ministerstwo Spraw Wewnętrznych i Administracji (Ministry of Interior and Administration). However, a property can be bought without a permission in the following cases: when buying a property for personal residential purposes (not bigger than 0.5 ha)

  • permanent residents of Poland for more than five years (counting from the date you obtained the Polish or European settlement permit)

  • permanent residents of Poland for more than two years (counting from the date you obtained the Polish or European settlement permit) who are married to a Polish citizen and will hold the property jointly with the spouse

  • foreigners inheriting a property

  • foreign legal personalities or partnerships without legal entity can buy undeveloped real estate (no larger than 0.4 ha) to fulfil its statutory aims

  • In some cases, the Ministry of Defence or Ministry of Agriculture can block investment if they consider it contrary to state interests. How to obtain permissionForeigners who need permission to buy land in Poland must prove their connection to the Republic of Poland. This may be: if (width Polish ethnicity or origins

  • marriage to a Polish citizen (in case your residency is less than two years or you do not want to hold property jointly)

  • have held a residence or settlement permit for less than five years

  • maintaining a business in Poland

  • Although the Ministry of Interior and Administration theoretically oversees all property permissions, you must apply to Urząd Dzielnicy Mokotów m. st. Warszawy (Warsaw municipality office). To apply for permission, you have to pay a stamp duty by wire transfer to the office's account. You need to prepare your own application form because there's no template. The following documents must be submitted to the Warsaw office: the original payment confirmation,

  • property details,

  • application form

  • documents proving your connections to Poland

For a complete list of documents, see Invest in Poland . Remember that if your purchase affects Polish defence, state security, public order or local social policy, your application may be rejected. If you are refused permission, you can appeal to Ministerstwo Spraw Wewnętrznych i Administracji. If this institution denies permission, you can appeal to Wojewódzki Sąd Administracyjny (local administration court). Permission is valid 12 months and can't be renewed. If you know you will need more time to buy a property, you can apply for a promesa, a document which guarantees permission in the future. It is issued by Ministerstwo Spraw Wewnętrznych i Administracji. By Just Landed

With the initial contract signed, the buyer will pay you the deposit to reserve the property. Deposits for residential property purchases in Poland are usually 20%, higher than in some parts of the world. At this point, both parties will agree on a date for completion. The notary will start the necessary work of carrying out the required checks and searches.

The best way to improve your chances of a quick sale is to get your documentation in order, and appoint a conveyancing solicitor as soon as possible. The following tips can also help you to sell your Polish property faster:

Alongside fees, there are usually taxes related to property sales. This is the case in most countries, but in Poland there is one main property tax affecting sellers. This is capital gains tax, also known as property sales tax.

If you sell within 5 years, you may have to pay a property sales tax of 19%. There is a possible exemption though, if you spend the proceeds of the sale on the purchase of another property in Poland within three years.

The only other tax to be aware of when selling property in Poland is Value Added Tax (VAT). The buyer pays this on the purchase of the property, but you may also have to pay VAT on some of your costs. For example, the commission charged by your estate agent. At the moment, VAT in Poland is set at 23%.

Poland (officially the Republic of Poland) is a Central European country, which is divided into 16 administrative subdivisions. With a population of nearly 38.5 million people, Poland is the fifth most populous member state of the European Union. The country covers some 312,696 square kilometres (120,733 sq mi) and mostly enjoys a temperate climate. The Polish are known for their friendly hospitality, vodka, pierogi and more.Renting property

You can also choose to use a property agency. This is a more costly option, as you will have to pay them a commission fee. Agency fees vary, and it is always best to clarify which services are included and which are not, in order to avoid unexpected charges. Some popular property agencies include:

The price of a property can be negotiated directly with the owners (this is actually common practice) or through an estate agent. Once an agreement has been reached, a contract will be drawn up. The contract must be made in the form of a notarial deed executed by a Polish notary. The notary will draw up a preliminary contract detailing the conditions of sale. A completion date will be set, and the buyer will pay the deposit. The deposit for property in Poland is typically around 20% of the property price. The notary will then carry out all the necessary checks. Once all is in order, the deal can be completed. 041b061a72


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