From this article, you will learn whether, as a foreigner, you need to obtain a decision permitting you to buy real estate in Poland, how to prepare an application for such a decision, and what will happen if you purchase real estate without the required permit.
Do you know what the oldest Polish law still in force today is?
….?
It is the Act of March 24, 1920, on the acquisition of real estate by foreigners. It is already 105 years old! This act was issued in the interwar period, survived the Polish People’s Republic and the political transformation in Poland! Since its issuance, it has been amended many times, and its current version has little in common with the 1920 version. In fact, only one statement remains almost unchanged from its original version, namely:
The acquisition of real estate by a foreigner contrary to the provisions of this Act is invalid (in 1920 it was Article 7 of this Act, and currently it is Article 6(1)).
This provision is probably the most important provision of this Act. If you are a foreigner and want to purchase real estate in Poland, you need to know that in some cases you will have to obtain the appropriate permit in order to do so in a valid and effective manner.
If you purchase real estate without obtaining the required permit, this legal transaction will be considered invalid at the moment it is performed. This would mean that it would have no legal effect and that such a defective transaction cannot be “remedied,” e.g., by obtaining a permit at a later date. How can this be avoided? You will find out in this post. I invite you to read on!
Permit for the purchase of real estate by a foreigner – who must obtain it?
A permit for the purchase of real estate in Poland should be obtained by a foreigner. However, you should know that according to the polish Act on the Acquisition of Real Estate by Foreigners, a foreigner is not only a natural person who does not have Polish citizenship. A foreigner is also (among others) a legal person or a company without legal personality that has its registered office abroad. Such entities may also purchase real estate for themselves. Therefore, remember that if you want to purchase real estate for your company, it may also be necessary to obtain a permit.
What is the acquisition of real estate by a foreigner and which authorities issue the permit?
The acquisition of real estate is nothing more than the acquisition of ownership rights to that real estate or perpetual usufruct rights (perpetual usufruct in Polish law is a temporary and paid right to use real estate owned by another entity, e.g., the State Treasury, and is very similar to ownership rights).
Therefore, in order to acquire ownership (or perpetual usufruct) of real estate, it is generally necessary (with certain exceptions, which you can read about below) to obtain a permit. This permit takes the legal form of an administrative decision, so we apply all the provisions concerning administrative procedure in these matters (e.g., the possibility of appealing against such a decision, the deadlines by which the permit should be issued, etc.). Such a permit is issued by the minister responsible for internal affairs, unless the Minister of National Defense objects. In case of agricultural real estate, also the minister responsible for rural development may raise an objecton.
What conditions you need to meet to get permission to buy real estate in Poland?
As you can probably guess, your application won’t always be approved, and you might face a refusal. However, we’re assuming that won’t be the case for you. So, what conditions do you need to meet to get a positive decision?
First of all, your purchase of real estate can’t threaten the defense, security of Poland or public order. It also can’t be against social policy or public health.
Issues relating to threats to the defense and security of the state are examined by the Minister of National Defense, who may object to your purchase of the property. In practice, the Minister of National Defense examines whether the property is located in a border zone or near military units and facilities. The intended use of the property, i.e., the purpose of the purchase, will also be of significant importance.
Secondly, you must demonstrate that there are circumstances confirming your ties with Poland. You can demonstrate these ties by indicating, for example, that you have Polish nationality or are of Polish origin (despite not having Polish citizenship) or that you are the spouse of a Polish citizen. You can also prove your ties with Poland by documenting that you have a permanent residence permit in Poland, a long-term EU residence permit, or most types of temporary residence permits. Such ties will also be proven by the fact that you conduct business or agricultural activity in Poland that is subject to Polish law.
What should an application for a permit for a foreigner to purchase real estate look like?
An application for a permit to purchase real estate should contain five elements:
Firstly, the applicant’s details and legal status
What does this mean? If you are a natural person, simply provide your first and last name, citizenship, and place of residence. If you are applying for a permit on behalf of a legal person or a company without legal personality , provide its name, country of residence and address, business activity, names and surnames of board members, as well as information about partners, shareholders, and stockholders (e.g., if a partner is a natural person, provide their first and last name, citizenship, and place of residence).
Secondly, the application for permission to purchase real estate should include the identification of the property being purchased.
In case of land, this will be the legal title to the property (e.g. ownership), street, town, municipality, and voivodeship, cadastral parcel number, area in hectares, land register number and building characteristics.
In case of a building, the application will require the building’s number, usable area in square meters, street, town, municipality, and voivodeship.
It may also happen that you will be purchasing an apartment that is a separate property. In this case, you should provide the building and apartment number, street, town, municipality and voivodeship, usable area of the apartment in square meters, and share in the common property on which the apartment is located.
Thirdly, in the application for a permit to purchase real estate, you should identify the seller, i.e. provide their first name, surname and address (if the seller is a natural person) or the name and address of their registered office (if the seller is a legal person).
Fourthly, in the application you should also specify the legal form of the property purchase – this means that you must specify whether you intend to purchase the property, for example, through a sale agreement or a donation agreement.
Fifthly, in your application for a permit to purchase real estate, you must indicate the purpose for which you are purchasing the property and your ability to purchase it. When indicating your ability to purchase the property, you should show that you have the financial means to do so, including explaining the source of these funds.
Remember to attach documents to the application that confirm all the circumstances you refer to.
What does a permit for the real estate purchase look like?
A permit for the purchase of real estate, like any other administrative decision, will generally include, among other things, a ruling and its justification. The justification may sometimes be limited to legal justification (i.e., an indication of the provisions on which the authority based its decision and an explanation of this provisions). This will be the case when national defence and security reasons require it. In such a situation, the decision will not contain factual justification, including an indication of the facts on which the Minister based the decision.
In principle, however, each permit for the acquisition of real estate by a foreigner should include, among other things, an indication of the buyer and seller of the real estate and the subject of the acquisition.
The permit will be valid for two years from the date of its issue. During these two years, you should purchase the property specified in the decision. If you fail to do so and are still interested in purchasing the property, it will be necessary to repeat the entire procedure and obtain a new permit. The regulations do not allow for an extension of the above two-year period.
In addition, you will not be able to transfer the permit to another party – e.g. in a situation when you were interested in purchasing a given property, but after obtaining the permit you changed your mind, and there is another interested party – also a foreigner – interested in purchasing the property. In such a situation, it will also be necessary to obtain a new permit to purchase the property.
In what situations is it not necessary for a foreigner to obtain a permit to purchase real estate?
You will not need a permit to purchase real estate in (among others) the following cases:
- when you intend to purchase a separate residential property (in other words, simply a ‘flat’ that you are purchasing solely to meet your housing needs),
- when you purchase a garage and it is related to your housing needs,
- when you have been living in Poland for at least 5 years from the date of granting you a permanent residence permit or a long-term EU resident’s residence permit,
- when you are the spouse of a Polish citizen and you purchase real estate at least 2 years from the date on which you obtained a permanent residence permit or a long-term EU resident’s residence permit, and the purchased real estate will become part of the joint property of you and your spouse,
- if you purchase real estate from a person from whom you could inherit by law (e.g. your mother or grandfather), and the seller has been the owner (perpetual usufructuary) of this real estate for at least 5 years,
- if you are a citizen (or entrepreneur) of a country that is a party to the Agreement on the European Economic Area (EEA) or the Swiss Confederation.The exemption for citizens from outside the EEA and the Swiss Confederation will not apply in the case of the intended purchase of property in the border zone and agricultural land with an area of more than 1 ha.
Frequently asked questions
How long will I have to wait for a permission to purchase a property from the date of submitting the application?
The issue of granting a permit for a foreigner to purchase real estate is usually a so-called ‘particularly complicated’ matter, which means that it takes two months to process. However, you should be aware that this time does not include periods when the Minister of Internal Affairs, who is examining your case, is awaiting a possible objection from the Minister of National Defence or the Minister responsible for rural development. In practice, you can expect to wait around five months for such a decision to be issued.
How much will I pay when applying for a permit to purchase real estate?
The stamp duty for issuing a permit to purchase real estate is PLN 1,570. Proof of payment of this fee (confirmation of a bank transfer) you should submit together with the application. Additionally, if you appoint a representative in your case, you should submit proof of payment of the stamp duty on the document granting the power of attorney, which is PLN 17.
What will happen if I purchase a property despite not having the required permit?
If you purchase a property without the required permit, the transaction will be deemed invalid. This means that it will have no legal effect and cannot be ‘remedied’, e.g. by obtaining the permit at a later date.
Do I need a permission to purchase a flat or garage?
You will not need a permission if you intend to purchase a so-called independent premises for your own housing needs (in other words – a flat). The same applies if you intend to purchase a garage and it is also related to your housing needs.
Julia Dolińska
radca prawny
Zdjęcie: Ian MacDonald