International Property investors are now looking towards Poland as a place to invest . Poland is attracting attention for a whole host of reasons Poland or Polska has a population of just under 40 million and can be viewed as an emerging economy with great potential. With European Union accession granted in May 2004 Poland is well position between Eastern and Western Europe to capitalize on the expanding EU trade.
In summary overseas buyers are attracted to the following
• Large market of almost 40 million consumers
• Low unemployment in capital cities
• Its location between emerging eastern countries and the capitalized west
• Properties sold after 5 years or monies re-invested into property have no capital gains tax
• VAT is not applied to properties over 5 years old
• Strong GP and FDI growth
So how does an overseas buyer buy property in Poland? The buying process in Poland is a little different than in most other countries, so it is important to understand it before jumping in. EU and European Economic Area citizens may buy property in Poland fairly easily, but residents of other countries must first obtain permission from the Polish Ministry of Interior and Administration. There are some situations in which EEA citizens must obtain permission, such as for certain second homes – not their primary residence – and some agricultural lands. Check with an agent or lawyer to make sure if you need to acquire permission before proceeding to buy.
A buyer may use the services of an estate agent when buying existing property in Poland, and this person can do much of the legwork involved. Because the agent works for the buyer, the buyer pays any commission to the agent. It is not customary to use a lawyer, but as a foreigner it is always a good idea to have one review the paperwork, and apply for a permit if necessary, to make sure everything is okay.
Once you have found a property you wish to purchase, price negotiation is usually done face to face with the seller. After agreeing upon a price, a notary will draw up the initial contract. This sets out the terms and any conditions, and a 20% deposit is paid. The notary typically serves as the legal authority, carrying out any property checks and searches.
Once everything is okay according to the notary – and with your lawyer, if you have one – then the final contract is written up and signed in front of the notary. The buyer makes the final payment and the seller must present a letter or document stating that there are no outstanding loans or debts on the property. This is very important, and it should be dated the day of sale. There is a civil transaction tax that must be paid, typically 2% of the sale price, at the time of sale. Once everything is complete, you may register the property with the Land Registry.