Over the past decade, Poland has ceased to be a country with a homogeneous society, as it had been since the end of World War II. This change has been largely influenced by mass migration, initially motivated by work. Currently, many foreigners from various parts of the world are gradually establishing their roots in Poland. Often, this process is accompanied by a desire to purchase real estate. However, what does the acquisition of real estate by foreigners in Poland look like from a legal perspective?
Who is considered a foreigner?
The acquisition of real estate by foreigners is regulated by the Act of March 24, 1920, on the Acquisition of Real Estate by Foreigners. Interestingly, this is the oldest law still in force in Poland, although it has been amended multiple times since its enactment.
To understand how the acquisition of real estate by foreigners works, it’s important to answer the question of who is considered a foreigner under Polish law. According to the aforementioned law, a foreigner is:
- A natural person without Polish citizenship;
- A legal person with its registered office abroad;
- A partnership of natural or legal persons without legal personality, established under foreign law and having its registered office abroad;
- A legal person and a commercial partnership without legal personality with its registered office in the territory of the Republic of Poland, directly or indirectly controlled by persons or entities mentioned in the previous points.
Therefore, foreigners are individuals without Polish citizenship and entities with their registered office abroad, or controlled by such entities.
Differentiation based on origin
The provisions of the law on the acquisition of real estate by foreigners strongly differentiate the acquisition of real estate by foreigners depending on the character and location of the property, as well as the foreigner’s legal status from the perspective of Polish law.
The fundamental aspect that differentiates what options and obligations a foreigner may have in relation to purchasing real estate in Poland is determined by their citizenship or registered office. As a general rule, the legal situation of entities, including citizens of other European Union countries, the European Economic Area, which includes Norway, Iceland, and Liechtenstein, as well as entities from Switzerland, is identical to that of Polish entities. This means that they can freely purchase any real estate after fulfilling the same requirements and obligations as Polish citizens.
However, the situation for entities from other parts of the world is somewhat more limited, which means they may not be able to purchase real estate in Poland as freely. Nonetheless, this doesn’t imply that acquiring real estate by foreigners is impossible.
Permission for real estate acquisition
For most countries outside the EU, EEA, and Switzerland, foreigners need to obtain the appropriate permit to purchase real estate in Poland. This permission is granted through an administrative decision issued by the Minister responsible for internal affairs, provided that the Minister of National Defense does not object. In the case of agricultural land, the Minister responsible for rural development must also not object.
When is permission not required?
However, the law includes several scenarios where a foreigner doesn’t need permission to acquire real estate. According to the law, permission is not necessary when a foreigner acquires:
- An independent residential unit, consisting of living and auxiliary rooms such as a kitchen or bathroom. The residential unit may also include an attic and basement, even if they are not physically connected;
- A garage;
- Real estate when the foreigner has been in Poland for at least 5 years since obtaining a permanent residence or long-term resident EU status;
- Real estate acquired by a foreigner in a marital relationship with a Polish citizen, which becomes part of the marital community of property;
- Real estate inherited from a person who owned it for at least 5 years before;
- Real estate, if the foreigner is a bank and acquires the property as a mortgage creditor through an unsuccessful auction in an enforcement proceeding.
Regardless of the aforementioned exceptions, purchasing real estate by foreigners from outside the EU, EEA, and Switzerland always requires permission if it concerns property in the border zone.
The border zone includes the entire area of municipalities adjacent to the state border, and in the maritime sector, it extends to the sea coast. If the width of the border zone does not reach 15 km, the adjacent municipalities without direct access to the state border are also included in the border zone. In the case of real estate in the border zone, a foreigner must always obtain permission to purchase.
This means, for example, that a foreigner will always need the Minister’s consent if they want to buy property in Gdańsk or Zakopane.
Acquisition of agricultural land by a foreigner
The acquisition of agricultural land with an area of at least 1 hectare also always requires a foreigner to obtain permission for acquisition.
This restriction applies to agricultural land already owned by the foreigner. This means that if a foreigner already owns agricultural land in Poland, for example, with an area of 0.5 hectares, and then inherits agricultural land with an area of 0.75 hectares, they will not be able to exclude the requirement of obtaining permission. In order to inherit such property effectively, they must obtain the relevant permit in advance.
Acquisition through takeover
A specific type of acquisition of real estate by a foreigner may occur when an entity that previously owned real estate in Poland and wasn’t foreign begins to meet the definition of a foreigner due to changes, primarily when a Polish entity, such as a commercial partnership, is taken over by foreign capital.
The provisions of the aforementioned law also envisage the requirement for a foreigner to obtain permission to acquire real estate in such a situation, which in practice also constitutes consent to the acquisition of the Polish entity.
What conditions must be met to obtain permission?
A foreigner can obtain permission to acquire real estate if they fulfill and prove the conditions justifying the issuance of such permission.
A foreigner is entitled to obtain permission to purchase real estate if:
- The acquisition of real estate by them will not jeopardize the defense, security of the state, or public order;
- The purchase will not be contrary to social policy and public health;
- The foreigner demonstrates circumstances confirming their ties to Poland.
In general, these conditions should not pose a significant obstacle to obtaining permission.
How to prove ties to Poland?
The law does not specify a closed catalog of criteria that would determine ties to Poland. Therefore, to obtain permission from a foreigner to purchase real estate in Poland, they must simply demonstrate any relationship with Poland that justifies their desire to purchase property. In the case of foreign individuals, one such criterion could be, for example, their work and residence in Poland.
However, the law provides an illustrative list of circumstances that may demonstrate ties to Poland:
- Possession of Polish nationality or Polish descent;
- Marriage to a Polish citizen;
- Possession of a permanent, temporary, or long-term EU resident permit;
- Membership in the management of companies with registered offices in Poland;
- Engaging in business or agricultural activities in Poland in accordance with Polish law.
As mentioned earlier, this list is illustrative and open-ended, meaning that foreigners who do not meet any of the above circumstances but demonstrate other ties to Poland can also obtain permission to purchase real estate.
For instance, according to the provisions of the law, citizens of Ukraine who are residing in Poland based on provisions for aiding citizens of Ukraine due to the armed conflict in that country seem to be entitled to obtain permission to purchase real estate in Poland.
What should be included in the application for permission to purchase real estate?
An application for permission to purchase real estate in Poland by a foreigner must be prepared on official forms. Such forms are available for download on the websites in the gov.pl domain as well as in the offices.
The application should include:
- Identification of the applicant and their legal status;
- Identification of the property being acquired;
- Identification of the seller;
- Determination of the legal form of the real estate acquisition;
- Information about the purpose and possibility of acquiring the property.
In addition, the application must be accompanied by several documents confirming the circumstances indicated in its content. These documents include:
- An identity document if the foreigner is a natural person;
- An excerpt from the National Court Register if the buyer is a legal person registered in Poland;
- An excerpt from the foreign register if the buyer is a legal person not registered in Poland;
- An excerpt from the land and mortgage register for the property that the foreigner is seeking to acquire;
- An excerpt from the land register and a map extract from the land registry for the property;
- Documents confirming the basis for changing the designation of the real estate;
- An excerpt from the local spatial development plan, or a decision on the location of a public purpose investment, or a decision on building conditions, if issued. In the absence of a local spatial development plan, a document issued by the competent authority certifying the absence of a plan should be provided;
- A statement from the seller expressing the intention to sell the property to the foreigner;
- A decision determining the location of a public purpose investment;
- A decision on building conditions or a decision on the location of a public purpose investment;
- Documents confirming the foreigner’s ties to Poland;
- A certificate of no outstanding ZUS contributions;
- Proof of payment of the administrative fee;
- Documents confirming the source of financial means for purchasing the property.
These documents can be submitted either in the original or as certified true copies. This certification can be performed by a notary, as well as, for the represented persons, by a lawyer or legal advisor.
The documents attached to the application should not be older than 3 or, in some cases, 6 months.
Promise to purchase real estate
A foreigner can apply not only for permission to purchase real estate but also for a “promesa,” a promise that, in the event of submitting the appropriate application, they will receive permission to purchase the specific property covered by the promise after meeting the conditions specified in its content.
A “promesa” is issued by the same minister who also issues permission to purchase real estate. The “promesa” is issued for one year and is binding on the minister within this period. Therefore, if a foreigner possessing a valid “promesa” applies to the minister, they are obligated to issue permission in accordance with its content unless the factual circumstances in the case have changed.
Costs of acquiring real estate by a foreigner
Applying for permission to purchase real estate by a foreigner entails the obligation to pay a corresponding administrative fee. As of the date of preparing this article (2023), the administrative fee for issuing permission for a foreigner to purchase real estate amounts to PLN 1570. The corresponding fee for issuing a “promesa” is PLN 98. If a foreigner submits an application through a representative, an additional administrative fee of PLN 17 is required to cover the submission of the power of attorney.
Administrative fees are paid to the account of the relevant Commune Office in the location of the office to which the application is directed. Due to the fact that the only competent office for considering applications for permission to purchase real estate by foreigners is the ministry responsible for internal affairs, located in Warsaw, all administrative fees in such cases are paid to the bank account of the City of Warsaw.
Administrative fees can be paid by bank transfer, along with submitting the application with proof of payment, or directly at the office when submitting the application in person.
Proceedings regarding granting consent for the acquisition of real estate by a foreigner
Considering an application by the relevant Minister is unfortunately often a time-consuming process and can take several months, or sometimes even longer. The lengthy nature of the administrative process is influenced by the substantial volume of documentation that needs to be analyzed and the fact that the application often also requires opinions from other ministries.
However, in the context of real estate located in special economic zones, there is a special, expedited procedure that allows a foreigner to obtain permission within 1 month of submitting the application.
In the event that the decision issued by the Minister is unsatisfactory for the applicant, they have the option to request a review of the case or to lodge a complaint directly with the Administrative Court. The applicant can also appeal the objections raised by the Minister of Defense or the Minister of Agriculture.
Acquiring real estate by a foreigner without the required permission
Acquiring real estate by a foreigner without obtaining the required permission renders the acquisition legally ineffective. According to the provisions of the described law, the invalidity of acquiring real estate by a foreigner without obtaining permission can be established through a court ruling upon the application of the entity competent due to the location of the real estate, the mayor (burgomaster, mayor), county governor, voivode, or at the request of the minister responsible for internal affairs.
Acquiring real estate in Poland by foreigners – Summary
Acquiring real estate in Poland by foreigners is possible, but in many cases, it will require obtaining prior permission issued by the Minister responsible for internal affairs through an administrative decision process. To obtain such permission, the acquisition of real estate must not jeopardize the security interests of Poland, and the foreigner must demonstrate their ties to Poland.
When assessing whether permission is required in a given case and in activities aimed at obtaining it, the assistance of a professional lawyer, an advocate, or a legal advisor can be invaluable.