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Purchase of real estate by foreigners

 



'Foreigner' within the meaning of the Act
Cases where a permit is required
Issuance of permits to entrepreneurs from the European Economic Area (EU plus Iceland, Norway and Lichtenstein)
Obtaning a permit
Exceptions from the obligation to obtain a permit




Purchasing property by foreigners is governed by the provisions of the Act of 24 March 1920 on Purchase of Real Estate by Foreigners with further amendments.

'Foreigner' within the meaning of the Act is:

  • An individual who is not a Polish national
  • A corporate entity having a registered place of business abroad
  • A partnership of persons referred to above, which does not have a legal personality, has a registered place of business abroad and is incorporated under laws of foreign countries
  • A corporate entity which has a registered place of business in the Republic of Poland and is controlled directly or indirectly by persons or partnerships referred to above

The general rule is that foreigners require a permit from the Minister of Internal Affairs to buy real estate.

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Cases where a permit is required

A permit is required in each case of real estate purchase, i.e. acquisition of ownership title or perpetual usufruct right to real estate on the basis of a legal transaction.
The following require a permit:

  • Purchase of real estate
  • Purchase or taking up of shares in a commercial company which has a registered place of business in the Republic of Poland and is the legal owner or perpetual usufructuary of the real estate

A permit is required if, by purchasing shares in a company which is the legal owner or perpetual usufructuary of real estate, a foreigner will take control of that company, or if shares in an already-controlled company are acquired or taken up by a foreigner who is not the company's shareholder. A controlled company is a company in which a foreigner or foreigners holds or hold, directly or indirectly, more than 50% of votes at the meeting of partners or the general meeting of shareholders or has or have a dominating position within the meaning of the Code of Commercial Partnerships and Companies.

The Minister of Internal Affairs may grant the foreigner a permit to purchase real estate or shares in a company owning real estate if there is no probability of threat to national security, public safety or public order and if the foreigner can demonstrate the existence of circumstances confirming his ties with Poland.

The provisions of the Act do not apply to company transformations or transfer of ownership of real estate by intestate succession.

No legal acts or entries of ownership titles or perpetual usufruct rights may be made without a permit from the Minister of Internal Affairs. If special conditions are specified in the permit, evidence must be produced, in the form of official documents, that those conditions have been complied with.

If effected in breach of the provisions of the Act, the purchase of real estate or shares by a foreigner is null and void.

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Issuance of permits to entrepreneurs from the European Economic Area (EU plus Iceland, Norway and Lichtenstein)

On 1 May 2004, the general rule whereby a permit is required for purchase by foreigners of real estate or shares in companies which are legal owners or perpetual usufructuaries of real estate ceased to apply to nationals and entrepreneurs residing or established in the territory of the European Economic Area (EEA).

However, the Act provides for derogation in this respect. EEA nationals and entrepreneurs must obtain a permit in case:

  • To purchase agricultural and forest land - for 12 years after Poland became a member of the EU (i.e. until 2 May 2016).

However, EEA foreigners will not be required to obtain a permit during this transitory period in the following cases:

to purchase agricultural land situated in:

  • The following eight western and northern provinces: Dolno¶l±skie, Kujawsko-Pomorskie, Lubuskie, Opolskie, Pomorskie, Warmińsko-Mazurskie, Wielkopolskie, Zachodniopomorskie - after the end of the seven year period since the execution of a lease contract (date of execution must be certified), if during that period they have pursued farming in person on the land concerned and have legally resided in Poland,
  • The following eight central ane eastern provinces: Lubelskie, Łódzkie, Małopolskie, Mazowieckie, Podkarpackie, Podlaskie, ¦l±skie, ¦więtokrzyskie - after the end of the three year period since the execution of a lease contract (date of execution must be certified), if during that period they have pursued farming in person on the land concerned and have legally resided in Poland

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Obtaning a permit

Permits are issued by the Director of the Department of Permits and Licences of the Ministry of Internal Affairs on authorisation from the Minister of Internal Affairs. Permits are issued in the form of an administrative decision on the basis of a foreigner's application. The provisions of the Administrative Procedure Code apply to proceedings connected with the purchase of real estate.

A permit application for a permit should identify the applicant and his legal status; the real estate to be purchased; the seller; the legal form of real estate purchase, and should state the purpose of the property purchase.

A foreigner seeking to obtain a permit must enclose, along with the application, the documents supporting the circumstances indicated in the application and his/her ties with Poland as well as other documents demonstrating that the real estate will be purchased in a proper manner.

The application must be in Polish and all annexes in foreign languages must be translated into Polish by a certified translator.

The Minister of Internal Affairs should examine the application within two months provided that all documents required by law will be submitted with an application and that the authorities issuing opinions will take the position of a particular case in due time.

Authories issuing opinions are:

  • Minister of National Defence,
  • Minister of Agriculture and Rural Development - in the case of agricultural land,
  • Minister of the Environment - in the case of forest estates.

The permit is only a prerequisite for purchase and is not binding for the seller. The purchase of real estate must be executed in a notarised form.

The permit is valid for two years from the date of issue. A binding purchase agreement should be made and executed within that time limit.

A foreigner who intends to purchase real estate may seek a promise of permit issuance. An application for the permit promise, including its annexes, must comply with all the requirements applicable to a permit application.

The promise is valid for a year from the date of issue. The permit cannot be refused while the promise is valid, unless there have been changes in factual circumstances that are significant for the determination of the case.

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Exceptions from the obligation to obtain a permit
  • Purchase by a controlled corporate entity, for its statutory purposes, of undeveloped real estate in urban areas if their total area in the entire country does not exceed 4,000 m2
  • Purchase of independent residential premises
  • Purchase of real estate by a foreigner who has been residing in Poland for at least five years from the issuance of a permanent residence permit
  • Purchase by a foreigner whose spouse is a Polish national and who has resided in Poland for at least two years from the issuance of a permanent residence permit, of real estate that will become the joint property of both spouses
  • Purchase of real estate by a foreigner if, on the day of purchase, the foreigner is entitled to statutory succession after the assignor of the real estate, provided that the assignor was its legal owner or perpetual usufructuary for at least five years
  • Purchase of real estate by a foreign bank, which is a mortgagee, after an ineffective auction under enforcement proceedings
  • Acquisition or taking up by an indirectly or directly controlled bank of shares in a company which has a registered place of business in the Republic of Poland and is the legal owner or perpetual usufructuary of real estate in connection with enforcement of the bank's claims for banking services rendered

Exemption from the obligation to obtain a permit does not apply to real estate situated in the vicinity of state borders and agricultural land of more than 1 hectare.

To download the full English-language version of the Act please click here.


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Last update: November 2013


 
 

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