Follow these simple steps and that ideal property in Poland will be yours.
1. Research the market
Before you fly out to Poland, spend plenty of time researching the market online. Go through all of the information in the Poland section of this site and then start looking for developers, agents or individual properties that look as if they might be interesting.
The Polish Listings section of the site is probably the best place to start your search, but also check out the advertising in this section, and look at the Directory to get some more contacts.
If you are looking for a bargain, then think about subscribing to our weekly newsletter that gives details of selected properties that we think represent good value – these listings aren’t usually advertised to foreigners. Click here for more information on subscribing.
|2. Arrange Your Financing (Optional) |
Although it is possible to arrange financing in Poland through a Polish bank, you will probably find it a lot easier to obtain financing in your home country, perhaps by re-mortgaging your current property or properties. Another option is to discuss the possibilities with a mortgage broker who is based in your home country and has experience of arranging mortgages on property overseas.
It is advisable to do this before heading out to Poland so that you have a firm idea as to what your maximum budget is going to be. If you spend all your time over there looking at properties around EUR150,000 and then come back and find that the maximum amount you are able to finance is EUR100,000, your time will have been wasted.
Also, it’s recommended that you talk to an accountant about the best way of purchasing an overseas property in advance so that you minimize your tax liability.
You can find details of potential sources of finance in your home country in the International Directory section of the site.
3. View the Properties
Use the Budget Flights Tool to work out the most affordable way of getting to Poland and then head out there to look at those properties that look most interesting for you. Check the properties, or the locations if you are looking at an off-plan property. Don’t just check the properties themselves, check out the areas that they are located in as they will all be new to you. Ask plenty of questions.
What kind of tenants are you expecting to work with? If you are looking for short-term tenants (i.e. tourists), then you are going to need something very close to the centre. Are there some good hotels close to the property? If so, you’re looking in the right place. If you are looking for long-term rentals, then make sure that it is in a desirable part of the city, if not the centre. Ask yourself the question, “would I like to live here?” If the answer is no, then chances are that the up-market tenants you are planning on renting the property will also not be so keen.
Take your time making a final decision as to which property to go for – get as many independent opinions as you can. Remember that agents and developers are all going to be trying to sell you hard on what they have available, so don’t expect an unbiased opinion from them.
4. Finalize The Deal
Once you have found a property of interest, it’s time to put in an offer. As is the case in territories such as the UK, it is customary to offer a slightly lower amount than the advertised ‘asking price’. Make sure you know exactly what costs are covered in the final selling price to avoid any nasty surprises further down the line. Typically, the seller should be responsible for paying 22% VAT, and perhaps the estate agent’s commission (which is probably going to be in the region of 5% of the total). Ordinarily, however, the seller will try and split the commission, however, so you really do need to check this first. You, as buyer, will be responsible for all of the other buying costs as detailed below.
5. Arrange Local Financing (Optional)
If you haven’t already arranged financing in your home country, you need to arrange it locally. If you’re going to be buying off-plan, then check with the developers to see if they can recommend a local bank. If not, you’re on your own. Check out the links to Polish Banks in the directory section.
The process of obtaining a mortgage in Poland from a bank is going to be similar to that in your home country. They are going to see some proof of income before committing to a loan, so make sure that you bring all of your important documents with you to a meeting with a bank. Expect to have to wait for a minimum of a week or two in order to get a final decision from the bank, perhaps longer.
6. Hire a Lawyer
Although most Poles buy and sell property without being represented by a lawyer, as a foreigner it will be in your best interests to have unbiased help to guide you through the process. Expect to pay somewhere in the region of EUR70-100 per hour for a lawyer to guide you through the property buying service.
As it is vital that you find a lawyer who is representing your interests and your interests alone, don’t ask the real estate agent or developer to recommend one – it’s better to choose one yourself. You can find details of Polish Lawyers in the directory section.
One other advantage of using a lawyer is that, by giving them ‘Power of Attorney’, they will be able to sign legal documents on your behalf. This alone can pay for their costs if it means your having to make one less trip to Poland in order to complete the buying process.
7. Sign A Sales-Purchase Agreement
If you’re buying an off-plan property, then perhaps the developer will require you to sign a reservation agreement before you get to this stage, but the main document is a sales-purchase agreement that will be drawn up by a local notary on behalf of both the seller and the buyer. This is a formal, legally-binding contract which contains all of the key information about the agreed deal including the details of the property, the total amount payable, the deposit, penalty clauses, etc. Typical penalty clauses will be that the buyer loses his deposit if he pulls out of the agreement while the seller will forfeit double this amount. It will also give a completion date for the final contract, which is likely to be a maximum of three months from the time when the sales-purchase agreement is signed.
The cost of this agreement is usually paid for by the buyer. Immediately that the agreement is signed, the buyer will pay a deposit – usually around 10-20% to the seller.
8. Inspection Period
While the notary is checking the status of the property, you will now have a certain amount of time to inspect the property. It is not so common in Poland to request for a surveyor to make a full structural report on a property. If the property has been built recently, then a survey should not be necessary. Check the property out yourself. Chances are that it will be OK, but if you see anything that could cause you sleepless nights, then perhaps it is worth the money to get the property checked out first.
You can find details of Polish Surveyors in the directory section. Expect to pay EUR150-300 for a full survey.
Your lawyer should also use this period to check that all is present and correct from a legal standpoint. During this time, you should also be arranging the final financing deal with your bank or mortgage broker so that all of the funds are available at the time of completion.
The final stage involves another visit to the notary. In the highly likely event that you don’t speak fluent Polish, you will need to have a certified translator accompany you to the meetings with the notary if you are not being represented by a lawyer. These certified translators charge around EUR40 per hour (and the process should take 2.-3 hours in total).
Note that, in Poland, loans secured by property remain attached to a property and not to the owner, so ensure that the seller is able to provide a document from the council offices at the completion meeting confirming that there are no loans secured on the property. Make sure that this document bears the actual day of the final signature in case the seller has taken out a secured loan since the document was issued.
At this meeting, you will need to make the following payments:
1.5% of the total purchase price in notary’s fees (some of which will already have paid at the time of the sales-purchase agreement).
2% of the total purchase price in Transfer Tax (equivalent to Stamp Duty in the UK).
1.5% of the total purchase price in court fees needed to register the change of ownership (up to a total of around EUR5,200 in case you’re buying a palace).
And naturally you are also going to have to pay the balance of the cost of the property itself. Sometimes this is paid via the notary who keeps the money in an escrow account.
Congratulations! You’ve just bought yourself a property in Poland! That wasn’t so difficult now, was it?!