Purchasing real property
Polish law recognises the following types of real property:
- Land property: agricultural or non-agricultural parts of the land’s surface that constitute a separate subject of ownership.
- Buildings: although they are permanently attached to land, they constitute a separate property and they can be owned by a party that is separate from the owner of the land.
Separate ownership of buildings appears primarily in the context of the right to perpetual usufruct (discussed below). This is because the buildings purchased by a perpetual lessee when concluding the agreement, as well as the buildings erected by the lessee on the land in his perpetual usufruct constitute his property (article 235 of the civil code).
- Parts of buildings (flats): property that is separate from the land or the building, which makes it possible for it constitute a separate subject of ownership. The matters of separate ownership of flats are regulated by the act on flat ownership.
Foreigners have the right to purchase real property in Poland in accordance with the act on purchases of real property by foreigners.
Subject to the exceptions set forth in the act (discussed below), in order to purchase real property foreigners must obtain an administrative permit issued by the Minister of the Interior with the approval of the Minister of Defence, and in the case of agricultural property – also by the Minister of Agriculture and Rural Development.
Within the meaning of the act the purchase of real property consists in a transfer or an establishing of a title to the real property, with the said title having the form of ownership right or the right to perpetual usufruct.
Real property ownershio The owner may hold the real property, use it, and draw benefits from it. Other ways of administering the real property include, for example, selling it, bequeathing it, leasing it out, or establishing a limited property right on it. The ownership right may be limited solely by way of legislation. |
Perpetual usufruct The right to perpetual usufruct consists in the granting of a land property owned by the Treasury, province, district, commune, or a combination of these units to a natural or legal person for 99 years of use (or shorter, but no less than 40 years). This right pertains mostly to the land located within administrative boundaries of cities. |
In accordance with the act the real property may be purchased as a result of any legal event, and not just through a civil law agreement. The most important methods of purchasing real property that require obtaining a permit include:
- Administrative decisions, e.g. the decision concerning the return of expropriated real property in case of failing to complete the goal for which the real property has been expropriated;
- Court rulings, e.g. acquiring real property as a result of a division of property after a divorce or after lifting joint marital ownership;
- Acquisition by usucaption;
- Will inheritance by foreigners who do not belong to the group of statutory inheritors;
- Acquisition of real property for joint ownerships, e.g. together with the spouse who has Polish nationality;
- Transformation of a co-operative ownership right to the flat into the ownership right; however, the acquisition of a co-operative ownership right to the flat as acquisition of a limited property right does not require a permit.
It is worth noting that in Poland also function the so-called limited property rights (i.e. right’s on another party’s property) that give rights to property owned by another party that are usually vested in the owner. The following can be established on another party’s property:
Note: not to be mistaken with perpetual usufruct.
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The enable using another party’s property |
Mortgage (regulated in the act on land and mortgage registers and mortgages) |
In this case the beneficiary is not using another party’s property, because the mortgage is used to secure the payment of liability. Even the sale of the real property does not violate the rights of the encumbrancer, so it may demand that its claims be satisfied by anybody who becomes the owner or perpetual lessee. To simplify, if the debtor is not paying back his debt, the creditor has the right to have its claims satisfied by the real property on which the mortgage has been established, i.e. it may initiate enforcement proceedings and lead to the sale of the real property. It will have the right of pre-emption to the sum obtained from the sale, irrespective of who holds the ownership right. Therefore, prior to purchasing real property, it is very important to familiarise oneself with the current copy from its land and mortgage register (land and mortgage registers are discussed below), and in particular to check is section 4 thereof has any entries about establishing mortgage. The number of the land and mortgage register can be found here: |
Forms of acquring real property and the costs related to it
According to the Polish law the agreements concerning the transfers of ownership right to real property, as well as the right to perpetual usufruct, must be concluded in the form of a notarial deed. Any other form makes the agreement void and ineffective – the purchaser does not acquire the ownership.
Notarial deeds are documents of official nature. They are drawn up by notaries at notary offices. However, if the nature of the action or special circumstances (e.g. bad health of the person who wishes to perform the action in the form of a deed) require it, the notary may perform the action in another place.
The notary office we pick may be located in another city than our place of residence or the place where the real property is located.
A list of notary offices registered in Poland that we can use can be found in the Announcement of the Minister of Justice listing the registered notary offices. It is a good idea to compare the offers of several notary offices prior to selecting one; ask for a quotation of all notary costs and court fees.
When concluding the agreement the foreigner will be obligated to present to the notary the permit to purchase real property. The notary will not draw up the agreement without being presented such a permit.
Important documents pertaining to the real property purchased that should be presented to the notary also include:
Copy from the land and mortgage register |
The land and mortgage register is a document containing basic information about the given real property. It shows what rights to the real property are vested in whom, and who is the real property’s owner, what the total area of the flat is, as well as whether or not the real property is encumbered with mortgage or other third party rights. The land and mortgage register is maintained by the district court having jurisdiction over the real property’s location. The land and mortgage registers are open to the public. Access to the land and mortgage registers is available via the website of the Ministry of Justice at https://ekw.ms.gov.pl/eukw/menu.do, and printing a document from this site has the power of a document issued by the court. |
Extract from the land and property register | The land and property register is a uniform Polish register of information about land, buildings and flats that also contains, among other things, the data about their location, area, purpose, as well as the owners and other entities managing these lands and buildings. The register is maintained by the district governor (Pol. ”starosta”). Applications for extracts from the register may be submitted solely by specific entities, i.e. the real property\'s owner, a person with legal interest in it, government administration bodies, as well as local government units. |
The notary always draws up the agreement in Polish, and upon a party’s demand additionally in a foreign language. To this end the notary may use his or her own knowledge of the given language or to use the help of a certified court translator.
The parties place their signatures on the original of the notarial deed, which remains at the notary’s office. That is because the notary is obligated to keep the originals of the deeds for the period of 10 years from the date of drawing up. When this time elapses or when he or she stops running the notary’s office, the documents are forwarded to the archive of land and mortgage registers of the district court having jurisdiction over the notary’s office’s address.
Therefore, the parties receive only copies of the deed. If an additional copy is required (e.g. if the first copy was lost or damaged), the parties may obtain them even years after the agreement is concluded in any number of copies at the office of the notary who drew it up or at the competent district court.
For drawing up an agreement in the form of a notarial deed the notary is entitled to a remuneration, the co-called notary fee (Pol. “taksa notarialna”), whose sum is decided freely by the notary. However, the notary has no right to demand more than the rates standardised by the Resolution of the Minister of Justice concerning the maximum rates of the notary fee.
It must be stressed that the rates set forth in the above-mentioned Resolution are net and the applicable VAT (23%) must be added to them.
The basis upon which the notary fee is calculated is the value of the real property defined by the parties. The fee is a percentage or a fraction of a percentage of the real property’s value.
In accordance with § 3 of the resolution quoted the maximum rate for the given value is:
- up to PLN 3000 – PLN 100;
- from PLN 3000 to PLN 10 000 – PLN 100 + 3% of the value above PLN 3000;
- from PLN 10 000 to PLN 30 000 – PLN 310 + 2% of the value above PLN 10 000;
- from PLN 30 000 to PLN 60 000 – PLN 710 + 1% of the value above PLN 30 000;
- from PLN 60 000 to PLN 1 000 000 – PLN 1010 + 0,4% of the value above PLN 60 000;
- from PLN 1 000 000 to PLN 2 000 000 – PLN 4770 + 0,2% of the value above PLN 1 000 000;
- above PLN 2 000 000 – PLN 6770 + 0,25% of the value above PLN 2 000 000, but no more than PLN 10 000, and in the case of acts performed among parties in the 1st tax group within the meaning of the act dated 28 July 1983 on the inheritance and gift tax – no more than PLN 7500
Therefore, in the case of a real property with the value of, for example, PLN 400.000,00 the notary fee cannot be greater than PLN 2.370. Furthermore, in the case of certain types of agreements the fee rate is lower and equal to an appropriate percentage of the fee calculated in accordance with the above-mentioned §3 of the resolution. For example, in the case of a sale agreement concerning a flat, a detached house or a land property constituting a construction plot, this fraction is equal to 1/2 (§ 6 of the resolution). Therefore, if the value of the real property is equal to PLN 400.000,00 then the notary’s remuneration cannot exceed PLN 1.185 (1/2 of PLN 2.370).
It is a common practice of notary offices to set the costs at their maximum level. However, we can always try to negotiate the fee, because the charges can be much lower. It is also a good idea to ask that all fees be disclosed prior to purchasing the real property through the given office.
It is also worth noting that under article 6 § 1 of the law on notaries a party that unable to pay the remuneration demanded by the notary may apply to the court for release from such payment in full or in part. Such application is filed with the district court having jurisdiction over the applicant’s place of residence.
The application should specify the notarial action from whose costs we would like to be released, as well as justify why completing this action is necessary and why we cannot bear its cost. The application should be supplemented with the official form containing the declaration about the family status, property, incomes and means of support of the natural person applying for the release from court fees in a civil proceeding.
The court verifies the information included in the application by way of non-litigious proceedings. If the court’s findings confirm that the applicant really is unable to bear the costs, the court will designate a notary that will perform the required notarial act at the cost of the Treasury.
Apart from the above-mentioned remuneration for drawing up the deed, the notary also charges the following to the parties to the agreement:
- A fee for making copies of the deed. The price of a copy depends on the number of pages in the deed and it is PLN 6 per each started A4 page (however, these prices are set individually and they can be lower). Copies are provided to the parties to the deed, the court maintaining the land and mortgage register, the geodetic office, the tax office, as well as the Minister of the Interior, because in the case of real property purchased by foreigners the notary is obligated to submit to the above-mentioned Minister a copy of the deed under which the foreigner has purchased or acquired a real property in Poland.
- Court fee in respect of applications to make entries in the land and mortgage register. When entering ownership right or the right to perpetual usufruct the court fee is PLN 200 net. Furthermore, if the real property has no land and mortgage register, it will be necessary to pay PLN 60 net for the application to create one. Applications for making the relevant entries in the land and mortgage register are included by the notary in the deed, whose copy together with the court fee is sent to the competent district court.
- Tax on civil-law acts in the case of purchasing real property on the secondary market – 2% of the tax basis. The tax basis is the real property’s market value. The tax liability rests solely with the purchasing party.
Cases of real property purchases made by foreigners when the permit is not required
The act provides for numerous exceptions in which the purchase of real property may take place without the need to acquire a permit. These cases are defined specifically in article 8.
Nie wymaga uzyskania zezwolenia:
- Purchase a separate residential unit within the meaning of the act on the ownership of premises (i.e. a flat in a block of flats).
- Purchase a garage, if the purchase is related to meeting the foreigner’s residential needs.
- The garage must be an addition to a house or a flat that is already owned by the foreigner or is being purchased together with the said garage. Therefore, it is impossible to purchase just a garage without a permit in order to, for example, lease it out.
- Entities with a registered seat (e.g. legal persons) do not use the above-mentioned permit, because in their case the need to satisfy residential needs does not apply.
- Purchase real property by a foreigner who has resided in Poland for at least 5 years from the date of obtaining the permanent residence permit or the permit for a long-term European Union resident.
- Purchase real property by a foreigner who is married to a citizen of Poland and who has lived in Poland for at least 2 years from the date of obtaining the permanent residence permit or the permit for a long-term European Union resident that, as a result of this purchase, will constitute statutory joint property of the spouses.
- Purchase real property by a foreigner, if on the date of purchase he or she has the right to be a statutory inheritor of the real property’s seller, and the real property’s seller has been its owner or perpetual lessee for at least 5 years.
- The order of statutory inheritance as well as the group of statutory inheritors are set forth in articles 931-9341 of the civil code, according to which the inheritors include: the testator’s descendants (children, grandchildren, great-grandchildren), spouse, parents, siblings, the siblings’ descendants, grandparents, the grandparents’ descendants, as well as the children of the testator’s spouse.
- What is important is the possibility of acquiring the real property, e.g. the testator’s niece will not acquire the real property through statutory inheritance, if the testator has left a child. However, as a person belonging to the group of statutory inheritors, she would be able to use the above-mentioned release if, for example, the testator’s child wished to sell her the real property inherited.
The above-mentioned exceptions do not apply to:
- Real properties located in the border zone (in simple terms it includes the communes located within 15 km from the Polish border) – article 12 of act on protecting the national border. A detailed list of these real properties is found in Resolution of the Minister of the Interior and Administration concerning the list of communes and other units of basic territorial division of the country located in the border zone, as well as the table specifying the reach of this zone.
- Agricultural lands with the area greater than 1 hectare.
The act also provides for other cases in which foreigners are released from the obligation to obtain the permit. They pertain mostly to the foreigners who are the citizens or entrepreneurs of countries that are parties to the agreement on the European Economic Area or the Swiss Confederation.