Innovative property investments
Investment property in Poland
Buying Guide
Buying Process
Buying assistance
The buying process can be carried out by appointing a local lawyer through an executed Power of Attorney (PoA).
The PoA and the mortgage document must both be translated by an official government translator.
Preliminary contract
There are two contracts involved in a property purchase in Poland.
A preliminary contract commits both parties to the sale, and is accompanied by a deposit of between 10 and 30%.
The preliminary contract sets a date for the signing of the final contract in the presence of a notary.
The notary will check the property title for undisclosed charges and ensure that the vendor has the right to sell.
Final contract
The final contract officially transfers the title of the property from the vendor to the buyer, and is signed by both parties before the notary.
The notary then logs the change of title at the property registry; be aware that this can take up to three months.
Costs
Expect to pay around 2.5 to 3.5% agent’s commission, notary fees, and court fees of 200 ZL.
Stamp duty is set at 2% of the property value, and you must also pay a property tax of 1.5%.
VAT on new-build property is currently at 7%, but this is due to rise to 22% from January 2008.
There is no VAT on property more than five years old.
Taxes
You must declare rent as income and pay income tax annually on a progressive scale of 19%, 30% and 40%.
You can also register for a flat tax of 19% (this does not allow for deductions).
Capital Gains Tax is not applicable if the property is sold after five years, or if a property is sold and the funds then immediately reinvested into another Polish property.
If you sell before five years are up, Capital Gains Tax is charged at a flat rate of 19%.
Mortgages
Mortgages are available up to 80% LTV with low interest rates, and for terms of up to 30 years.
Specific buy-to-let products are also available.
Buyers can borrow in different currencies and tend to avoid the zloty, which has risen more than 15% since foreigners were given the right to buy in 2004, adding a corresponding 15% to the value of the mortgage.
Loans in Swiss Francs currently have the lowest interest rate at 3.1%, rising to 5% for dollar loans.
Key facts
- Appoint a local lawyer through an executed Power of Attorney (PoA)
- Have both the PoA and the mortgage document translated by an official government translator
- A preliminary contract is accompanied by payment of a 10-30% deposit and sets a date for the signing of the final contract in the presence of a notary
- The notary checks the property title for undisclosed charges and ensures there is a right to sell
- The final contract transfers the title to the buyer and is logged in the property registry by the notary
- Allow an extra 2.5 to 3.5% to cover agent’s commission, notary fees, and court fees
- Stamp duty is set at 2% of the property value
- A property tax of 1.5% is liable
- VAT on new-build property is currently 7% but will rise to 22% from January 2008
- There is no VAT on property more than five years old
- You must declare rent as income and pay income tax annually
- Capital Gains Tax (CGT) is not applicable on property sold after five years or if the funds from the sale are immediately reinvested into another Polish property
- If you sell before five years are up, CGT is charged at a flat rate of 19%
- Mortgages with low interest rates are available up to 80% LTV for terms of up to 30 years; specific buy-to-let products are also available
- Buyers can borrow in different currencies and tend to avoid the zloty, which has risen more than 15% since 2004, adding 15% to the value of the mortgage
- Loans in Swiss Francs currently have the lowest interest rate at 3.1%
Downloadable Reports and Documents
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