Tax & Legal Highlights for Real Estate – June 2019
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1. Pre-consultation of the draft of new provisions on spatial development
The draft of the new Act on spatial planning and land development provides significant changes, including inter alia introduction urban standards, two types of plans to be adopted by the municipality, i.e. intended-use plans and development plans, as well as replacement of decisions on land development and management conditions with location decisions. The intended-use plan shall have a general character – it will cover the whole area of municipality and replace the study of land use conditions and directions of spatial development. The development plan will clarify the arrangements of intended-use plans and it will replace the local spatial development plans. Furthermore, the minister of investment shall determine, by means of a regulation, the National Urban Standards, including inter alia the minimal density of public roads within developed areas and minimal participation of public areas.
2. Changes in sale and purchase of agricultural land
The amendment to the Act dated 11 April 2003 on structuring the agricultural system (“UKUR”) will make it easier for persons not being farmers to purchase agricultural properties with area of less than 1 ha. As a result of the amendment, the catalogue of entities to which basic conditions of purchase of an agricultural property do not apply, has been extended (i.e. holding status of a farmer, area limitation and necessity of obtaining a consent of the General Director of the National Centre for Agricultural Support (“KOWR”)). The legislator has waived rigorous requirements under the UKUR inter alia in case of sale of a property within insolvency or enforcement proceedings, as well as in case of purchase as a result of dissolution of coownership, division, restructuring or merging commercial companies. Moreover, the right of pre-emption of shares in commercial companies shall be exercised by KOWR only if the company is the owner of or holder of perpetual usufruct right to agricultural properties with a total area of at least 5 ha.
3. Housing cooperatives
At the beginning of June 2019, a draft of the Act on housing cooperatives has been made available for public consultations. The aim of this act is to develop possible ways of satisfying housing needs, first of all by creating an alternativ to purchase a flat from a developer on the primary market. Due to lack of existing legal provisions for housing cooperatives, persons executing investments in this form have face difficulties in obtaining investment’s financing, as well as in acquisition of land, in particular these constituting part of municipal real estate resources. The draft introduces definitions of both the “housing cooperative” and the “housing investment”. Pursuant to initial assumptions of the legislator, the housing cooperative shall function on the basis of the written agreement or in the form of a civil partnership. Sale of lands being part of the municipal real estate resources intended for execution of housing investments by housing cooperatives shall take place in the form of a tender.
4. Announcements of significant changes in the construction law
The government is working on a draft of amendment to the construction law. The main goal of the amendment is to grant greater freedom for investors and real properties’ owners, both at the stage of investment execution, as well as works related to its operation and renovation. We may expect a definition of impact zone to be amended, and rules of execution of construction project to be simplified.