Tax & Legal Highlights for Real Estate – November 2020
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1. Project of the act on settling the price of premises or buildings in the price of property sold from the municipal property reserve.
At the beginning of November 2020, the Council of Ministers adopted the project of the act on settling the price of premises or buildings in the price of property sold from the municipal property reserve. This act is to serve as one of the mechanisms for increasing the availability of land for housing investments, encouraging municipalities to invest in housing with accompanying infrastructure, implementing the National Housing Programme and, in the wake of the COVID-19 pandemic, acting as an incentive for the real estate sector. The main objective of the project is to involve investors in the construction process of housing, in which they would purchase land from municipalities or from the National Property Reserve, in exchange for the transfer to municipalities of part of the premises allocated from newly constructed or renovated buildings, which could then be included in the municipal housing reserves or companies. An important factor encouraging investors will surely be facilitations presented by the project of the act in terms of land development. Upon entering the tender, the investor would be provided with an already issued zoning decision or an excerpt from the local master plan, which would significantly simplify planning on the areas covered by the tender. Additionally, developers engaging in this type of cooperation with the public administration could count on greater investment opportunities due to the release of unused or neglected real properties owned by the State Treasury and municipalities, as well as certain profits due to regulation of tender procedures for the purchase of the real property. Further legislative work on this project of the act is certainly worthy of attention due to the investment potential it may bring. The planned changes are expected to enter into force in early 2021.
2. Digital spatial plans
On 31 October 2020, the amendments to the Act on Spatial Planning and Development introduced by the amendment to the Geodetic and Cartographic Law came into force. Based on new regulations, local governments are obligated to create digital data necessary for land planning and management. Data in the form of numerical or orthophoto maps will be available online free of charge, along with LIDAR measurement data, numerical terrain models, data on geodetic frameworks and basic information on plots and buildings. Nevertheless, in transactions conducted before a notary public, a certificate on designation of a real property in the local master plan will still be required.
3. Impact of a new energy efficiency requirements for buildings on pending building permit applications
As of 1 January 2021 long-awaited amendments on the energy efficiency of buildings will enter into force under chapter X (§ 328-329) of the Regulation of the Minister of Infrastructure dated 12 April 2002 on technical conditions to be met by buildings. New regulations aims at reducing the permeability parameters of buildings by 20% on average. In practice this amendment might cause a number of complications for investors whose application for a building permit will not be considered by the end of this year, as there are currently no transitional (intertemporal) regulations that allow the authorities to apply old regulations (with less restrictive requirements concerning energy efficiency of buildings) if the application for the building permit is not considered by 31 December 2020. In consequence this means that if the contemplated investment does not meet the new energy efficiency requirements, no building permit will be issued, even though the investor has submitted an application under the less restrictive energy efficiency provisions. The existing Covid-19 pandemic undoubtedly lead to the situations in which many building permit applications are not processed on time. Consequently, without appropriate transitional provisions investors, whose applications have not been considered on time will be obliged to adjust their investments to new provisions resulting from the said regulation
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