Buying real property in Krakow

What a would-be property owner in Krakow should know.

Besides the full ownership of real property, wlasnosc hipoteczna in Polish, fairly common in Poland are also the perpetual lease or dzierzawa wieczysta (usually of municipal lands) and a limited ownership of flats within housing cooperatives. While all of them are transferable it’s advisable to seek full ownership when shopping either for land or a house or an apartment. Joint property, too, has its obvious shortcomings as it entails joint and several responsibility and demands consensus in decision-making.

Land register, ksiegi wieczyste in Polish, is an indispensable tool to any would-be Krakow landlord, providing such crucial information about real estates as names of their actual owners, mortgages, restrictions, etc. Land registry constitutes a department of the district court.

How to buy property legally in Krakow.

It’s most important to remember that in the case of purchasing real estates in Poland the deal need to be completed at a local notary public because otherwise any such transaction is null and void. Also, the notary collects the deed tax (stamp duty) when applicable and the court fee for an entry in the land register in addition to his/her remuneration. Plus he/she is responsible for placing the correct entry in the land register.

Citizens of the European Union, Island, Norway and Liechtenstein may freely purchase and own any real estate in Poland other than farmland and forests, though in the case of residential property they should pledge to make it their fixed abode. Other aliens can buy apartments or plots up to 0.4 hectare (i.e. about an acre) in urban areas with the same intent to take up residence. Otherwise the purchase of real estate by a foreigner requires a permit from the Interior Ministry (Ministerstwo Spraw Wewnetrznych), usually easily achievable. The above applies both to individuals and to companies whenever foreigners have the controlling interest.

Significance of real estate agents.

In Poland people often bypass real estate agents and sell property directly through classified ads, usually those published in local newspapers, though the Internet is an increasingly popular alternative. At the same time expert services of a diligent realtor seem most useful to somebody foreign to the country, its legal niceties, and the ways of the natives.

It’s advisable to employ only the licensed estate agents, since they alone under the Polish law may act legally as middlemen in the business of selling and buying real property. To obtain the license they need to pass state examination and they may lose it through malpractice.

When you buy brand-new property from a developer.

Value Added Tax (VAT) on newly built property is currently 7 percent (Poland’s EU accession treaty stipulates that its rate will soar to 22 percent on January 1, 2008). Additional costs are the fee of the notary public called “taksa notarialna” complete with the 22-percent VAT on it and the land-registry fee.

New residential property in Krakow often sells in the early stages of development with the legal transfer of the ownership postponed till the completion.

When you buy a second-hand real estate through an estate agent.

Realtors charge the buyers commissions from two percent (seldom) to three percent (usually) of the sale price and their fee incurs the 22-percent VAT tax. Also the two-percent stamp duty called “podatek od czynnosci cywilnoprawnych” as well as the fee of the notary public (taksa notarialna) with the 22-percent VAT on it and the court fee for an entry in the land register – all traditionally fall on the buyer.

For instance, on the purchase of real property worth million zlotys (see more about the Polish currency) one should expect to pay a stamp duty of 20,000 zlotys, notary’s fee to the tune of 5,800 zlotys plus 1,276 zlotys VAT tax, another 200 zlotys for the entry in the land register, and the commission of the estate agent amounting to 30,000 zlotys plus 6,600 zlotys VAT.

Guide to real property in Krakow

Krakow's Real Estate

List of Krakow's Real Estate Agents

How to sell real estate in Krakow

Commercial property in Krakow

Residential property in Krakow: flats, condos, and houses

Investing in Krakow

Taxes in Poland

Business in Krakow