Guide to Buying Property in Poland
Overview
The Polish Property Market
Being one of the first countries in the Soviet bloc to toss off the Communist yolk,
Poland was well on the road to a more liberal economy with more participation by
foreign nationals than other Eastern European nations were when the Iron Curtain
fully collapsed. Foreign nationals have been investing in many segments of the Polish
economy, including purchasing real estate of different types in the country.
Many foreign nationals have realized significant profits through the years by investing
in real estate in Poland. Indeed, the
buying and selling of property in Poland
over the course of the past two decades has been brisk. Most industry experts who
are watching the real estate market in the Polish Republic now believe that the
buying and selling of real estate in Poland by foreign nationals will increase even
more over the course of the coming decade. This will include activity by foreign
nationals in the commercial, industrial and residential real estate markets in Poland
Investment Property in Poland
As just mentioned, foreign nationals have been very active in the
Polish real estate market for the past two decades. One area in which foreign
nationals have been fairly heavily involved is in investment real estate.
Since the Communist government in Poland was ousted, the government of Poland has
been active in its efforts to bring foreign investment into that country. As a consequence,
the government has encouraged foreign nationals to put their money into everything
from commercial real estate enterprises such as office buildings, apartment complexes
and other residential developments and even in the construction of industrial properties
in some of the major urban centers in the country. The trend towards the involvement
of foreign nationals in the Polish investment real estate market is expected to
continue onward unabated according to analysts considering the economy and
property market in Poland.
Residential Real Estate in Poland - Single Family Properties
Trade by foreign nationals in single family residential homes has been somewhat limited
in the past couple of decades. While foreign nationals have been found buying single
family homes in Poland, the
demand by foreign nationals for single family dwellings has not been the most active
part of the real estate market as far as foreigners are concerned.
With that said, there have been some foreign nationals who have family roots in
Poland who have taken to buying a second residence within the country. Many of these
people are men and women who had parents or grandparents driven from the country
during the Second World War or during the period of time that Poland was part and
parcel of the Soviet bloc.
There are many interesting and historic residential properties in some of the smaller
and more rural communities in Poland. Some foreign nationals have taken to purchasing
these properties. These residences do provide solid retreats from the workaday world
and have been sought after by more well heeled foreign nationals who enjoy the challenge
of renovating and remodeling real estate.
Some people from foreign countries have taken to buying these larger residences
in rural locales and have turned them into inns which are being visited by foreign
nationals on holiday. These types of inns are sprouting up across the country and
are attracting more tourists into the country each and every year. In addition,
this type of real estate investment has proven to be very profitable for foreign
nationals.
Residential Real Estate in Poland - Apartments
The residential real estate market in Poland,
when it comes to apartments and foreign nationals, has done brisk business in the
past twenty years. Foreign nationals have been found snatching up apartments --
primarily in Polish urban centers and resort venues -- for three primary reasons.
First of all, with the Communists out and a more open, democratic government in
place, many foreign nationals have come to Poland to do business. Many of these
foreign nationals have found themselves within Poland on business for an extended
period of time -- and have found themselves making repeated visits into the Republic
of Poland. In this regard, these business people have found it economical to invest
in an apartment for their personal residence for the time they are present in the
country on business.
Second, a notable number of men and women from foreign countries have purchased
apartments in Poland including resort
communities. While the drive to purchase vacation or holiday property has been a
bit slow in Poland -- which will be discussed a bit more shortly -- there are a
growing number of people from foreign nations who have taken to purchasing an apartment in Poland
for holiday or second home purposes.
Finally, there are foreign nationals who have purchased
Warsaw apartments in Poland to be leased or rented to other people, primarily
other foreign nationals. These people, these foreign nationals who have purchased
apartments for investment purposes, have done so to serve both people coming to
Poland on holiday and people coming to Poland on business. By leasing apartments
to business and holiday visitors, these particular foreign nationals have been able
to generate a good income through the years through this type of apartment investment.
Holiday Property in Poland
For the first decade in which Poland was independent of the Soviet bloc, tourism
into the country was not a booming business. However, as time has gone forward,
more and more foreign nationals are making Poland a holiday destination.
As a consequence, more foreign nationals each year have purchased holiday or vacation
properties -- primarily in the form of apartments, but a growing number of free
standing residences as well. Most real estate industry analysts predict that the
number of foreign nationals who choose to purchase second home or
holiday property in Poland will increase over the course of the coming decade.
Most of these experts anticipate that the biggest thrust will be in the purchase
of apartments in resort communities in Poland. The experts maintain that these foreign
nationals generally will be from European Union nations. There has been an increase
in foreign nationals from non-EU countries who also have found themselves attracted
to resort real estate in Poland at this point in time.
Mortgage in Poland
When considering the options for a
mortgage on your overseas property there are a couple of choices to consider:
- Do you consider raising finance on your existing property in the UK to cover the
whole cost of your purchase abroad? A good idea if the interest rate in the country
in question is a lot higher than it is here in the UK as you will pay a lot less
in monthly repayments.
- Do you secure a mortgage against the property from a local bank in the country of
purchase? This can be a wise option especially if the interest rate is lower than
our current UK interest rate. Most overseas mortgage / bank lenders will require
upto 30% deposit on mortgages. However, you will need to give some thought to how
you will service your mortgage payments each month especially if you are not living
or earning in that country as you may well lose out on exchanging money each time
to cover monthly expenses. Check out our
Foreign Currency page to see how you can save money in this example
- Some Builders and developers may well offer their own mortgage facilities on their
properties for sale. This can be beneficial to both parties depending on the logistics
of the mortgage or loan facility. Always check and compare with the two options
above before making your final descision.
For more details on Mortgages in
Poland visit our Mortgage page in the Poland section.
Specific steps to Buying Real Estate Property in Poland
A foreign national is permitted to purchase and own real estate in Poland. With that
said, a foreign national must obtain the permission of the Ministry of Home Affairs
of the Republic of Poland in advance of purchasing real estate in that country.
The application process before the Ministry of Home Affairs is not a particularly
complicated process. Indeed, there are lawyers in the country that specialize specifically
in this application process due to the growing number of foreign nationals who are
buying real estate in Poland.
A company in Poland that has over 50% foreign ownership must also obtain permission
from the Ministry of Home Affairs before that company can purchase real estate in
Poland. Again, the application process for a company is not particularly complicated.
There are some restrictions geographically as to where a foreign national actually
can purchase real estate in Poland. The Polish government restricts the ownership
of real estate on the so-called Polish frontier. It is important for a foreign national
to make certain that the locale in which he or she intends to purchase real estate
in Poland is not within one or another of these restricted zones.
Approval from the Ministry of Home Affairs to purchase
real estate in Poland generally is good for a period of six months. A person
can apply for an extension when the initial period expires.
Once permission to purchase real estate is obtained from the Ministry, a buyer of
real estate makes an offer to a seller, which will then be memorialized in a preliminary
contract or agreement for sale.
Following the signing of this initial contract, the buyer is given a specified period
of time to obtain financing. Additionally, the seller is obliged to make certain
that the title to the real estate is clear and capable to being conveyed to the
buyer during this time period.
In most instances, the buyer is required to post a deposit at the time this initial
agreement is executed between the parties. More often than not, the deposit is in
the amount of 10 to 15%.
The real estate purchasing process comes to an end when the parties execute the
final agreement for sale and conveyance of the real estate. A new title is prepared,
placing the real estate in the name of the buyer. The title is then filed with the
government.
Once again, a foreign national does need to keep in mind that prior permission of
the Ministry of Home Affairs is required before a foreign national can purchase
real estate in that country. It is vital to keep in mind that if permission is not
obtained by the Ministry in advance of the purchase of real estate, the transaction
will be voided and the purchaser will lose his or her interest in real estate --
and his or her money as well
Property Abroad always recommends using a
Solicitor or Lawyer
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Further Reading on Poland