Real estate transactions, including sales, purchases, leases, and investment properties, require thorough legal preparation and familiarity with local regulations. Whether clients are buying a vacation apartment by the sea, an investment property in the mountains, or commercial real estate in major cities, each transaction comes with unique legal and logistical requirements. For individuals unable to participate personally, using a power of attorney is often the most efficient solution, ensuring the process proceeds smoothly.
Our law firm, working in close collaboration with notaries and trusted real estate agencies throughout Poland – in locations such as Warsaw, Gdańsk, Katowice, Łódź, Rzeszów, and Wrocław – offers clients comprehensive support. From luxury apartments on the Baltic coast to scenic investment properties in mountainous regions, we ensure client safety, meticulous handling of formalities, and protection of their interests at every stage of the transaction.
Polish real estate law generally offers clear and stable regulations, allowing potential investors to make informed decisions when entering into property transactions. Moreover, various legal measures and institutions are in place to help investors safely carry out transactions tailored to their specific needs and expectations.
The most common legal titles to real estate in Poland are the freehold rights, i.e. the ownership right and the perpetual usufruct right, obligation rights, such as lease, lease with the right to collect profits or leasing. Polish law also provides several limited property rights such as easements or usufruct.
Types of property rights
Understanding property rights is fundamental to any real estate transaction, as these rights define the scope of access, usage, and control over the property. In Poland, there are several types of property rights, each with specific legal implications, affecting how property can be used, transferred, or developed.
These include:
- Ownership (Własność)
Full ownership rights provide the highest level of control, granting the owner unrestricted access to, and authority over, the property. Ownership rights include:
- Right to Use and Develop: Owners have full autonomy to use the property for personal, commercial, or investment purposes, within the boundaries of local regulations.
- Right to Transfer and Sell: Ownership rights are freely transferable and can be sold, inherited, or otherwise disposed of.
- Right to Modify: Owners can modify or improve the property as they wish, subject to zoning regulations and building codes.
Ownership is the most comprehensive and flexible property right, offering long-term security, stability, and control. It is also the most valuable form of property right, making it highly desirable for residential, commercial, and investment purposes.
- Perpetual Usufruct (Użytkowanie Wieczyste)
Perpetual usufruct is a long-term right that grants individuals or entities access to use and develop land owned by the state, usually with terms lasting 99 years and the option to renew. Key aspects include:
- Limited Ownership: While similar to ownership, perpetual usufruct does not grant full property rights; the state retains ownership of the land, and the user has specific obligations regarding its use.
- Renewal Terms: Typically granted for 99 years, with renewal options. After the period expires, the right can often be extended upon request and approval from the relevant authorities.
- Purpose and Restrictions: The right is usually granted with specified purposes, often for commercial or residential development, and the user must adhere to those terms.
Perpetual usufruct offers a balance between ownership and lease, allowing businesses and developers access to valuable land for extended periods, though with more restrictions than full ownership.
- Lease and Tenancy (Najem i Dzierżawa)
Lease and tenancy rights are temporary agreements that grant tenants specific usage rights for residential or commercial purposes for an agreed-upon term. Key features include:
- Temporary Usage: Leases are typically set for fixed terms (e.g., one year, five years), granting tenants the right to occupy or use the property without ownership.
- Commercial and Residential Applications: Tenancy agreements are common for commercial spaces, such as offices or retail properties, as well as for residential rentals.
- Renewal and Extension Options: Many lease agreements allow tenants to renew or extend their leases under similar conditions, providing flexibility for both tenants and landlords.
- Right to Sublease (if permitted): Depending on the agreement, tenants may have the right to sublease the property, adding potential revenue streams for commercial tenants.
While leases do not offer ownership, they provide businesses and residents with stable access to properties for the duration of the lease, making it a popular choice for those who seek flexibility without a long-term commitment.
Transferability and Impact on Property Value
Each type of property right in Poland comes with unique characteristics and procedural requirements that impact transferability, usage, and ultimately the property’s market value. For example:
- Ownership Rights: These rights are fully transferable and inheritable, making them highly attractive and valuable. They also come with fewer restrictions, allowing for flexible usage and development, which can enhance the property’s long-term value.
- Perpetual Usufruct: While transferability is possible, it typically requires state approval, particularly when modifying the designated purpose of the land. The limitations of perpetual usufruct may slightly lower the property’s value compared to full ownership, although its long-term nature provides stability.
- Lease and Tenancy: These rights are generally non-transferable without the property owner’s consent. Lease agreements with favorable terms can add value, particularly for commercial tenants, but they lack the security of full ownership or perpetual usufruct.
Understanding these property rights and their implications is essential for investors, as the type of right affects the ease of transfer, potential returns, and flexibility of property use. By selecting the appropriate type of property right, investors can align their real estate portfolios with their specific goals, whether seeking long-term security, temporary access, or strategic investments.
Power of attorney and the law firm’s role in the real estate sale process
Acting on behalf of the client, our law firm’s appointed representative assumes responsibility for all activities related to the sale process. Our firm provides comprehensive support, including:
- Negotiating Contract Terms with the Real Estate Agency
Our representative negotiates the terms of cooperation with the real estate agency, considering critical factors such as:- Commission rates,
- Scope of services provided by the agency (e.g., property promotion, presentation to prospective buyers, organizing open houses),
- Potential exclusivity terms to avoid conflicts of interest and focus on effective collaboration with a single intermediary.
- Coordination of Property Promotion and Presentation
Our representative monitors the agency’s activities, ensuring that the promotional strategies align with the client’s expectations. This guarantees that the property is advertised on relevant platforms and that photographs and promotional materials are professionally prepared to attract potential buyers. - Oversight of the Agency’s Actions and Progress Reporting
Our law firm continuously oversees the agency’s performance, ensuring that the intermediary’s efforts yield the desired results. Our representative requires regular progress updates from the agency, providing information on the number of interested clients, scheduled presentations, and feedback on the property. Upon client request, we also deliver detailed market updates to allow adjustment of the sales strategy, if necessary. - Ensuring Compliance with Agreements and Protecting Client Interests
Our representative ensures that all agency actions adhere to the contractual agreements. By maintaining regular contact with intermediaries, we can promptly address any discrepancies, safeguarding the client’s interests. We also verify that the offer’s conditions are appropriately presented to potential buyers to avoid misunderstandings and expedite the sale process. - Assistance with Formalities and Transaction Finalization
Our firm assists with all formalities related to the transaction’s completion, which may include:- Preparing and reviewing the preliminary or sale agreement,
- Scheduling the notarial deed appointment and organizing necessary documents,
- Monitoring the flow of funds and transferring them to the client’s account.
- Post-Sale Support
When needed, our law firm offers post-sale support, which may include assistance with tax matters or final cost settlements. Our representative can also handle formalities related to mortgage release (if applicable) or termination of service agreements.
Engaging legal and tax advisors is invaluable for investors navigating Poland’s real estate market. Advisors offer insights into complex regulations, including:
Legal Due Diligence: Ensuring the property has a clear legal status and identifying any potential encumbrances.
Tax Planning and Compliance: Advisors help structure transactions to optimize tax efficiency, particularly in commercial and investment properties.
Navigating Local Regulations: Professional guidance minimizes risk by helping investors meet municipal and regulatory requirements.
Signing the contract with the real estate agency by the law firm
In Poland, real estate agency fees typically range from 2% to 10% of the transaction value, depending on the scope of services provided and the property’s location. Here are key aspects to consider when signing a contract with a real estate agency to ensure clear terms and protect your interests:
- Scope of Services: Confirm which services are included in the fee, such as promoting the property, organizing viewings, negotiating with potential buyers, and providing legal support for documentation.
- Exclusivity Conditions: Check if the contract grants the agency exclusive rights to sell the property, which may restrict your ability to work with other agents.
- Contract Duration: Pay attention to the contract’s length and the conditions for termination, ensuring it aligns with your needs.
- Responsibilities of Each Party: Clearly outline both the agency’s responsibilities and your own to prevent misunderstandings during the collaboration.
- Penalty Clauses: Make sure the contract includes provisions for penalties if either party fails to fulfill their obligations under the agreement.
- Additional Costs: Verify if there are any additional fees beyond the agency’s commission, such as costs for promotional materials or professional photography services.
Carefully reviewing these points before signing can help you make an informed decision about working with the selected real estate agency, providing security and clarity throughout the transaction
Real estate purchase by a representative
Purchasing real estate can also be handled by a representative, which is particularly beneficial for individuals who are unable to attend the transaction in person. Acting under notarial power of attorney, our law firm manages negotiations, conducts legal and tax analysis of the property, and finalizes the purchase, ensuring alignment with the client’s interests.
Verifying the legal and tax status of the property
Before purchasing or selling real estate, it is crucial to thoroughly examine its legal and tax status. Our law firm conducts a comprehensive review, assessing the following elements:
- Land and Mortgage Register:
- Ownership and Property Rights – to confirm the seller’s lawful ownership and verify any third-party rights, such as easements.
- Mortgages and Other Encumbrances – analysis of Section IV of the Land and Mortgage Register for mortgages and other obligations affecting the property.
- Notations – verification of any legal or administrative proceedings that could impact the property’s legal status.
- Land Register Status and Local Zoning Plan:
- Extracts from the Land and Building Register – these documents provide information on the plot’s area, land type, and intended use.
- Local Zoning Plan – verification of development possibilities if the client plans to build and identification of land-use restrictions.
- Administrative and Legal Encumbrances:
- Easements and Usage Restrictions – to determine whether the property is subject to transit or access easements or other limitations.
- Administrative Decisions – review of any ongoing administrative proceedings that could impact the property (e.g., expropriation for public investment).
- Tax Matters:
- Property Tax – verification of any outstanding taxes on the property, which could be transferred to the new owner.
- Civil Law Transaction Tax – assessment of the responsible party and amount due for this tax based on the transaction type.
- Ground Lease Fees (if applicable) – confirmation of timely payments.
- Technical Condition and Building Documentation:
- Building Permits and Technical Inspections – verification of compliance with regulations and whether all required permits and inspections are in place.
- Boundary Alignment – verification of plot boundary alignment with the land register and geodetic records to avoid disputes with neighbors or the municipality.
- Obtaining Required Documents from Authorities:
- Certificates of Non-Debt – e.g., certification of no outstanding liabilities to the Social Security Office or local tax authorities.
- Confirmation of Land Use – obtaining confirmation from the municipal office regarding the plot’s designation in the local zoning plan.
- Applications for Land and Mortgage Register Documents, Land Register Extracts, and Plot Change Records – assistance with document applications to confirm the property’s legal status.
Through a comprehensive analysis of these documents and data, our firm provides clients with full support to ensure a safe transaction.
Cooperation with notaries and real estate agencies nationwide
In collaboration with experienced notaries and real estate agencies, our law firm offers transaction support throughout Poland, including in Gdańsk, Katowice, Łódź, Rzeszów, and Wrocław. Notaries ensure document accuracy, while real estate agencies professionally manage property promotion and presentation, facilitating seamless transaction completion.
Sale of inherited property
Inherited property in Poland often requires a series of formalities to establish clear ownership rights and fulfill legal obligations. These steps commonly include probate proceedings to officially confirm the inheritance and notification of the inheritance to the tax office to meet tax compliance requirements.
Our law firm offers comprehensive assistance in managing these additional formalities, ensuring a smooth and legally compliant process for the new property owner. We support clients by:
- Conducting Inheritance Analysis: We carefully review the client’s inheritance situation to confirm ownership rights and identify any potential legal issues.
- Obtaining Necessary Documentation: Our firm assists with obtaining documents that legally confirm the client’s inheritance rights, such as a court inheritance ruling or a notarial inheritance deed.
- Filing Required Tax Documentation: We manage the submission of inheritance-related tax filings to the tax office, ensuring that all tax obligations are met on time and in full compliance with Polish tax regulations.
By handling these steps, we help clients secure their inherited property rights promptly and with full legal certainty, enabling a seamless transition toward the sale or management of the property.
Real estate transfer agreement – rules and key elements
A real estate transfer agreement must be prepared in compliance with established rules to protect the parties’ interests. This agreement requires a notarial form, ensuring legal compliance. Notaries play a key role in securing legal certainty for both parties and collect notarial fees. The agreement must meet specific requirements to guarantee legal validity and safeguard both parties’ interests.
What is Real Estate?
Before proceeding with a transaction, it is essential to understand what constitutes real estate under Polish law. Real estate includes not only houses, apartments, and buildings but also land, forests, plots, and agricultural areas. The Civil Code precisely defines the scope of real estate, which is crucial when drafting a transfer agreement.
How Should a Real Estate Transfer Be Executed?
A real estate transfer agreement must be executed in notarial form to be legally binding. The notary plays a crucial role in protecting both parties’ interests and ensuring compliance with notarial law. Notary fees and other charges, such as court fees, VAT, and document copy costs, apply.
What Must the Real Estate Transfer Agreement Include?
To comply with legal requirements, the agreement must contain the following essential elements:
- Date and time of execution,
- Location of the notarial deed,
- Notary’s details,
- Parties’ details, including parents’ names and addresses,
- Parties’ statements consenting to the agreement terms,
- Confirmation of deed reading and acceptance,
- Signatures of the parties and the notary.
Real estate transfer agreements are complex and require expertise. We recommend working with an experienced real estate lawyer to ensure accuracy and safeguard client interests.
Tax obligations for real estate transactions
Real estate transactions in Poland come with specific tax responsibilities:
- PCC (Civil Law Transaction Tax): For secondary market transactions, a 2% tax is levied on the property’s market value, usually paid by the buyer.
- VAT: Primary market transactions, such as new properties from developers, are typically subject to VAT rather than PCC.
- Property Tax and Lease Tax: Owners and lessors may be subject to annual property taxes or lease-related taxes, depending on the type of property and usage.
For investors, understanding these taxes ensures compliance and helps accurately project investment costs.
Type of agreement for real estate sale
The type of agreement chosen for a real estate transaction significantly impacts the transaction’s security and protection of both parties’ interests. Various types of real estate agreements carry different legal and financial implications. The choice of agreement depends on factors such as transaction stage, parties’ obligations, and security requirements.
Types of real estate sale agreements
- Preliminary Agreement – signed when additional formalities (e.g., buyer obtaining a mortgage) need to be completed. This agreement obligates both parties to finalize the sale within a specified period. A preliminary agreement can be in written or notarial form, with the latter offering greater legal protection.
- Developer Agreement – primarily used for purchasing properties from developers. It governs the terms of transferring property ownership upon completion of construction and technical handover.
- Sales Agreement – the final agreement that transfers ownership to the buyer. This must be executed in notarial form, ensuring legal compliance and protecting both parties’ interests.
Importance of Agreement Form
The form of the agreement is critical as it determines the level of legal security for the transaction. A notarial deed ensures legal compliance and effectively protects both parties’ interests. Additionally, a notarial deed is necessary to record ownership changes in the Land and Mortgage Register, confirming property rights transfer.
Working with an experienced law firm and notary is essential for selecting and drafting the appropriate agreement form, minimizing errors, and avoiding legal complications.
Law on the acquisition of real estate by foreigners – key provisions
Real estate acquisition by foreigners in Poland is possible but subject to certain conditions. The Law on the Acquisition of Real Estate by Foreigners establishes key regulations for foreigners purchasing property.
Who Qualifies as a Foreigner?
The law defines a foreigner as:
- An individual without Polish citizenship,
- A legal entity based abroad,
- A company without legal personality based abroad and established under foreign law,
- A company or legal entity based in Poland but controlled by foreign entities.
Requirement for a Permit
Foreigners must obtain a permit issued by the Minister of Interior and Administration. Acquiring property without this permit is invalid. However, exceptions exist, such as for EU citizens and residential properties up to 0.5 hectares meeting personal needs.
Permit Exemptions
No permit is required for:
- Independent residential units,
- Residential units with a garage associated with the residence,
- Properties for foreigners residing in Poland for over 5 years,
- Properties acquired as part of a marital community with a Polish citizen spouse.
Application for Real Estate Acquisition by a Foreigner – How to Complete It?
The Minister of Interior and Administration grants permits based on an application in which the applicant must demonstrate ties to Poland. How can this be done? The following factors may be indicated:
- Polish nationality or descent,
- A spouse who is a Polish citizen,
- A residence permit: temporary (this does not apply to temporary residence permits for victims of human trafficking or due to circumstances requiring short-term stay in Poland), permanent, or EU long-term resident,
- Membership in the management board of a controlled commercial company,
- Engagement in business or agricultural activities in Poland, in accordance with Polish law.
By including relevant ties to Poland, the applicant strengthens their case for obtaining the necessary permit to acquire real estate in Poland.
