Buy or sell house in Poland

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A TRANSLATION OF FRAGMENTS OF AN ARTICLE BY PAWEL PUCH - A LAWYER SPECIALISING IN PROPERTY MARKET FROM "KRAKOWSKI RYNEK NIERUCHOMOSCI" NO:13/2004.

New regulations of purchasing properties in Poland for foreigners.

On 20th February 2004 the Polish government issued a new law regulating the purchase of properties in Poland by foreigners and legal tax charges. This regulation was signed by the President of Poland on the15th March 2004. The old law states that foreigners willing to buy properties or shares in companies owning properties in Poland need to obtain permission. The new regulation introduces many exceptions to this rule.

Who is considered to be a foreigner?

According to this new regulation, a foreigner is:

a person without Polish nationality
a legal registered body with its main registered address abroad
joint venture of individuals or legal registered bodies mentioned above with its main domain abroad, set up in accordance to the law of another country
a registered body or joint venture which has an address in Poland, but is controlled by a person or bodies mentioned above. 'Being controlled' means that the foreigner(s) have at least 50% shares in the company or have a dominant role in accordance to regulations: art. 4 § 1 pkt 4 lit. b) lub c) lub e) ustawy z dnia 15 wrzesnia 2000 r. – Kodeks spólek handlowych (Dz. U. Nr 94, poz. 1037, z pózn. zm.

The regulations for the purchasing of properties by foreigners cover all properties in Poland, regardless of their current owner. Owning property can be achieved through different means ie: the sale, gift, exchange, lifetime lease, also inheritance and Court Orders.

Permission from the Ministry of Internal Affairs and Administration.

As in the old version of legislation, foreigners intending to own a property in Poland have to still obtain permission from the Ministry of Internal Affairs and Administration. This application is also passed on to the Ministry of National Safety and in the case of rural property also the Ministry of Agriculture and Development of Rural Areas. The way of obtaining this permission has been changed in the new legislation. Lack of refusal within 14 days from the time of receipt of the application for permission is considered as such permission being granted.

A new regulation limits the rights of Ministry of Internal Affairs and Administration to refuse permission in certain cases (permission is granted automatically).

New to this regulation is the creation of 2 groups of foreigners and different rules are applied to each group. Citizens of the EU are treated differently to non-EU citizens. There are also introductory times which are leading to a complete freedom in the property market amongst the EU citizens.

When permission for buying property in Poland is no longer required.

As long as the property in question is not located in the area close to Poland's international borders and does not exceed 1 hectare of agricultural land, no permission is required for both EU and non-EU citizens for purchase/obtaining of:

a house, flat or garage which satisfies living requirements of the buyer (as stated in ustawy z dnia 24.06.1994 r. o wlasnosci lokali (Dz. U. Nr 85, poz. 388)
a property bought by a foreigner who has been living for at least 5 years in Poland since his/her right of abode was granted
a property bought by a spouse of a Polish citizen living in Poland for at least 2 years since his/her right to abode in Poland was granted, which will be owned by both - a Polish citizen and his/her foreign spouse
a property which a foreign person is entitled to inherit as long as the current owner was using it for at least 5 previous years
land or parcels of land the total area of which in any parts of Poland does not exceed 0,4 ha in the town/city area owned by a legal registered body which has a domain in Poland
the obtaining of a property by a foreign bank in order to repay debts owed by a current property owner.

Additionally EU citizens do not require permission for:

1.purchase of land other than agricultural and forestry (woodland).

2.purchase of agricultural land if the foreigner is already leasing the land in certain areas of Poland:

in wojewodztwie dolnoslaskim, kujawsko-pomorskim, lubuskim, opolskim, pomorskim, warminsko-mazurskim, wielkopolskim, zachodnio-pomorskim after 7 years from the day of the leasing contract, as long as they were using it for agricultural purposes and legally lived in Poland during time.
in województwach: lubelskim, lódzkim, malopolskim, mazowieckim, podkarpackim, podlaskim, slaskim, swietokrzyskim after 3 years from the day of the leasing contract, as long as they were using it for agricultural purposes and legally lived in Poland during this time.

3.the purchase of a second home which will not be the permanent residence of the buyer if the buyer legally and continually lives in Poland for at least 4 years or buys the property to provide tourist services.

The purchase of agricultural and forestry (woodland) land after 12 years and a second home after 5 years from the time of Poland joining EU will require no permission for all EU citizens.

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PLEASE CHECK WITH YOUR LAWYERS WHEN BUYING PROPERTY IN POLAND.