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Conditions for real estate purchase
     by foreigners in Poland
 
 
 

          The Author:

               Teresa Kielar is an attorney with the firm of Realnosc in
               Krakow, Poland. She has more than 30 years experience in
               public economic matters. Her firm specializes in real estate,
               including representing foreigners purchasing property in
               Poland. She is a member of the Association of Real Estate
               Brokers in Middle Poland and has authored articles for the
               bulletin of that association and the Krakow Institute of Real
               Estate. She is a past president of the Regional Disciplinary
               Court for three provinces.

               E-mail: realnosc@kki.krakow.pl
               Web: www.kki.krakow.pl/realnosc/realang.htm
 
 
 

     By Teresa Kielar

    PURCHASING REAL ESTATE by foreigners on Republic of Poland territory is regulated by an act dated 24 March 1920 (final version of a statute: Journal of law from 1996, No. 54, position 245).

     According to the regulations of a.m. statute, the purchase of ownership
     or ground usufruct by a foreigner requires permission. Permission is
     issued by the Minister of Home Affairs by way of administrative
     decision.

     In the meaning of statute’s regulations, (art. 1, part paragraph 7) a
     foreigner is:

          a. a natural person not having Polish citizenship

          b. a legal person having a seat abroad

          c. a legal person having a seat in the territory of the Republic of
          Poland controlled directly or indirectly by the persons mentioned
          under a. and b.

     In the case of a commercial company, the company is considered to be
     controlled when persons mentioned under a. and b. have directly or
     indirectly at least 50% of initial capital.

     Within the statute’s control comes also the purchase or accession by
     the foreigner of shares and stock in a commercial company with the
     seat on the territory of the Republic of Poland being the owner or
     perpetual real estate user.

     WHO MUST OBTAIN PERMISSION?

     THE ACTIVITIES mentioned above require obtaining permission
     from the Minister of Home Affairs, if:

          a. as a result of purchasing or accession of shares or stock, the
          company becomes a company controlled in the meaning of
          statute’s regulations

          b. the company is controlled and the foreigner who is neither
          shareholder nor stockholder purchases shares or stock

     The foreigner intending to purchase real estate on territory of the
     Republic of Poland can also compete for issue of a promise of
     permission by the Minister of Home Affairs.

     This promise is valid for the period of 6 months from the date of its
     issue. During the period of the promise’s validity, you cannot be
     refused permission for the real estate purchase unless facts important
     for the settlement of the matter have been changed.

     Every transaction in which the foreigner purchases ownership or real
     estate perpetual usufruct which is undertaken in defiance of statute’s
     regulations, without the required permission, is unvalid!

     The statute, mentioned at the beginning, foresees also exceptions from
     the obligation of obtaining the permission.

     Its regulations are not used for purchasing the real estate on the way of
     succession by the persons entitled to statutory succession.

     WHO DOESN'T REQUIRE PERMISSION?

     THE FOLLOWING cases also don’t require obtaining permission:

          a. purchase of individual dwelling flat in the meaning of statute’s
          regulations dated 24 June 1994 about the ownership of flats
          (Journal of law No. 85, position 388)

          b. purchase of real estate by the foreigner living on the territory of
          the Republic of Poland for at least 5 years from the date of
          obtaining of card of permament stay

          c. purchase by the foreigner being the spouse of a Polish citizen
          living on the territory of the Republic of Poland for at least 2 years
          from the date of obtaining the card of permament stay, real estate
          which in result of purchase will make statutory joint property of
          husband and wife

          d. the purchase by the foreigner of real estate, if he on the day of
          purchase is entitled to statutory succession after alienator of real
          estate and the alienator or real estate is its owner or perpetual
          user for at least 5 years

          e. the purchase by a legal person having the seat on the territory
          of Poland controlled by a foreign party, for its statutes’ purposes
          the unimproved properties the total surface of which on the
          territory of all the country does not exceed 0,4 hectares on the
          area of cities.

     However, above exemptions from use of statute’s regulations from the
     date 24 March 1920 about purchasing of real estate by foreigners are
     not used for real estate in the frontier zone and to farmland with the
     surface exceeding 1 hectare.
 

                        Web Law Review, Summer 1997
                             Text © 1997, Teresa Kielar
                           Web Package © 1997, EagleLink
                                 Reprinted with permission of author