Permission of the Ministry of the Interior of Poland to Buy Property: Everything a Foreigner Needs to Know

Over the last five years, the number of foreigners who have obtained a permit to buy property in Poland has increased by 43%. This fact indicates the growing attractiveness of the Polish property market for foreign investors and expats. However, the process of buying property in Poland for foreigners has its own peculiarities, and professional advice is essential. That is why we turned to market expert Galina Kharlamova for answers.

Ministry Permission to Buy a Property: When is It Required?

— How can a foreigner buy an apartment or a house in Poland? Are there any nuances in the legislation that one needs to know about in advance?

— Before buying real estate abroad, you should understand that each country has its own specific legislation that regulates this process. In Poland, there is a law on the purchase of real estate by foreigners (Ustawa z dnia 24 marca 1920 r. o nabywaniu nieruchomości przez cudzoziemców). Leaving aside legal entities, foreigners are citizens of countries outside the European Union and those who do not have Polish citizenship. 

According to law, a foreigner who wants to buy real estate in Poland must obtain a permit from the Ministry of the Interior and Administration with the consent of the Minister of National Security, and in the case of agricultural real estate also with the consent of the Minister of Agriculture and Rural Development. It turns out that a foreigner who wants to buy a house on a plot of land, a plot of land, a commercial property, or a townhouse needs a permit from the Ministry of the Interior. The purchase of apartments is not restricted, but there are certain nuances.

Let me elaborate on the purchase of an apartment, because this is the most common request. When a buyer buys an apartment in a multi-apartment building, he also buys a part of the land on which the building stands. In this case, the foreign buyer does not need a permit from the Ministry of the Interior. 

However, there are situations where the developer, while building the house, has also built a road next to this plot, or it is a large residential complex and there are internal roads. In this case, the buyer purchases not only a apartment with a part of the land but also a part of the road. The road is a commercial property, which means that it requires a permit from the Ministry. You have to be very careful if you buy a flat on your own because, in this case, you will not be able to register the ownership of your property with a notary without a permit from the Ministry.

Just recently in my practice, I had a case where a property was listed as a lokal mieszkalny (apartment) in the sale-purchase contract, and it seemed that no permission was required. But in the seventh paragraph it was said that together with the apartment, for 123 PLN, a part of the road was sold, and the buyer was obliged to buy it and thus get the permit of the Ministry of the Interior for its purchase.

Note: European Economic Area (EEA) and Swiss nationals are exempt from the need to obtain a permit for most types of property, with the exception of agricultural land and properties in border areas. And UK nationals must obtain permission on a general basis from 1 January 2021.

— Why do I need a permit? What does the Ministry of the Interior check? 

— The first thing the ministry will check is if such a purchase is not contrary to the country’s geopolitical or strategic interests. In Warsaw, as a rule, there is no hitch at this point: this is not a border area, and there is no access to the Baltic Sea or other strategically important facilities. Therefore, everything goes smoothly here.

The second thing the Ministry checks is whether the buyer has a connection with Poland. And this is where the majority of questions arise, but not from the government but from the buyers. Customers mistakenly think that they have to prove family ties to Poland at this point, but in fact they do not. Today, in order to prove a connection with the country, it is sufficient to live here for more than six months, work officially, have a permanent source of income, and prove all this with a residence card (temporary or permanent residence permit). 

Note: foreign legal entities are also subject to the law on acquisition of real estate by foreigners. There are additional requirements for them, such as providing financial statements and proof of legality of operations in Poland.

Peculiarities of Buying Townhouses by Foreigners

— Townhouses are quite popular among buyers in Warsaw. Are there any peculiarities when it comes to foreigners buying this kind of property?

— A townhouse is essentially a residential building consisting of several multi-level apartments, usually with a separate entrance for each. In Poland, there are two legal forms for registering such property: 

• House in a bliźniak or szeregowiec (dom w zabudowie bliźniaczej lub szeregowej). This usually applies to houses with two or more flats. In this case, a townhouse is registered as a house with a plot of land in ownership, and a permit from the ministry is required for its purchase. Such terraced houses are separated by two walls.
• Lokal mieszkalny. In this case, it is essentially a two- or more-apartment building. Townhouses have a common wall, and each purchaser is buying an apartment. A permit from the Ministry of the Interior is not required here.

Externally, these townhouses do not differ in any way. In order to understand whether you are buying a lokal mieszkalny or a bliźniak or szeregowiec building, you need to read the legal and technical documents. 

Many clients before contacting our agency are not aware of this possibility and do not even consider buying a townhouse. Most often people have heard somewhere that it is obligatory to have the permission of the Ministry, but in fact it turns out that this is not always the case. 

More and more often, however, buyers of real estate in Poland are citizens of Eastern European countries, and local developers have been on time to orient, making townhouses as multi-family housing. As a result, segments of townhouses are, on paper, apartments, but in reality they are actually part of a detached house with a garden plot.

Reasons for Refusals of Authorisation

— Have you ever had a refusal from the Ministry to allow a foreigner to buy a property?

— A foreigner may receive both a refusal and a permit from the Ministry to purchase real estate in Poland. But for a positive decision, you need to be clear about what kind of documents you need to prepare. We have been working for many years with a lawyer who knows by heart «in alphabetical order» the entire list of documents. 

It is important to understand that the Ministry gives not a general approval, but a specific approval for a particular property. In other words, the buyer must first sign a preliminary notarial sales contract, pay a deposit, and then apply for a permit. In case of ministry refusal, the deposit is not returned to the buyer, and this is a big risk for him. That is why in our agency, before signing the preliminary contract of sale, we hold a consultation with the very lawyer who preliminary checks the availability of all necessary documents. This ensures that our clients’ money is safe.

In my practice, there was a case where the buyer decided to save money on a lawyer and get this permission himself. And it is indeed possible, but there is one nuance: the Ministry of the Interior has the right to respond within two months from the date of application. And, for example, if any document is missing, the Ministry asks for it to be sent in a separate letter. As soon as the buyer sends it, the Ministry of the Interior’s response time is reset, and they again have two months to respond. 

In the end, in that situation, it took the buyer about six months to get the Ministry’s permission to buy, and the seller was not happy about this state of affairs, to put it mildly. Imagine if you were selling an apartment and found a buyer, but the transaction took six months.

Let us summarise the above in the form of an illustrative table:

* EEA and Swiss nationals do not need a permit (except for agricultural land and border areas).