Buying costs are low in Poland
Taxation Researcher | September 24, 2019
How high are realtors´ and lawyers´ fees in Poland? What about other property purchase costs?
|Value Added Tax (VAT)||23%||buyer|
|Real Estate Agent Fee||3%||buyer|
|Tax on Civil Transactions||2%||buyer|
|Notary Fee||0.25% - 3%||buyer|
|Total cost paid by the buyer||5.35% - 8.10%|
|Total round-trip costs:||5.35% - 8.10%|
| See Footnotes
Source: Global Property Guide
Value Added Tax (VAT)
VAT is levied at a flat rate of 23% as of 01 January 2011. Land sales are subject to 23% VAT.
How difficult is the property purchase process in Poland?
Foreigners can freely buy condominium units in Poland. Land for commercial purposes can be freely bought by citizens of the European Economic Area (EU + Iceland, Liechtenstein, and Norway).
EEA citizens, however, require a Ministry of Internal Affairs and Administration (MIA) permit to buy land for housing and recreation, which is not intended to be the foreigner´s place of permanent residence, and the land bought for permanent residence may not exceed 0.50 hectares .
Non-EEA citizens need MIA permits to buy any kind of land, residential or commercial. The MIA permit will only be issued if the foreigner can prove that he has links with Poland - temporary or permanent residence in Poland, among other things.
Foreigners, both legal entities and individuals, can freely lease land or real estate, without restrictions. Any lease for a period of more than a year should be executed in writing .
Property negotiation is done openly in Poland. The price can be negotiated directly with the owners (a common practice) or through the estate agent. Once the parties have reached an agreement, the contract for the purchase of real estate must be made in the form of a notarial deed executed by a Polish notary. A contract in any other form is null and void. It is advisable to appoint an English-speaking notary, or at the very least to engage the services of a translator since all sales documents will be written in Polish.
The notary will draw up an ´initial contract´, which outlines the details and any conditions that must be satisfied before the sale completes. At this time, a completion date is set and a 20% deposit is paid by the buyer. The notary then carries out the necessary checks or searches. When all is in order, the balance of the purchase price must be paid and the vendor must present a document stating that there are no loans secured on the house at the final contract meeting.
Registration of real estate purchase usually takes 33 days.
Footnotes to Transaction Costs Table
The round trip transaction costs include all costs of buying and then re-selling a property - lawyers´ fees, notaries´ fees, registration fees, taxes, agents´ fees, etc.
Real Estate Commission:
For the purchase of a residential apartment, most agents will apply 3% commission. However, agent fees are negotiable for larger purchases (such as a building).
Civil Transaction Tax:
Civil transaction tax (CTT) of 2% is paid on transfer of second-hand buildings and land. Properties under CTT are VAT-exempt.
Notary fees are capped at PLN10,000 (€2,222). Notary fees are calculated on the value of the transaction based on the following schedule:
|PURCHASE PRICE, PLN (€)||FEES|
|Up to 3,000 (€667)||PLN100 (€22)|
|3,000 - 10,000 (€2,222)||3%|
|10,000 - 30,000 (€6,667)||2%|
|30,000 - 60,000 (€13,333)||1%|
|60,000 - 1,000,000 (€222,222)||0.40%|
|1,000,000 - 2,000,000 (€444,444)||0.20%|
|Over 2,000,000 (€444,444)||0.25%|