If you’re an investor looking for a lucrative investment opportunity, buying land in Poland may be a wise decision. Poland’s real estate market has been consistently growing, and the demand for land has been increasing in recent years. However, buying land in a foreign country can be a complex process. In this guide, we’ll provide you with a comprehensive overview of the process of buying land in Poland, including the legal requirements, tax implications, and other important factors to consider. So if you decide to buy land in Poland – after reading this article you’ll be prepared for that.
Buying property in Poland
We will not discuss general rules on buying property, as we concentrated on that in another article: Buying property in Poland. We suggest you read that article before going on with this one. This article is meant to concentrate on helping those intending to buy land in Poland, land that can be built on, to be precise. It will be based on the experience that we gained during the last two years.
Why invest in land in Poland?
Poland is a rapidly developing country with a rich history and culture. In recent years, Poland’s real estate market has been growing at an impressive rate, making it an attractive location for international investors. Whether you’re looking to buy land for commercial development or residential purposes, this guide will help you navigate the process of buying land in Poland. There are several reasons why investing in land in Poland can be a smart decision. Firstly, Poland is one of the fastest-growing economies in Europe, with a stable political system and a favorable business environment. This has created a strong demand for land, particularly in urban areas. Additionally, land prices in Poland are generally lower than in other European countries, making it an attractive location for investors looking to enter the market at a lower cost.
Legal Requirements for buying land in Poland
Before you can purchase land in Poland, you need to be aware of the legal requirements for foreign investors. The following are some of the key factors to consider:
Notary Services
In Poland, all real estate transactions must be conducted in the presence of a notary. The notary is responsible for ensuring that the transaction is legal and that all parties have fulfilled their obligations.
Restrictions on Foreign Ownership
Foreigners from outside the EU buying land in Poland
Non-EU citizens can only purchase land if they have a permit from the Minister of Internal Affairs, which is granted on a case-by-case basis. Bear in mind, that if somehow you manage to buy land without the permit (the Notary however is not allowed to process this), the transaction is void, and you will have problems getting your money back.
Foreigners from the EU buying land in Poland
EU citizens do not need a permit, but there are restrictions on the amount of land they can own, which varies depending on the region.
Land Register
All land in Poland is registered in a central Land Register, which is maintained by the local district court. Before purchasing land, it’s important to check the Land Register to ensure that the seller has the legal right to sell the property. If you have the registry number for the land, you may check the registry here for free. The registry is the ultimate source of information about the land in Poland – if some right is not in the registry, it is not supposed to exist.
However, it is hard to find the registry number for any land plot, due to personal information protection. But you should ask the seller about it.
Finding the right property
We wrote about how to look for property to buy in this article. It also applies to looking for a building plot. Bt when it comes to land, it is also a good idea to go around the area you want to buy a piece of land. Often the owner put some ads on the property.
Also, most cities have some land plots and sell them in an auction. They usually announce it on their website and in the press.
Conducting Due Diligence
Before purchasing land in Poland, it’s important to conduct due diligence to ensure that the property is suitable for your needs and that there are no hidden issues. Some of the factors to consider include:
Although you usually buy plots with help of an estate agent, and it is supposed to be checked for you, it is often just the contrary. Make sure to visit the plot yourself or have someone do it for you. On-site, you will see what may be not seen in the pictures. Also, talk to your potential neighbors – building a house is a big adventure in Poland, and people are proud of it. They are keen to talk about problems they had and how they solved them. They also may give you information that you’re unlikely to find anywhere else.
Land Survey
It’s essential to conduct a land survey to determine the exact boundaries of the property and to identify any encroachments or disputes. Check, also on Geoportal, if the plot borders go along any existing fence. If part of the land was used by someone else for 25/30 years, it becomes hir property.
Drill into the ground
If all of those are OK, you should ask a geologist to drill into the ground – this will reveal if the plot is ready to build on it, if you need to replace the top layer. Replacing 2-3 meters of ground is acceptable, but if you need to replace more, it’s may make the plot useless.
Check utility network
Check if the utility network (water, gas, electricity, sewage) is as stated in the ad – you may check it on Geoportal website. Also, make sure that you can connect to the existing network – sometimes it needs extending – this needs a project, takes time, and costs money. Ideally, you should have the utility network on your land.
Zoning Regulations
Before purchasing land, it’s essential to understand the local zoning regulations to determine what types of developments are allowed in the area. Each area should have a development plan, which states what may be built – how high and big the building can be, how far from the land border, how many apartments, and sometimes even the shape of the building or the roof.
For areas that don’t have a development plan, you need to apply for individual specifications. Personally, I wouldn’t be brave enough to buy land in Poland that does not have a development plan – you risk that you won’t be allowed anything there.
Environmental Assessment
If you plan to develop the land, it’s important to conduct an environmental assessment to determine whether there are any contaminants or other issues that could affect the development. Check, if the land is not endangered by flooding, or if there are no plans to buy a highway nearby.
Need help in buying a plot of land in Poland?
If you found an ad for an interesting plot and you are thinking about buying land in Poland, we may help you.
Why you might be interested in our help if the ad is put up by a real estate agency?
A real estate agent, if professional, will be of great help. He should have checked the property, and if something goes wrong, he should be insured to compensate you for the loss. In fact, they often haven’t ever seen the plot they are advertising, and take photos from the seller or from Google. They also check nothing else than the registry.
Usually, their salary (3% of the price) is paid by the seller. But of course – the seller has already included that commission in the price. Contacting the seller directly may save you up to 3% of the property price.
If you contact the agent, he will take note of your name – after that, even if you contact the seller directly, he has to pay a commission if you buy from him within 1-3 years.
The agent earns only if you buy the property, so he has an interest in talking you into making an offer. We have no interest in that.
What can we do for you?
- If you don’t know exactly which plot it is in the ad, we’ll try to find it based on the information given. We will then try to find contact info to the owner
- If you provide us with the registry number, we’ll investigate the registry to see if there’s anything you should worry about.
- If you don’t know the registry number, we’ll try to find out what it is.
- We’ll check the whereabouts to see if there is anything that may influence the value of the plot
- We’ll check the information about new buildings/roads that were announced to be built in the nearest area
- We’ll check if the plot is equipped with utilities, and if it’s not, where the closest utilities you may use are.
- We’ll check the development plan for the plot and neighborhood, to see what may be built on the plot.
- If the plot is close to Gdansk, we will visit it to see if there is anything that is not mentioned in the ad. We will send you detailed pictures.
- We may check visually the quality of the ground to see if there are any obvious risks. We’ll ask the neighbours about their experience when they were constructing their houses
- We’ll verify all the data in the ad.
- We’ll check if there are any data of drills in the neighbourhood to make sure that it is safe to build here
- We will check anything else that you might need.
If you want us to help you, please contact us at exploregdansk@exploregdansk.info or via WhatsApp: +48 798 897 017. Also, check out our case study at the end of this article.
Financing your land purchase
If you’re unable to pay for the land purchase outright, you may need to finance the purchase. Some of the financing options available in Poland include:
Bank Loans
Polish banks offer loans for land purchases, but they typically require a substantial down payment and have strict eligibility requirements.
Mortgages
If you plan to develop the land, you may be able to obtain a mortgage for the purchase. However, mortgages in Poland typically require a higher down payment than other types of loans.
Tax on buying land in Poland
When purchasing land in Poland, it’s important to consider the tax implications. Some of the taxes you may need to pay include:
Property Tax
Property tax in Poland is based on the value of the property and is paid annually. The tax rate varies depending on the location and type of property.
Capital Gains Tax
If you sell the property for a profit, you’ll need to pay capital gains tax. The tax rate is 19%, but it can be reduced to zero if you’ve held the property for more than five years.
VAT
If you purchase land from a developer or a business, you may need to pay value-added tax (VAT) at a rate of 23%.
Closing the Deal
Once you’ve found the right property and secured financing, the next step is to close the deal. This typically involves signing a purchase agreement and paying a deposit. The notary will oversee the transaction and ensure that all legal requirements are met.
Case study on a building plot ad
Now, let’s look at and analyze an advertisement on Otodom website. We translated the page into English so that you could read it.
There is only one photo in the ad, and the plot is not marked in any way. However, there is some description available as well.
From the description we know, that the plot is located in Wierzbowa Street, and its surface accounts for 900 square meters.
From this, we know that this is plot 22/27, in the centre of the photo. What do we know about Radunica in general? It is a small rural village between Gdansk and Pruszcz Gdansk. Its elevation is about 0-1 meters above the sea level, which makes it vulnerable to sea level rise. It is also known for bad building conditions – the ground is very soft, and you my need to replace the ground layer even 4-5 meters deep to be able to built a house.
According to the ad, the area is quiet and peaceful. Is it? A quick look at Google Maps shows, that there are two car workshops just south of the plot. This may generate a lot of noise. Also, there is a railway track about 350 meters west, which is close enough to hear trains passing by (and the track is very active).
Getting to Gdansk by bus is convenient, as the bus stop is within walking distance. However, it’s important to note that if you’re traveling by car, you won’t be able to drive under the railway track – you’ll need to go around an extra 4 kilometers to reach Gdansk. Walking or biking under the railway track is possible, but not suitable for cars.
Also, the ad mentions a nearby school, just 15 minutes away on your way to Gdansk (sw Wojciech). Yes, there is a school, but in Poland, you cannot send children to a public school of your choice (unless it’s private school). And children from Radunica are supposed to learn in school in Wislina, a small village in opposite direction, with rare public transport available.
According to the ad, all the utilities are available. But if you look closer, you’ll see that although there is even a water pipe in the plot – it’s not the public network, but a private connection. You cannot use it to connect to water. There is also some telecommunication cable going through the plot. The closest utilities you may use are about 100 meters south. Bringing it to the plot would be very expensive.
And one more, very important thing. If you look at the map, you’ll see that there is a road going through the plot to the neighbour’s house. And that house is surrounded by other building plots – there is no other road connecting it. This means, if you buy this plot, your neighbour will need servitude to pass through your plot. We called the agent to ask about it, and she said that the plot would be split, and part of it would become a road to that house. The price of the plot will then be reduced.
But…the development plan for this area does not allow the building plot to be smaller than 900 meters – this will not be a building plot any more. What you’ll also not see in the picture, is that the plot is surrounded by high trees, which makes it shady – it’s hard to say whether the trees grow on this plot (you may cut them) or the neighbouring one.
This plot isn’t worth 240 000 PLN. And you should be careful about guarantees for the neighbour if you want to buy it.