You made a decision to buy a property? Good for you 🙂
If it’s the first time in your life, or if it’s your first purchase in Poland, we appreciate that the whole process might be overwhelming. To help you organise your thoughts; show you where to start and what you need to think about we prepared the following instruction.
Mind you, buying a property is not a simple and straightforward process. Something that might have taken just one month for one person could take even a few months out of someone else’s life! Why? It all depends on whether you’re buying from primary or secondary market, whether you fund it from your own savings or you need a loan, how much time you spend searching for a perfect place.
This blog post will give you an idea of how the process looks like. Since most of us need to take a mortgage to fund the purchase I included it in the process, if you’re lucky enough to be able to use your savings only – just cross out sections related to the loan.
Restrictions for foreigners buying property in Poland
Yes, there are some restrictions concerning foreigners buying properties in Poland. Luckily, European Union citizens won’t have too many problems with it – the only issue they might encounter is when the purchase would be considered a threat to polish defensiveness.
It’s a bit more complicated for those from outside of EU. If non-EU citizens would like to buy a property in Poland it might be that permit to purchase will need to be obtained first.
Want to find out more about the restrictions? Read more in our previous post: restrictions when buying a property in Poland for EU and non-EU citizens.
For those who don’t have enough savings – before you start looking for properties to buy check your financial ability. In case no bank will give you mortgage, this will spare you time and effort you’d otherwise put into the search process.
So, if you don’t want to get disappointed check your credit-worthiness first – the so called zdolność kredytowa. It is the maximum amount of money that a bank can lend you for the property purchase.
There are lots of calculators available online but they will not give you certainty. You should go to several banks and ask them to make the calculation for you (don’t go to just one – while one bank might deny your application, another one might accept it).
If you don’t like wasting your time use services of a financial adviser. They will compare offers from several banks for you, will explain the process of getting mortgage and will basically take care of a lot of formalities for or together with you – this will spare you not only time but also from learning all about getting a mortgage in Poland.
Important thing – financial advisers don’t take money from their clients – they get commission from the banks. Interested? I can provide you a name of an English speaking adviser if you like. Get in touch!
Note: In the past you could get a mortgage to cover the whole property price. Currently in Poland you need to have at least 10% of the total price available upfront. It’s the so called own financial contribution – wkład własny. In 2017 it’s supposed to be 15%.
For better overview of other expenses, check out Additional costs when buying a property.
Finding a property to buy in Poland
Have you made a decision yet whether you want to buy from primary or secondary market? We will write a few more articles to give you more of an insight into the differences between these two.
If you’d like to know where to search for properties in Poland read here.
The big question is whether to start searching for properties privately or through an agent. Read here to check out all the pros and cons.
Once you choose a property that you really like – remember to check its legal status. Just to mention a few things: check księga wieczysta (land register), check who is the actual owner of the flat or if there are any impositions. Ask the owner to show you a proof that they indeed have right to sell the property to you.
Mind you, if you need to obtain a purchase permit, you can only do it when the property has been already chosen. So this is the right moment to take care of it.
It’s a form of reservation of a flat – it doesn’t have to be a notary document. At this stage you will have to make an advance payment.
If you’re using real estate agent’s services then don’t worry – it’s their job to make sure this agreement doesn’t work to your disadvantage. If you’re doing it on your own and you’re taking a loan – make sure you set the final date of purchase at least 2-3 months in advance, as this is how long it might take before you get the mortgage.
Getting a mortgage in Poland
You or your financial adviser collects all the necessary documents to apply for the mortgage. You should send the application to 3 banks that can give you the best offers. Once you get positive replies from them you’ve got 1-3 months (depending on the bank) to make a decision which offer you like the most and want to use. Remember, your time is limited by the final date of purchase – this date has been set in the preliminary agreement.
A credit agreement will be signed in a bank in presence of a bank representative and if applicable your financial adviser.
Once the mortgage is obtained you can go ahead and sign the final contract of purchase – this need to be done at the notary office.
4 documents are needed, 3 of them should be provided by the person selling the flat (property owner or developer): proof of ownership, excerpt from the Land and Mortgage register and a certificate from administration that there are no delays in any admin payments.
You (or your financial advisor) only have to make sure you take the credit agreement with you with all documents necessary for mortgage registration.
Also, take money with you. At the notary office you will need to pay for the following:
- Podatek od czynności cywilnoprawnych (PCC) – the tax on civil law transactions that amounts to 2% of the transaction (only applicable if you’re buying from secondary market, that is)
- Taksa notarialna (notary fee) – determined by notary
- Odpis aktu notarialnego (copy of a notary’s deed) – determined by notary
- Otwarcie księgi wieczystej or Wpis prawa własności w księgę wieczystą (the opening or the registration of ownership right in the Land and Mortgage Register) and mortgage registration fee. The last one, mortgage registration fee, might be done by notary or by you personally (the last option is cheaper)
- Once our flat is registered in the Land and Mortgage Register you should deliver the newly signed notary act to the bank – as a confirmation of the purchase. At this moment you should also deliver the confirmation that you paid own financial contribution. Only then will the bank start the credit procedure and make the transfer.
Acceptance of the property
The nicest part – this is when the previous owner or developer hands us the keys to our property.
This is also the moment to do the meter reading as well – as you will need it later to sign your own contracts for media.
You need to go to the tax office to submit tax declaration PCC-3 (a bank or financial adviser should help you fill it in) and pay tax over mortgage registration which is 19 zł.
Then go to City Hall to inform them about your property purchase. You will then be signed up as an owner of this property and based on that the City Hall will send you a yearly tax bill.
Last but not least you need to choose your gas, internet, and electricity provider and start new contracts with them as well.
If you bought the property for yourself to live there (not to let) then don’t forget to change your mailing address wherever needed (bank, work).
Now you can enjoy your new property!