How can a foreigner purchase real estate in Poland?

As a general rule, the purchase of real estate in Poland by a foreigner requires a permit from the Minister of Internal Affairs and Administration. How to obtain such a permit?

It will be necessary to make an formal motion. At the outset, it should be pointed that there are no ready-made designs of the motion – it should be constructed in accordance with current legislation. Simplifying, it can be said that a correctly prepared motion should include: the applicant’s designation; the designation of the property being purchased; the seller’s designation; the type of legal event on the basis of which the property will be purchased; the purpose of the property acquisition and the source of funds for the purchase of the property. Issuing the motion requires payment of a fee of PLN 1.570 PLN (approx.  EUR 360). In addition, two important conditions must be met:

• the acquisition of real estate by a foreigner cannot result in a threat to defence, state security or public order, and the social policy and health of the society do not oppose it;
• the circumstances confirming ties with the Republic of Poland must be proved (e.g. Polish origin, marriage to a Polish citizen)

The application should be accompanied by additional documents, such as: confirmation of the foreigner’s ties with Poland, a copy of identity card, documents concerning the purchased real estate, a statement of the seller including the will to sell the real estate to the foreigner and a number of other documents in the case if a foreigner is a company. Any documents in a language other than Polish must be submitted together with a sworn translation.

On the basis of the application submitted in the described form, the Minister of Internal Affairs and Administration grants a permit for the purchase of real estate. The waiting period for the permit is about one month, which may be extended to two months in complicated cases. It should be noted here that the notion of acquisition of real estate refers to any legal event resulting in the transfer of the ownership right to real estate. Of course, the whole procedure has been described in a simplified way and does not include additional restrictions and exemptions, which are described below.

What happens if I purchase a property without the required permission? Such an acquisition is invalid, but in any case it is decided by a court on the application of the entitled entity.

It is also possible to apply for a promise (promise to issue a permit). An application for such a promise must be submitted together with the documents described above (as in the case of issuing a permit) and a stamp duty of PLN 98 must be paid. The promise is limited by the term of validity (1 year) and specifies the conditions to be met to obtain a permit. An important promise is that the ministry cannot refuse to grant consent if the conditions specified in the promise are met.

Moving on, the concept of foreigner should be clearly defined. It follows From the legislation regulating this issue, it follows that a foreigner is non-Polish citizen. While in the case of natural persons this raises no doubts, the situation of other entities requires additional explanation, as the legislation recognizes other entities as foreigners:

• a legal person having its registered office abroad;
• an unincorporated company with its registered office abroad, established in accordance with the regulations of foreign countries, composed of natural persons without Polish citizenship or legal persons with its registered office abroad;
• a legal person and a commercial company without legal personality, having its registered office in the territory of the Republic of Poland but controlled directly or indirectly by the above-mentioned persons or companies.

Such a definition of a foreigner makes it possible to assume that in the case of persons with dual citizenship, i.e. Polish and another country, they will not be recognised as a foreigner, and therefore no consent for the acquisition of real estate will be required. In the event of renunciation of citizenship – it does not affect the previous acquisition of real estate. In the case of unincorporated companies with their registered office abroad, it should be assumed that they will not be recognized as foreigners if the partners are natural persons of Polish citizenship (or dual citizenship). The concept of direct and indirect control in the case of legal persons and partnerships without legal personality needs to be filled in with a few words A company controlled by foreigners is considered in two situations: when a foreigner holds directly or indirectly more than 50% of votes at a general meeting or a free meeting and when a foreigner holds a dominant position within the meaning of the Code of Commercial Companies and Partnerships. Each case requires an analysis of internal relations in the company, whether a given entity will certainly be qualified as a foreigner.

Therefore, as it can be seen, the analysis of the notion of a foreigner may result in the conclusion that the issuance of a permit will not be necessary in every case. It should be added here that citizens of the European Union, Iceland, Liechtenstein, Norway and Switzerland are also excluded from this concept, which results from the fact that they belong to the European Economic Area.

More far-reaching exemptions apply mainly to the purpose of the purchased premises. No permit will be required in the case of acquisition of an independent dwelling unit; an independent utility unit for a garage; a real estate by a foreigner residing in Poland for at least 5 years after granting a permanent residence permit or by a foreigner married to a Polish citizen, but residing in Poland for at least 2 years. The consent will also not be required in the case of inheritance by a foreigner if the seller of the real estate has been the owner of the real estate for at least 5 years. Apart from further exemptions, the legislation also contains significant restrictions, which mainly concern real estate located in the border zone and agricultural land with an area exceeding 1 hectare.

Each case requires a separate analysis of the circumstances as to whether the consent for the purchase of real estate is necessary. It may turn out that one of the statutory exemptions will apply, or the entity seeking to acquire real estate is not considered a foreigner. This will certainly result in savings of time and expenses, however, in case of the need to obtain such a permit it is worth to use the assistance of a professional lawyer, who will help to collect the necessary documents and effectively submit an application.