Limitations to Foreigners

1. Are there in your national system any limitations to foreigner citizens or foreign companies/companies controlled by foreign citizens regarding the acquisition of immovable properties? If yes:

You need a permit to buy real estate in Poland if you are a foreigner from outside the European Economic Area (this area is made up of the European Union countries, Iceland, Liechtenstein and Norway) or Switzerland.

A foreigner is:
– a natural person who does not have Polish citizenship,
–  a legal person with its seat abroad,
–  an unincorporated company of persons who do not have Polish citizenship or a registered office in Poland, which has its seat abroad and was established in accordance with the legislation of foreign countries,
– a legal person and an unincorporated commercial company with its seat in the territory of Poland, controlled directly or indirectly by persons or companies that are foreigners.

When a permit is not needed:
If you are a citizen or entrepreneur based in the territory of one of the countries of the European Union, Iceland, Liechtenstein, Norway or Switzerland (regardless of the origin of the capital), you do not need a permit to acquire any real estate in Poland.Regardless of your citizenship or registered office, you do not need a permit if you acquire:

The so-called independent dwelling within the meaning of the Law of June 24, 1994 on Ownership of Premises – this is a dwelling that consists of rooms and auxiliary rooms (e.g., kitchen, bathroom) and provides you with adequate housing conditions. Such premises may also include, among other things: a basement or attic, even if they are not located directly next to it.

Premises or a share in the premises intended for a garage – if you, as a buyer or owner of real estate or an independent dwelling, want to have a garage to provide you with adequate housing conditions.

Real estate – if you have lived in Poland for at least 5 years after obtaining a permanent residence permit or a long-term EU resident’s residence permit.

Real estate that will become part of a community of property – this is the case if you have a wife or husband with Polish citizenship and have lived in Poland for at least 2 years since obtaining a permanent residence permit or a long-term EU resident’s residence permit, real estate from a person who has been its owner or perpetual usufructuary for at least 5 years and you are, on the date of acquisition, entitled to inherit from that person (e.g., a daughter, son or grandson acquires real estate from his mother, father or grandparents).

Property as a mortgagor (bank) – when you take ownership of the property after an unsuccessful auction in foreclosure proceedings.

Note: You must also have a permit to acquire real estate in the cases indicated above if you are acquiring real estate located in the border zone and agricultural land of more than 1 hectare.

You do not need to obtain a permit if you acquire real estate by inheritance and you are a person entitled to statutory inheritance in accordance with the laws of your country of origin. If there is no such inheritance in your country, you are bound by Polish law.

The exemption from licensing applies both to the acquisition of real estate through statutory and testamentary inheritance, as long as the persons appointed to the inheritance under the will are at the same time part of the circle of statutory heirs. Determination of the circle of statutory heirs is based on the testator’s native law.

Note: You must obtain permission to acquire real estate by inheritance if you are entitled to testamentary inheritance and do not belong to the circle of statutory heirs.

What conditions you need to meet to get the permit:
You will get a permit if:
– your acquisition of the property will not cause a threat to defense, state security or public order
– it will not be opposed by considerations of social policy and public health
– you show that there are circumstances confirming your ties to Poland.

To demonstrate ties to Poland you may indicate that:
– you have Polish nationality or origin
– you have a wife or husband who are Polish citizens

You have a residence permit:
temporary (this does not apply to a temporary residence permit for victims of human trafficking or due to circumstances requiring a short-term stay of a foreigner in Poland), or
– permanent, or
– a long-term EU resident
– you are a member of the management board of a controlled commercial company
– you are conducting business or agricultural activity in Poland, in accordance with the provisions of Polish law.

Important! If you are acquiring real estate for living purposes, its area must not exceed 0.5 hectares.

If you are an entrepreneur and acquire real estate for business purposes, you must demonstrate that the acquisition of real estate is related to actual needs that arise from the nature of your business or agricultural activity.

How to get a promise to grant a permit:
You can apply for a promise to grant a permit, or a promise. It does not entitle you to acquire real estate, but – if you apply for a permit within the period of validity of the promise and meet the conditions set forth in the promise – the Minister of Internal Affairs and Administration is obliged to issue you a permit. Exceptionally, the Minister will refuse to issue a permit if the facts relevant to the outcome of the case have changed.

The promise specifies what conditions you must meet to obtain a permit.
The promise is issued for 1 year.
The application for a promise should meet the same requirements as the application for a permit. This includes the obligation to attach documents that prove your right to acquire the property.

When should you handle the case:
At any time.
Submit your application early enough to receive the permit before the end of the term of the statement of intent to dispose of the property and the validity of your residence card – if it confirms your ties to Poland.

Where will you handle the case:
MINISTRY OF INTERNAL AFFAIRS AND ADMINISTRATION 5 Stefana Batorego St., 02-591 Warsaw

1.1. Which legal regulations regulate in your country the prohibitions or limitations for foreigners’ acquisitions in case of transfer of property? Please specify the legal regulation and/or the range of the regulation that contains the prohibition.

The acquisition of real estate by foreigners is regulated by the Law of March 24, 1920 on the Acquisition of Real Estate by Foreigners. It specifies the conditions that must be met to acquire and use real estate by a foreigner, which is also, according to the law, a legal person or an unincorporated business entity that is a commercial company. The law also includes information on when permission to acquire real estate is not required. The law was passed by the Legislative Sejm and is currently the oldest Polish law in force.

1.2. What do these limitations consist of?

N/A

1.3. Do these limitations apply to any foreign citizen, regardless their nationality, or only to non-EU Members national citizens?

N/A

1.4. Do these limitations have?

N/A

• A defensive/protective purpose
• An economic purpose
• Both economic and defensive/protective purposes
• Other purposes (please specify)

2. To which kind of land registry unit do these limitations apply? (Example: only land plots, only rural areas, only foreign borders, dwellings and homes, other buildings?

N/A

3. To which kind of transfers or burdens do these limitations apply? (Example: to every transfer, non-free transfers, differently in case of inheritance than in case of purchase, mortgages in favor of foreigners….)

N/A

4. Apart from the previous limitation to acquisition of property by foreigners, are there any other measures at your country relevant for this topic? (Example: pre-emption rights in case of purchase un favor of a foreigner, social or residential measures bases on nationality and non in residential permits….)

N/A

5. To what extent the land registrars’ controls in a deed of transfer the prohibitions imposed to foreigners to acquire land and buildings in your country?

In order for a foreigner to purchase real estate in Poland, he or she needs a permit issued, by way of an administrative decision, by the minister responsible for internal affairs (in cooperation with the Minister of National Defense).

Entities from the European Economic Area do not need to apply for a permit to acquire a dwelling, including those located in the border zone. The area of property acquired for residential purposes may not exceed 0.5 hectares nationwide.

The EEA includes countries such as Norway, Liechtenstein and Iceland. Switzerland has not chosen to join the EEA; it is a member of EFTA. The European Union and its EEA EFTA partners (Iceland and Norway).

Acquisition of some real estate by a foreigner without a permit is possible. This applies to such real estate as dwellings and garage units or a share in them, if the purchase is made in connection with the satisfaction of residential needs. A foreigner may also acquire real estate without a permit if he/she has resided in Poland for at least 5 years on the basis of a permanent residence permit or as a long-term EU resident, or is the spouse of a Polish citizen and has resided in Poland for at least 2 years on the basis of a permanent residence permit or resident permit. Also, a permit for the acquisition of real estate by a foreigner is not required if he or she has inherited the property and the testator has owned the property for at least 5 years. (Note about wills section 1.3).

The notary’s obligation to include in the notarial deed or when certifying documents additional information and statements intended to indicate citizenship or possession of foreigner status, if the notarial deed being drafted or the documents being certified involve the acquisition of real estate by a foreigner or the subscription or acquisition by a foreigner of shares, stocks or all rights and obligations in a commercial company based in Poland. In the case of drafting such a notarial deed, where the purchaser is an individual, the deed must now include information on the individual’s citizenship, and in the case of an entity based in the territory of the Republic of Poland, a determination or statement as to whether the entity is a foreigner within the meaning of the Act, with such a statement also having to include justification.

As of January 1, 2017, a notary public, when certifying on a document covering the acquisition or assumption by a foreigner of shares, stocks or all rights and obligations in a commercial company based in Poland, will require the persons signing such a document to provide the name, surname, place of residence of the individual and his or her nationality, and in the case of certification of signatures made by persons representing an entity based in Poland – their statement as to the foreigner status of the entity they represent. The notary is obliged to include this information and statements in the certification he makes.

5.1. Do you only check if the transfer administrative authorization requirement is met, or do you also confirm that the authorization is valid? For example, do you consider property type, like rural or forestry classification, which might limit foreign transfers? Or do you verify the percentage of foreign land ownership in a specific area, especially if there are restrictions on the number of buyers or land size?

I only check the form and content of the document, which follows from Article 626(8) § 2 of the Code of Civil Procedure.

According to the wording of Article 626(9) of the Code of Civil Procedure, the court shall dismiss the application for entry if there are no grounds or obstacles to entry.

5.2. What would happen if an authorization were needed, and it does not come with the title submitted for registration?

Dismissal of the application for entry (no grounds).

5.3. What would happen in case a deed of inheritance in favor of a foreigner transfers property over land or buildings subject to limitations for foreigners’ acquisitions in your country?

A foreigner’s permit is not required if he or she inherited the property and the testator owned the property for at least 5 years. In the case of testamentary inheritance, the disposition of the property must be made to persons included in the circle of statutory heirs, in accordance with the relevant provisions of the Civil Code (in effect on the date of the testator’s death). If a foreigner who has acquired property included in the inheritance on the basis of a will (and is not included in the circle of statutory heirs) does not obtain permission from the Minister of Internal Affairs on the basis of an application filed within two years from the date of the opening of the inheritance, the ownership of the property or the right of perpetual usufruct shall be acquired by persons who would be appointed to the inheritance by law.

These provisions also apply mutatis mutandis to the acquisition of shares in a commercial company that owns or perpetually uses real estate in the territory of Poland by inheritance.

5.4. If the states have preemption right in case of transfer, would you reject the registration if no notification to the state to enhanced it right is done?

The provisions of articles 596-602 of the Civil Code1 provide a definition of the right of pre-emption, the general rules for its establishment and exercise. The right of pre-emption consists in the priority to purchase a designated thing in the event of its sale by the other party to a third party.

The right holder may not exercise the right on his own initiative, but should be notified by the obligor of the conclusion of the contract of sale sale agreement (Article 598 § 1 of the Civil Code)5. The effect of the notification is the possibility on the part of the entitled party to unilaterally shape the legal relationship by which the other party is bound6. Unless a specific provision provides otherwise, submission by the entitled person of a declaration on exercising the right of pre-emption leads to the conclusion of a sales agreement between the seller and the entitled person with the content agreed upon by the obligor with the third party (Article 600 of the Civil Code)7.

The consequence of exercising the right of pre-emption is the ineffectiveness of the contract of sale concluded by the obligor with the third party (the contract ceases to bind the parties). On the other hand, if the entitled entity does not exercise its right of pre-emption, a contract of sale concluded with a third party will come into effect.

6. Do you expect any legal modifications on this issue?

No.