Acquisition of real estate by foreigners in Poland : principles and procedure

Abstract

Acquisition of real estate by foreigners in Poland is governed by Act of 24th March 1920. This Act, owing to the fact that Poland joined the European Community, and thereby was obliged to adjust the Polish legislation to European standards of legal regulations, was fundamentally amended, so its present form can be found in Journal of Laws from 2004, no 167, item 1758 (further called the Act). The real estate in Poland comprise ground estate (including agricultural), buildings permanently related to ground or parts of such buildings, if special regulations state that they constitute separate from the ground subject of the right of ownership (Article 46 and later of the Civil Code, Journal of Laws from 23rd April 1964, no 16, item 93 with further amendments). The ground estate is a part of the Earth surface constituting separate subject of ownership, whereas the agricultural estate is the estate which is or may be used for purposes of production activity in agriculture in the field of plant and animal production (including gardening, orcharding, fishing). For acquisition of real estate in Poland, regardless whether it is acquired by a Pole or a foreigner, it is always necessary to do it in the form of a notarial act, otherwise the legal activity of acquisition of real estate will be void. In practice it means that any such acquisition must be concluded before a notary in order to be valid. According to the Act, the acquisition of real estate is any legal event from which results in acquisition of the right of ownership or perpetual usufruct, because these two rights are legally similar. Considering the archaism of legal construction of perpetual usufruct, the Polish legislation is slowly moving away from it replacing it with the right of ownership, which is fuller.