Sell
Your Krakow Property and Get Rich
No
doubt housing is now a seller’s market in Krakow. Notably
the demand for apartments has vastly outpaced supply in recent
years. Seeing as prices of new flats zoomed up, on an average,
by seventy percent in 2006 alone, it’s little wonder that
many owners of residential property think anything goes. Wrong
as they are, the fact remains that selling an apartment in
Krakow is fairly easy these days.
Also
there is the big demand for houses, and even bigger for
advantageously situated building plots.
As
regards the Krakow market for commercial
property, nothing
beats restaurants in the
Old Town and
Kazimierz historic
districts as appetites of would-be restaurateurs for floor
space there seems insatiable. Except, prices of retail space
at the Old Town’s main streets and the central Rynek Glowny
are really exorbitant.
How
to sell real estate in Krakow
Potential
seller of a real property may try to market it through
classified advertisements in local newspapers. But it requires
fairly good command of the Polish language, some knowledge of
the Polish law, and usually a good deal of time.
On
the other hand, one may employ Krakow’s real estate
agents.
Especially that some of them speak English. Plus a seller’s
market of today means the realtor’s fee is paid, more often
than not, by the buyer. Even as many estate agents in Krakow
insist on exclusivity (it’s always advisable to read the
small print in their contracts), prospect sellers mostly field
their property for sale with several different realtors unless
one of them may offer preferential treatment.
Legalities
A
licensed real estate agent should take care of all legal
matters. Anyway, the transaction needs to be completed with
the help of the local notary public; otherwise the contract is
null and void. The notary’s office retains the deed (called
akt notarialny) for safekeeping while the buyer and the seller
are issued certified copies of the document.
Plus
the public notary looks after entering changes into the land
registry (ksiegi wieczyste).
Costs
involved in selling property in Krakow
The
notary’s fee is calculated on the worth of transaction. For
instance when the property is priced at anything between
60,000 zlotys (PLN) and one million zlotys (PLN) the fee
totals PLN 1,010 plus 0.5 percent of the amount above 60,000
PLN. Thus selling an apartment worth 150,000 PLN entails
notary’s fee to the tune of 1,460 PLN. What’s more, the
fee is subject to 22-percent Value Added Tax (VAT) so the
notary would charge 1,781.2 PLN for the said flat. Separately
he charges 200 PLN plus 44 PLN (i.e. 22 percent) of Value
Added Tax for preparing the application to enter changes into
the land register.
The
notary also collects the two-percent stamp duty (podatek od
czynnoœci cywilnoprawnych) slapped on the value of the sold
property and 200 PLN that the district court charges for an
entry in the land register.
The
law doesn’t specify which party pays the above costs. They
may be covered by the buyer or the seller or both can share
them. On the strength of the seller’s market the buyer
customarily foots the entire bill.
As
a rule of thumb, the above applies also to the commissions of
real estate agents that range from two to three percent.
Don’t
Forget the Tax
The
proceeds from selling property in Krakow are subject to
Poland’s income tax. It applies both to the Polish nationals
and aliens, no matter if they are legal residents or not. The
tax is different when one sells a real estate purchased in
2007 or later than in the case of property obtained before
January 1, 2007. The income tax should be paid within 14 days
after the date of the deed. An exception is residential
property owned for at least five full calendar years, i.e.
from January 1 to December 31, as income from its sale remains
free of tax. For instance, the sale of a real estate purchased
in 2007 will be exempt from the income tax if it will take
place in 2013 or later.
When
you sell a real estate purchased before January 1, 2007 the
entire proceeds are taxed at 10 percent. The 10-percent income
tax is being waived when the taxpayer declares within 14 days
that the proceeds from the sale will finance another home
ownership or home improvement in two years or earlier or
he/she has used the money to repay mortgage.
When
you sell property acquired in 2007 or later only the profit,
i.e. the difference between the purchase price and the sale
price less the costs of the transaction (see above), is taxed
at 19 percent. Except the income from the sale of the official
permanent abode (zameldowanie na pobyt staly) for at least 12
preceding months is exempt from the tax.
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