Real Estate / Private investors in Poland to sell a property [6]

I've purchased two properties, a house and an apartment, directly through the sellers. It didn't involve too much more work than when I've used estate agents (this is on the purchasing, not selling side of the transaction), but you do need to have confidence in the notary you are using. Overall it probably saved us about 5-6% on the deals ((our 2.5% agent fee + the sellers 2.5% agent fee)*22% VAT).

As a seller, I see little benefit in cutting out the estate agent. You can negotiate their fee and terms upfront and use multiple agents to find you the best buyer on the market. If an estate agent is not used, the purchaser will try hard to negotiate that savings away from you.

Adrian, can you tell me a little more about the property; region/city, size, condition, price? Poland is a big town; you won’t be giving away any secrets. :-)

Real Estate / Article: Budimex calls for stagnation in 2008 residential property market [8]

I think I wasn't clear enough in my summary of the article. (I'd post the whole thing, but it's against the forum rulles): Budimex expects a stagnant period of 1-2 years on the residential market. They believe they are well prepared to weather this period, but may decide to hold back on some new projects. However, they expect that this downturn will have a more serious impact on smaller developers: " "The year 2008 could be difficult for some developers, especially smaller ones which were aggressive in buying grounds." "

So if Budimex is correct, that there will be an over-supply of new build apartments in 2008 - 2009, what will this mean for the many investors on this forum who have recently purchased or put down deposts on flats to be completed in the next 24 months?

Will they see some projects that they have already placed deposits on come to a halt? Will they have trouble getting those deposits back in a reasonable time frame

When these projects complete will the flats be worth less than what they paid for them?

Real Estate / Article: Budimex calls for stagnation in 2008 residential property market [8]


I wonder if that will be the case. I live 30 kilometers outside of Kraków. The local market for flats is now just finally taking off as so many people have been priced out of Kraków. If Kraków were to become more affordable over the next 12 months it could be bad news for the small local developers.

It will be interesting to see how this all goes down. The economic news out of the US gets worse by the day, and now it seems that there is very little support for the Asian decoupling theory. What's bad for the US will be bad for Poland.

Fundamentally I think the housing market in Poland is sound; domestically driven, still a shortage of housing, credit is not (nor was ever) easy to come by, a booming economy, remittances from abroad, pro-business government, dramatic wage inflation in the private sector, strong currency.

However, I am a bit skeptical of all of these off-plan projects due to complete in the next 24 months across all of the major cities. If the "foreign" investors decide en masse to take their chips off the table at the same time it could be very interesting. Just look at Miami.

Real Estate / US tax obligations on Polish real estate [2]

Mariola, The situation is pretty much the same as if the property was in the US. (read IRS publication 527). You should keep hold of all receipts, invoices, contracts, etc regarding expenses and income for the property. You will report all income on schedule 1040E, and will only be asked to produce that documentation if audited by the IRS.

Of course you will need to do the same thing when declaring the income for the Polish tax authorities (except on a monthly basis). If you are using a Polish accountant to do this, then they will insist on keeping the originals of all of theses documents. That is fine, make copies for yourself, and if you are audited get the originals from your accountant.

All the same rules apply in terms of expenses / repairs / improvements / deduction of mortgage interest. However, you must depreciate by the ADS method (40 years) not GDS. Everything must be converted to USD in the year of the transaction. (If you have taken out a non-USD mortgage you need to be aware of a few more things)

Sale of the property – You should have already established a depreciable basis for the property when reporting your rental income. You should have the original notarised Polish Contract for the purchase to back this up (as well as proof of any costs incurred during the purchase, and cost of improvements). When you sell the property you will have a copy of the final contract which shows the sale price. That’s all you need. (Unless you took out a non-USD mortgage)

I’ve had no luck finding a Polish accountant who can appreciate what is required of US tax payers. I am using an accountant in Krakow for my Polish taxes, and keep a copy of everything for myself to do my US taxes. I’m quite happy with the job they’ve been doing and if I ever need a copy of anything they are quick to post it over.

Oh yeah, I'm not an accountant or tax advisor. Otherwise I would be asking you for your first-born for the above information. Don’t take my word. Read the IRS publications, and call the IRS help lines if in doubt.

Law / Does anyone have experience of getting a karta pobytu from Krakow? [13]

I did this in Kraków last summer, it wasn’t too painful. Without any problems the process should take about a month.

As an EU citizen you will need to apply for a “ZAŚWIADCZENIE O ZAREJESTROWANIU POBYTU OBYWATELA UNII EUROPEJSKIEJ”, not a „KARTA POBYTU CZ£ONKA RODZINY OBYWATELA UNII EUROPEJSKIEJ”. The latter is for non-EU family members of a Polish citizen.

My recollection of the process is:

1.) I was temporarily melded locally
2.) My Polish wife called up the office in Krakow (the local melding office gave us the direct number). The person in Krakow directed us to a website where the application forms are located. I filled out 2 copies of the forms (they are in Polish and English)

3.) I brought the forms and my Irish passport to Krakow. (I don’t remember if I also had to bring the Polish version of my marriage certificate) The office had a queue of about 200 people going down the street. This is not the right queue; push your way through the door (Polish style; throw your shoulder into everyone, don’t apologize). The office is on the first floor. I waited about 30 minutes.

4.) Submit the forms, sign a few papers, (have a few photocopies of your passport with you, otherwise they will send you back outside to hunt down a “ksero”). They told me to call back in 30 days to confirm all was okay and then I could come and pick up my Karta.

5.) During those 30 days the office is supposed to ensure that you are not a threat to national security by checking with the Interior Ministry, the Polish Police, and your home country police. In my case the local Police showed unannounced at the door one day. They had a list of questions that my wife translated. Mostly to do with work and education experience. (which in some way is used to evaluate what kind of threat you pose to Poland)

6.) I get a letter in the post to call the office. For some reason my Irish passport does not list the city of my birth, and they did not pick up on this when I first presented my passport. This rocked their world! There was no-way that I could get a Karta without this. I had to go back to Krakow with other documents proving my city of birth.

7.) Two weeks later I get a letter in the post. Come pick up your Karta, and bring 1 zloty with you. I had to wait about 30 minutes again to get the card. When I get to the desk they already had my "file" right there with them; a folder with my name on the front and about 15 pages of paperwork inside. Creepy! I tried to get a peek at the contents, but they were having none of it.

8.) I then bring my new Karta to the local melding office so I can now be permanently melded. They have no idea what the Karta is and we had to get the office from Krakow on the phone to verbally abuse them before they gave me my permanent melding, which is just a tiny slip of paper with a stamp on it. No ID cards for foreigners.

...and one more thing. I read an article recently in which Mr. Tusk promised to get rid of the whole melding process by close of 2008 as it is just pointless bureaucracy. Maybe I misunderstood the article though?

Law / Financing in Poland [12]


Zoogle, thanks for the laugh. I don't believe there is any process in Poland for which the expression "and off you go?" applies.

Certainly it is far more difficult to obtain a Small Business loan in Poland than in NA, but not impossible. Right now is not the best time to be looking for such a loan, due to the global credit crunch and the acceleration in interest rate rises on PLN. (don't believe anyone who tells you that Poland is not indirectly affected by the credit issues in the US)

Additionally, it is very difficult for a self-employed non-Pole to receive any credit in Poland regardless of how good your credit history is, or how good your business plan is. You may actually find it easier to obtain a loan in USD from NA, with better terms, for setting up a business in Poland. With a depreciating USD, this could be your best bet.

Law / Financing in Poland [12]

Property development is always about creative financing, but I suggest 2 basic ways of financing such a project:

1.) Find a partner with equity prior to purchasing the property, somebody with a big enough bankroll to finance the purchase and development and willing to part with their cash for 2-3 years while the project is realized. You would need to give up a significant stake in ownership and control. I don't think you would be able to find a bank in Poland to finance this way, just private equity.

2.) Buy the property yourself, get planning permission, put together plans with an architect and then sell the apartments "off-plan". Use the staged deposit money from the buyers of the apartments to fund the development.

My thoughts on this particular property:

The price/sqm seems amazing, and I can see why that may make it look tempting at first glance. But what would you do with the property? Factory / Manufacturing? - No, it is 1940s architecture w/ infrastructure unsuitable for modern production. Warehouse / Distribution? - No, it is in the middle of the sticks with no major road infrastructure. Hotel? - No!

Okay, so 3000sqm of apartments like the Advert suggests? Purchase + Project/Planning + Renovation/Building + Sales/Marketing = a minimum 1500zl/sqm. So what would an apartment sell for in Żagań? About 1500zl/sqm. Would the local market be able to absorb 60 new apartments? Probably not. Profit = 0 zloty and you are stuck with 50 unsold apartments.

Bear in mind that many regions of Poland are deeply impoverished and rapidly de-populating. If Germany is any lesson, these regions are unlikely to change soon. Read this article from the weekend about German poverty:

news.yahoo/s/afp/20080310/lf_afp/germanyeconomydemographysocial_080310032444

I think that even if you were given the building for free you would be unable to make a profit turning it into apartments. There may be something creative things you could do with the property without investing any more cash in it? Film production? Artist studios? If you could rent the entire building out for 5000zl/month you would have a very comfortable 10% yield after covering costs.

Sorry for being so negative, but right now the property market in Poland is just a story of cash chasing cash. There are certainly deals out there, but you may be best waiting on the sidelines for a few years.

Real Estate / Buying land in Bochnia (near Krakow) in five years... [6]

It really depends on how close you want to be to Bochnia, and whether you want land for building, agriculture or recreation.

A plot zoned for building within 400 meters of the rynek will cost about 1000 -1300zl/m2. Within 2 kilometers from the rynek will cost you about 125 - 300zl/m2. The next "ring" out of about 2-5km will cost about 50-100zl/m2. After that, you are into the different outlying villages and can expect 30-50zl/m2, or cheaper. All of these prices depend on access to gas/water/sewage/electricity/etc.

Having said that, you will be very hard pressed even today to buy anything within that 5km zone as it seems that every plot is already a building site, with very few plots listed on the market. I can't imagine that there will be much left in 5 years time.

I both agree and disagree with HELLO's comment about the prices going down in 5 years. On one hand, you will have missed out on any opportunity central to town, on the other hand, I don't think that plots in the outlying villages will retain their long term value. This isn't the UK or Ireland. There is plenty of land, and people are leaving the villages in droves.

However, Bochnia will be directly connected to the new Autostrada A4 (directly in to town) by the UEFA Euro 2012, so things could be a bit frantic in Bochnia at about the time you are looking to buy.

Bochnia has become very trendy over the last 2-3 years with young professionals raising families outside of the city. It is a good sized city with access to shopping/services/good schools/etc. The express train will get you into the centre of Krakow in 30 -35 minutes. The A4 will only make it more attractive.

Try this link (just type in "Bochnia" in the "Miejscowość" field):
gratka.pl/dom/dzialki-grunty-sprzedam

Real Estate / Managing Buy-to-Let Properties in Poland [27]

Maybe this is what your advisor was talking about:

"CEE Property Group has simulated rental investment in Poland, assuming 100 percent mortgage finance. The rent will fully cover the monthly capital installment provided the loan is denominated in Swiss francs. It will also cover maintenance and taxes in cities like Wrocław, Katowice and £ódź. The monthly interest payment is treated as the investor's sole contribution. Once the mortgage is paid off, the investor will own the apartment after paying only zl.200-400 per month."

Real Estate / US Citizen with Polish spouse buying in Poland? [6]

Short Story:
Your Polish spouse - can buy whatever she wants
You - will need a permit for apartments (simple process) and will not be able to buy a house unless it becomes your permanent residence

Process - get pre-approved by Polish bank for mortgage, find a property, get permit, go to notary, bring translator, sign the papers. If you are not a cash buyer then you will probably do a pre-contract and later the final contract.

Mortgage - if self-employed will be impossible for US resident. Otherwise if good stable documented source of income then you will go through a long arduous process with the banks and should receive the credit.

Suggest you get pre-approved for mortgage from the US (may take a few months) and then travel to Poland for the purchase. Expect to spend a few weeks in Poland if buying with mortgage.

You should not jointly buy any property with your non-US citizen spouse for IRS estate purposes, no matter if it is in the US or abroad. She will pay inheritance tax from the first $1 if you are hit by a bus. (Consult a lawyer) So if the property is purchased solely in spouse's name, then the process is simplified on the Polish side, but you will need to be careful of gift-tax if you are helping to fund. If bought solely by you, again no problem, you just need the permit.

Real Estate / US Citizen with Polish spouse buying in Poland? [6]


Ok, that is a different story. Foreigners cannot buy land before 2012. The exception is up to a total of .5 hectare (1.25 acre) of land for residential building purposes. Agricultural and forest land is out of the question. Your Polish spouse should be able to buy any land she wants, but not the 2 of you jointly.


It is very difficult to get a mortgage in Poland for pure land. So typically if you find a nice plot of land to build a house on you must pay for the land in cash, then get the mortgage to build a house. So make sure that the UK mortgage will allow you to buy land.


Try gratka.pl/dom

Permit process - for the apartment / house permit it should not matter that you are not resident. Pretty much just a formality

Estate Agent - Poland is a big town. What region are you planning to buy in? If you are still serious about buying land, you may want to contact these guys: plotspy.pl I have never used them, so I can't vouch for them.

Good Luck

Real Estate / Poland top overseas property hotspot [29]


To me


10 zł


Because 10zł is a really good deal

Real Estate / Global Housing Collapse Spreads East [8]


I second eleanoroconner on this. Property markets are cyclical. Over the past 2 years all first – third tier cities in Poland have seen increases of 50 -100%. Proclamations of boom and bust are easy. Genius is in the timing.


Crash? Really. I’ll eat my shorts if we see that. A crash would be the result of a gross over-supply of housing units (ex. Ireland, Arizona, Spanish coasts), or a significant number of owners in negative equity that were unable to meet their mortgage payments (US Subprime – Detroit, Ohio, etc). The first instance clearly does not apply to Poland and the second instance is extremely unlikely as Polish lending standards are tight, very few owners are in negative equity positions, and strong wage growth should compensate for rate increases in PLN / EUR / CHF during this period.


Only 2% of Polish exports are to the US. US FDI is a component of the Polish economy, but not significant. What could be significant is the effect of a US slowdown in tempering the global commodities surge. My sentiment is that the biggest story in regards to the direction of the Polish property market over the next 36 months is the cost of building materials. The Tusk government has already suggested that they will need to start importing cement from China in order to utilize all of the billions of EU funds and to meet Euro 2012 obligations in infrastructure upgrades. Can you imagine being a small developer in Poland in 2 years times trying to get hold of concrete, or iron re-bar?


I suspect you are right, but scare campaigns are based on rumours and fear-mongering. Can you name these Developers?


There is probably some truth to that. Can you share the names any of these developments?


Indeed. If you take a broad look across the major Polish cities from 4/2007 – 4/2008 you will see a 5% drop in prices. From 4/2008 – 4/2009 I forecast flat prices. From 4/2009 – 4/2010 a few percentage points increase. During that period Poland will have seen 12-15% compounded inflation, IMHO. So a drop of 10 – 15% in inflation adjusted terms. This would be called a “correction”, not a “crash”


A win-win!

No doubt the next few years will be tough on the Polish property market, but good investing is about doing better than the mean. Do your homework, stick to the fundamentals and buy what is undervalued or what you can add value to. If you don’t believe in Poland in the mid to long-term, than get out now. Otherwise keep an eye on inflation, commodities, the zloty, GDP, FDI, wage growth, employment figures and invest accordingly.

Real Estate / Legal question about Real Estate and Protocol zdawczo Odbiorczy, help [3]

Am I missing something? You would like to paint / tile / floor an apartment that does not belong to you (as you have not signed a final purchase document).

I am sure that it must be legal, but certainly not wise. (you can paint and tile my house as well, no problem). What if something were to extensivley delay the hand-off of the apartment? What if someone were to destroy / damage your new installations prior to hand-off.

Right now you have the upper hand in this. You owe the developer money, and he is not getting it until he delivers the apartment/building to you in the spec agreed in the contract. Once you start throwing your own, un-recoverable, cash into the Developer's Apartment you are at a serious disadvantage.

Real Estate / Market Report - RICS 2008 Poland Housing Review [25]

I'm somewhere in the middle on this. The RICS report is backed up by a lot of data, and it does a thorough job of covering all of the key inputs and influences on the market. I haven't come across a better assessment in English. Combine this with the RedNet Reports, Szybko Reports, independent advice, and current macroeconomic data (see recent concerns from central bank about strengthening zloty) and develop your own opinions. Do your own homework!

RICS is a well respected institution and I don't believe that the report is biased one way or another. However, forecasting housing markets is not an easy thing. So much of it is driven by sentiment, not rationality, and as property is not nearly as fluid as bonds or equities these sentiments take a long time to work through. As the RICS report pointed out, market psychology led many people to continue to buy as prices seemed they would go up forever. The same could happen in reverse due to the high number of foreign speculators on the market, who are not just speculating on Polish property but also the zloty.

I think alligator_s is spot on. Falling prices for the next year or so on new builds, a stand-off in the secondary market with sellers reluctant to accept the new math, and a lot of small developers will go under. And perhaps a few opportunities on deals from nervous investors cashing in on the zloty, especially if the central bank ends the rate hikes.

Another read from the Polish side of things: warsawvoice.pl/view/17325

Real Estate / Market Report - RICS 2008 Poland Housing Review [25]


I'm not so sure that you are interpreting the graph correctly. It is strictly mapping the acceleration of asking prices , by developers, on new-build apartments in Krakow and Warsaw. They appear to only have one reading for each year. In 2006 it was Q2, and in 2007 Q3. So the chart shows that between July 2006 and October 2007, the asking price on off plan apartments in Warsaw declined by about 15% points (53-28 points).

As RICS stated, the quality and quantity of data that they have to work from is poor. The 15 month spread is no help either, as it does not show when prices started to decelerate.

I haven't seen anyone else with comparable data. What I have seen from Szybko and Rednet is data on the Selling Price of the primary and secondary markets, which is not an accurate snapshot of the market. For example, if I bought an offplan apartment in 2006 in Warsaw for 6500zl/m2, the final contract would be signed in mid 2007. This distorts the data, as there is no way in mid 2007 you could buy something comparable at 6500zl/m2, but Rednet and Szybko would let the 6500zl/m2 influence their Q2 2007 numbers.

It is arguable if measuring the market by looking at asking prices is any better, but it is a different way of looking at the market, and is just another way for an interested investor to get a handle on what is happening.

Perhaps I am reading the RICS data wrong, but it seems that it could not be too far off target. I wonder if it is inflation adjusted as well?

Real Estate / Market Report - RICS 2008 Poland Housing Review [25]

Good point. Has anyone else noticed that RedNet have yet to release a Market Report for April 2008? They've been pretty reliable on these things month-on-month for some time.

If their numbers for April are particularly bad, it would be in their best interest to just not issue a report. RedNet and their friends at Property Secrets have brought a lot of speculators into the market who are still locked up in offplan deals that have yet to complete.

We'll have to wait and see. I don't know of anyone else issuing monthly market reports in Poland. Anyone?

Real Estate / Poland Property Boom Spills Over to Poorer Neighbouring Country - GERMANY [39]

And another article with the same theme:

"For us it's cheap here."- Polish assessment of Germany

"The price of real estate in Loeckwitz, 25 kilometers away, is also creating a lot of interest on the other side of the border. Some 200 of the town's 3,000 inhabitants are Polish citizens.

Project manager Jan Rybski moved here a year ago from Szczecin. He is currently overseeing the development of a "German-Polish settlement" targeted at middle-class Poles from nearby metropolitan areas as well as German retirees looking for the quiet life."

dw-world.de/dw/article/0,2144,3342041,00.html

Real Estate / Market Report - RICS 2008 Poland Housing Review [25]

andy b/ LondonChick, Thanks for the links.

The Interfax Real Estate rerport is handy, but a subscription is £595 Annual. Take a look at the REAS Market Review reports (monthly /quarterly / city based). Most are free and very good. reas.pl/publications.html


Please see yesterdays WBJ article: "Decelerating Demand - Poland's residential market has entered a period of relative stabilization after three years of rapid growth. The supply of new homes has outpaced demand, making it unlikely that the market will see new home prices accelerate again in the near future"

wbj.pl/?command=article&id=41232&type=lim

And take a look at the late REAS Q1/2008 report which predicts a growing supply of exposed units on the market and a growing supply of completed yet unsold units well into 2009

Real Estate / United States Tax Laws for sale of property inherited in Poland [10]

Ben, You are a US citizen, correct? You are therefore taxed on your worldwide income by the IRS, and will need to pay long-term capital gains tax on the sale of the property (currently 15%). This will be offset by any tax you pay to Poland on the sale (perhaps none).

You may have difficulty assesing the capital gain on the property. Normally (in the case of US property), some sort of assessment would have been done for the tax return filed by the estate to the IRS when the property was inherited. A value to the property would have been assigned at that time. Your situation may be different, unless you inherited the property from US citizens. It may be the case that the Polish notary act that gave you title to the property has a value that the IRS will find acceptable.

I think you have a fairly straightforward case on the IRS side of things. Any family / estate planning lawyer should be able to sort you out.

good luck

Work / Course on Polish Taxation [3]

I have not heard of any, but a few points:

1.) get a better accountant
2.) Download the E&Y reports, which will give you a good high-level view of the tax situation for personal income and rental income:

ey.com/global/content.nsf/Poland_E/Publications_-_Doing_Bus iness_in_Poland_2007

ey.com/global/content.nsf/Poland_E/Real_Estate_-_The_Polish __Real_Estate_Guide_2008

3.) See point no. 1

Real Estate / Expected Rent in Białołęka [2]

Your competition is here: dom.gratka.pl/mieszkania-do-wynajecia/lista/,warszawa,bia%B3o%B 3%EAka,2,50,60,2,dz,lp,mo,md,s.html

Those are just the asking rents, so they just reflect the hopes of other owners. The latest Szybko report (Q1 2008) says that the average rent for a 2-room (1 bed) apartment in Białołęka was 1571zl. The average selling price for a 2 room was 7367zl/m2. So all thinge being equal, about 400,000zl for your apartment.

Of course all of these numbers are market averages and do not reflect your exact situation. The market is very sluggish right now and you may have difficulty offloading your apartment for the next 12 -18 months.

Of particular concern is the latest REAS / Gazeta report which advises that prices for new off-plan apartments on the primary market in Warsaw are actually 10 - 20% cheaper than those completed in 2006 - 2007 and now placed on the secondary market by speculators attempting to cash out.

dom.gazeta.pl/nieruchomosci/1,73497,5310123,Upusty_cenowe_na_ry nku_wtornym.html

Law / Coal Alternatives in Poland: The new electricity market [21]


See the following article from Interfax, "Poland may have much more gas than confirmed 100 bln cm owned by gasmonopolist PGNiG":

Regarding solar, my plumber was pushing me to install solar hot water (not electric) in my house in Małopolska and gave me a lot of brochures from a Polish company that would supply the panels and related hardware. At that time, 2 years ago, it just didn't make sense - a 10 yr payoff. If the price of gas continues to accelerate, I may need to rethink, or take shorter showers...

Life / Electrical heating vs central heating in Poland [9]

See the following:

polishforums.com/tips_on_renting_apartment_poland-45_27993_0.html

Life / Deadly Roads - "Are polish roads really THAT dangerous?" [139]


More like 100 per week:

And here is a "list of countries by traffic-related death rate":

en.wikipedia.org/wiki/List_of_countries_by_traffic-related_death_rate

Poland does not show its death rate per kilometer driven. I imagine this number is through the roof (there must be a more sensitive way to phrase that) as there are so few roads in Poland and car ownership is stil relatively low. I read something somewhere a few years ago that had Poland with the highest death number of deaths per km driven in the world, second only to Russia.