Tax & Legal Highlights for Real Estate – March 2019

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1. Are the owners who have not received certificate of transformation of perpetual usufruct into ownership obliged to pay perpetual usufruct fee?

Legal regulations lack precise information regarding the obligation of the owners of houses and apartments, who have still not received certificate of transformation of perpetual usufruct into ownership to pay annual perpetual usufruct fee before 31 March 2019. Moreover, lawmakers did not introduce any regulations that would impose an obligation on competent authorities to issue certificates before that date. Due to lack of clear legal provisions, local authorities in such cities as Warsaw or Gdansk, exercising caution, encourage their residents to pay the fee in due time. In case of lack of transformation, residents would have to pay two annual perpetual usufruct fees in the upcoming year, and the one for 2019 with interest.

The Ministry of Investment and Economic Development expressed its view on this issue. According to the Ministry’s position, in case of lack of certificate it is necessary to pay the fee in due time as until then perpetual usufructuary can not be certain if the transformation of perpetual usufruct into ownership has been successful.


Act of 20 July 2018 on transformation of the right of perpetual usufruct of land developed for residential purposes into ownership of land (Journal of Laws 2018, item 1716)

2. Works on the amendment to the property management act – proposal to shorten the transitional period

The Parliament is working on the amendment to the property management act of 21 August 1997. Its authors, by introducing 20-year limitation period for claims for restitution of expropriated real property, seek to stabilise their legal status. Due to the proposed amendment, it would also be permissible to use the real estate for the purpose other than set by the expropriation decision.

The amendment provides for limitation period for claims related to real estate expropriated for state or local government needs, in case 20 years have elapsed since the decision, even if the expropriated real estate is not used for the purposes indicated in the decision. Art. 3 of the amendment provides for 3-year transitional period. It means that during such period, in case of meeting additional statutory requirements, former owners or their legal successors will have the right to apply for restitution of expropriated real estate if such real estate is being used for purposes other than previously provided. Senate, which is currently working on the amendment, proposed shortening the limitation period to 1 year.


3. The Government accelerates works on the project of the development act

The new project of the act on protection of rights of buyers of housing apartments or detached houses and on the Development Guarantee Fund shall provide greater protection for buyers of these real properties – before their construction, during the development, as well as with regard to apartments and houses already built. Therefore, the project envisages, among others, creation of the Development Guarantee Fund, to which developers shall pay premiums from each payment to the escrow account. New solutions include also statutory determination of the reservation fee and developer’s obligation to return it in case of negative decision of the bank to finance the acquisition. In addition, pursuant to the project the buyer shall be entitled to withdraw from the development agreement in case of occurrence and non-removal of a major defect. After approving the project by the Government, it will be proceeded in Sejm and if adopted, it may come into force next year.

4. Changes in trade of agricultural properties

On 12 March this year the Council of Ministers approved the project of the act amending the act on shaping the agricultural system and other acts, adoption of which in 2016 provoked stormy discussions. The aim of the project is to mitigate restrictions in trade of agricultural properties by, among others, extending the catalogue of situations in which the act shall not apply (e.g. acquisition of agricultural properties located within administrative boundaries of cities). In addition, new regulations shall allow for the acquisition of some of the agricultural boundaries of cities). In addition, new regulations shall allow for the acquisition of some of agricultural properties by a person not being a farmer, without necessity of obtaining respective permits. This relates to, among others, agricultural land with the area smaller than 1 ha, agricultural properties acquired in enforcement and bankruptcy proceedings or as a result of division, transformation or merger of companies. Further works on the project will be now conducted by Sejm.

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See the previous editions: February 2019


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