Buying Property in Poland
The Definitive Guide to
Buying Polish Property

Financial Fees and Obligations

This is a preview to the chapter Financial Fees and Obligations from the book Buying Property in Poland by Tim Hill.
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Introduction


As in most countries the purchase price of the real estate does not represent the total amount you will need to budget for. Other considerations should include agency fees, solicitor fees, the cost of translating documents, purchase tax and court fees. On new developments VAT is also payable and not all builders include this in their pricing despite it being a considerable on cost.

Once the property is in your hands, if you are thinking of renting there is income tax and when you come to sell a capital gains tax operates.

Transaction Costs


The table below demonstrates the sample costs that need to be budgeted for on purchasing a 300,000 zloty property on the secondary market through an agency.

[THE TABLE IS A GRAPHIC AND IS NOT INCLUDED IN THIS PREVIEW VERSION]

On new builds there is also VAT to pay on the purchase price if it has not already been included by the developer and a larger land registry fee (see below).

Agency Fees

The majority of agents charge buyers a fee when purchasing a property through them. This is usually between 2—3% and will be defined in the agency’s terms and conditions which often need to be signed before viewings and sometimes even before specific details about a property are given out.

Solicitor’s Fees


As a foreign buyer you will usually be paying two solicitors. The first is the one who witnesses the signing of the contract of sale and the second is the one who will act for you under power of attorney (see Chapter 12).

For the witnessing solicitor (called a notary in Poland) the fee is set in law and is based on the value of the property not including VAT. It is calculated as follows:
  • 1,010 zloty + VAT (22%) for the first 60,000 zlotys of the purchase price
  • 0.5% + VAT (22%) of the purchase price which is above 60,000 zlotys but less than 1,000,000 zlotys
  • 0.25% + VAT (22%) of the purchase price that is above 1,000,000 zlotys

For the solicitor who acts on your behalf expect to pay around 6,000 zlotys for a standard residential transaction. Do not try to budget or save in this regard, mistakes in the contract of sale or in how the sale is registered could prove extremely costly later. Choose a solicitor with experience rather than one offering a low price.

Translating Documents


As labour costs are lower in Poland so are the costs of certified translators. How many documents you need will generally be related to whether or not you are applying for a mortgage and whether or not you are ready to trust your solicitor’s verbal explanation or want to see the paperwork in English yourself.

Most certified translators charge by the word at about 300 zlotys per document. Take the recommendation of the agent, mortgage broker or solicitor in order to find one that is well versed in translating documents related to property transactions.

Purchase Tax / Stamp Duty


Every property purchase requires tax to be paid at 2% of the sale price and this must be done within 14 days of the transaction being completed.

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What else is in the chapter 'Financial Fees and Obligations'?

Land Registry Fee

A real estate transaction in Poland can only legally be recognized by a court of law and entered into the land registry. On the secondary market this is a case ...

VAT

For off-plan properties the sale falls under the VAT category of Construction and Repair Services Relating to Housing. As such VAT is due at the reduced rate of 7%. A ...

Post Transaction Costs and Fees

Personal Income Tax (PIT)

If you are going to rent your property to tenants then you are going to generate an income arising in Poland and be liable to income tax. You can offset ...

Company Income Tax (CIT)and National Insurance (ZUS)

If you have decided to set up a Polish registered business, and many people who are expecting to carry out regular real estate related transactions in the country do, then ...

Capital Gains Tax

When you come to sell there is an obligation to pay tax on the profit of your purchase but the amount depends on what you were using the property for ...

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