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Why to invest?
Many foreign nationals have realized significant
profits through the years by investing in real estate in Poland. Indeed,
the buying and selling of real estate in Poland over the course of the
past two decades has been brisk. Most industry experts who are watching
the real estate market in the Polish Republic now believe that the
buying and selling of real estate in Poland by foreign nationals will
increase even more over the course of the coming decade. This will
include activity by foreign nationals in the commercial, industrial and
residential real estate markets in Poland.
Why Polish Property Prices will rise?
Phasing out of permits for
foreign buyers
In order to stop an uncontrollable boom in property prices the
government have introduced a permit scheme for foreign buyers. In theory
there is no limit to the amount of permits a foreign buyer can be issued
but it is a safeguard to stop what is exceptionally cheap property being
snapped up by other Europeans. The permit scheme will be phased out
between 2009 (for an investment property) and 2016 (for agricultural
land).
Mortgages are a relatively new concept
At present only 14% of Poles have a mortgage, most preferring to wait
and buy for cash. The popularity of borrowing is however rising as Poles
feel more confident in the economy and the stability of property prices.
Borrowing will make the spending power of the local population greater
and in turn lead to higher prices.
Low cost flights from Europe
The introduction of Easy Jet routes to both Warsaw and Krakow has broken
the previous monopoly of British Airways and their partner, Lot. This
makes Poland a more affordable tourist detination and holiday lets along
with other tourist related business will continue to grow.
New motorway network
Poland is in the middle of a massive construction project which will
make the country far more accessable by road. This will put many of its
factories in a stronger position to compete with the rest of Europe -
more jobs .... more money .... higher property prices!
Poland
less on the edge of the EU
Warsaw has already seen tremendous benefits as a meeting place of East
and West wether that be the Russia or the Far East. In the long term the
EU is expected to expand further and when countries like The Ukraine
join Poland will no longer be the country in the East of Europe.
Attracting
Business
Poland, like Ireland only a decade ago, has high unemployment but a well
educated and motivated work force. It has already attracted the likes of
3M, Toyota, VW, LG, Tescos and Ikea to name but a few. If you understand
what happened in Ireland, you will understand what is about to happen in
Poland!
The land
is running out
For many years developers have enjoyed the ability to easily find new
greenfields on which to build. Times are changing with the 'Rynek
Nieruchomoci' reporting in June 2005 that there are now "problems
associated with gaining planning permission". As the supply of land
becomes more restricted but the wealth of the nation increases property
prices will rise.
 Where to Buy Polish real
estate?
As with any country where to buy is more about what you want.
Dolnolšskie would be a good bet for a stable tourist let due to its
popular resorts while Lubelskie has been indentified as the county with
the third best development potential in Poland (eleventh in all the ten
new EU member states) and so would represent an excellent location for
someone seeking high capital growth potential. Be aware that these are
general statements and even within each county there are choices. Lublin
(the capital city of Lubelskie) attracts 80,000 students every year to
its colleges and universities and so is a great place to buy a student
let.
If you are looking to retire or move to Poland the
possibilities are endless from the golden beaches in the North to the
mountain ski-slopes of the Sourth or the forests and lakes in between.
Throughout Poland you will also find medieval and renaissance cities,
untouched by the wars and industrialisation, that are perfect if you
want to start a tourist related business.
How to Buy Polish Property
and Real Estate?
The Permit System
The Polish know only too well the massive boom in property prices that
would occur if it was left to the free EU market - with farms for sale
for as little as 10,000 GBP how many would you buy? As such there are a
number of restrictions on what a non-Polish citizen can buy. These will
be gradually phased out between 2009 (for an investment property) and
2016 (for agricultural land). Their purpose was to stop property and
land becoming unaffordable to the local population which could in turn
have caused high inflation.
Some web sites will tell you that
you are restricted to buying so many square metres of land or x number
of properties. This is infact not true. As long as you can keep getting
permits you can keep on buying so if you want to buy more keep applying
until your first rejection!
You might also want to consider
applying for Polish nationality which would mean you could purchase
without a permit. This is possible, but not guaranteed, if you have a
parent or grandparent who was Polish and is an avenue well worth
exploring. Contact the Polish Embassy in your country for details on
eligability.
Who Needs a Permit
The Act on the Aquisition of Immovable Properities by Foreign
Persons 1920 begins by saying, "Acquisition of immovable
properties by a foreign person shall require a permit" and then goes on
to list a number of exceptions. Perhaps the best summary is in the
Polish Information and Foreign Investment Agencies book How to do
business - Investors Guide to Poland. Below are the key extracts
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A foreigner may
purchase real estate only after receiving permission from the
Ministry of Internal Affairs and Administration (after approved by
the Ministry of Defence and, in the case of farmland, also after
receipt of approval by the Minister of Agriculture)
From the day of
accession to the EU (1 May 2004), foreigners who are citizens or
entrepreneurs of the EEC countries do not need permission to
purchase real estate...
Exceptions to
the above are:
1) Farms and woodlands - permission is required during the first
12 years from the date of Poland's accession to the EU. However,
permission is not required if several conditions are fulfilled: if
the person who wants to purchase the real estate is a leaseholder
over a defined period (7 years for western regions of Poland and 3
years for the remainder ... and if the leaseholder personally
conducts agricultural activities and lives legally in Poland
2) "Second House" - permission is required during the first 5
years from the date of Poland's accession to the EU (however,
permission is not required if a foreigner lives legally and
continuously in Poland for 4 years or if he purchases a "second
house" in order to conduct business activities in tourism services
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So in summary if you are from the
EU you do not need a permit unless you are buying farmland, woodland or
a second property. For farmland or woodland you don't need a permit if
you can prove long term "Bonds with the Republic of Poland". This may be,
for example, that you have been renting farmland and using it for
agricultural purposes for several years. In other words you are an
active person in Poland! You also do not need a permit for your second
property as long as it will be used for touristic purposes - e.g. a bed
and breakfast, etc.
For the exact restrictions visit
www.paiz.pl,
click the Union Jack, select Polish Law from the menu across the top and
then 'Purchase of Real Estate by Foreigners' from the menu on the left
hand side You should also check the Acquisition of Real Estate by
Foreigners Act 1920 at
www.mswia.gov.pl/index_eng.php?dzial=20&id=60 where you will
also find translated forms that you need to complete in order to get a
permit
How Long does it take to
get a Permit?
The law requires that the Ministry of Internal Affairs and
Administration makes a decision on an application for a permit within
two months
Associated Costs
Please note the costs below are approximate and will vary depending on
the exchange rate and the area in which you buy or the solicitor/agent
that you use. You can also use the online
Associated Costs Calculator to give you an idea of costs for
a particular property or purchase price.
Agency Fees are charged to both the seller
and the buyer. As a buyer you will usually pay about 3 percent of the
purchase price but this varies so check with the agent first
Solicitor Fees - about 150 pounds or 1
percent on transactions over 9,000 pounds. You will also need to pay VAT
(22 percent) on these fees.
Taxes - 5 percent of the sale price (2
percent if buying a 'shared ownership property')
Court Fee - for registering the property in
your name. 2 percent of the sale price.
Resale Tax - Be aware that there is a 10
percent tax on a property that is resold within five years unless the
proceeds are invested in another Polish property
Buying to Let - The landlord is expected to
pay for common costs (maintenance, security, etc.), insurance, the
management agents fee and local property taxes. Rent collected must be
declared as income and is liable for income tax although the percentage
can be reduced by purchasing the property as a company.
Vit Klima
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604 568 553 |
