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A Guide to Buying a Property in Poland - Articles Surfing


Overview

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 real estate 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 back to top

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 real estate market in Poland.

Residential Real Estate in Poland - Single Family Properties back to top

Trade by foreign nationals in single family residential dwellings has been somewhat limited in the past couple of decades. While foreign nationals have been found buying single family dwellings 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 back to top

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 Polish 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 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 back to top

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 Options back to top

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 back to top

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.

Submitted by:

Les Calvert

Director of the webs number 1 property portal http://www.property-abroad.com/poland Les Calvert often writes information and articles for newspapers and websites on the overseas property market.



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