There is an established buying process in Poland and so long as you make sure all the steps are completed correctly, you can buy a property in Poland relatively easily and trouble free.
1. Property Investment, Decide What You Want!
You probably already have a good idea of what you are looking for.
Property Investment for Rental Income. If you simply want to buy a property in Poland for rental income, start with finding a good trustworthy property agent with whom you can establish a good rapport if only over the phone. You must take into account property management fees, these can be in the region of 5% to 20% and if you get a poor agent you can end up spending more on refurbishments, repairs and management than you end up getting in rental income!
If you are looking for a holiday retreat which will also be available for rental, then start with identifying location, see this list of holiday destinations in Poland, once you know where you want to be you can start looking for property via the Polish property portals.
2. Find a Property or Find an Agent?
Whether you start from selecting a property or an agent will depend upon your situation. It’s certainly worth establishing a good relationship with a property agent, an agent you have a good honest relationship with will be able to save you a lot of time and money if you want to buy a property in Poland. See our selected list of property agents here.
3. Visit the Property
If you have a property agent, they will be able to advise on the best type of property for rental and will be able to advise on a selection of properties, it’s possible to sort out all the formalities remotely. However, we suggest it’s definately worth coming over to take a look round yourself and compare different properties to get an idea on price and standards.
The estate agents market in Poland can be very competitive, agents will often refuse to provide sufficient detail about properties until they have signed a contract with you which guarantees their commission. This is because property buyers often try to come to an agreement directly with the property owners, bypassing the agent to save on commission costs (generally around 1% to 4%). Our advice is to find a good agent and stick with them.
Foreign Ownership Restrictions in Poland
Poland generally allows foreign nationals to own property, including land and residential or commercial properties. However, there are restrictions on owning agricultural land.
Legal Representation and Notaries
It is common for property transactions in Poland to involve legal representation, where a notary (notariusz) is engaged who plays a crucial role in the transaction process, ensuring that all legal requirements are met.
Notaries are public officials appointed by the Ministry of Justice. Their primary role is to authenticate legal transactions and documents. They ensure the legality and authenticity of various legal acts, such as property transactions. Notaries are required to maintain independence and impartiality and to act as neutral parties to the transactions they authenticate, ensuring fairness and legality.
Notarial Deeds
Property transactions in Poland typically require the preparation of a notarial deed (akt notarialny), which is a formal document signed before a notary. The deed includes details of the property, the parties involved, and the transaction terms.
Land and Mortgage Register
Property rights are registered in the Land and Mortgage Register (Ksi?ga Wieczysta). This register provides information about the ownership, encumbrances, and other relevant details of a property.
Zoning and Planning
Investors should be aware of zoning regulations and land-use plans when considering property development or construction projects. Local authorities regulate land use, and if you have any plans for land you may wish to purchase, such as putting up a new building, you should investigate before any transaction as compliance with zoning laws is essential.
Financing and Mortgages to Buy a Property in Poland
Financing options are available to buy a property in Poland, and investors can explore mortgage options from local banks. More on getting a mortgage in another post.
Rural Property Restrictions
There may be specific restrictions on owning and developing rural properties, particularly agricultural land. Investors interested in rural properties should carefully review the regulations governing such transactions.
Building Permits
Obtaining building permits is a crucial step in property development. Investors who wish to buy a property in Poland, should be aware of the procedures and requirements for obtaining necessary permits before commencing construction or renovation projects.
Lease Agreements
Regulations related to residential and commercial lease agreements can impact the property value, and investors should be familiar with the rights and responsibilities of landlords and tenants under Polish tenancy laws.
Property Taxes in Poland
Property transactions in Poland are subject to various taxes, including the Polish Real Estate Tax (Podatek od Nieruchomo?ci) and the Polish Civil Law Transactions Tax (Podatek od czynno?ci cywilnoprawnych or PCC). These taxes vary based on the type and value of the property, but should not discourage you to buy a property in Poland.
As a non resident you will also be taxed in Poland on income coming from Polish sources and there are a number of property related taxes including transfer fees, Polish VAT, rental income tax, corporate income tax and capital gains tax. Visit Property Tax International for an excellent review of the taxes and tax filing services for non resident property owners in the Polish real estate market. PTI are registered Tax Agents with HMRC and Revenue allowing clients to combine both their Polish and UK or Irish tax returns using the one accountancy firm. PTI is part of the multinational organisation The Taxback Group.
Related Resources
Real Estate in Kraków, an excellent blog about the property market in Kraków.
Photo credit thanks for photo of Warsaw skyline.
Interesting post on land ownership, which claims that if you buy a property in Poland, the land remains the ownership of the local council which can take the land if it’s required for local infrastructure projects etc. Need to check this out.