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Building Land - Advice required

jan78 1 | 9  
18 Sep 2007 /  #1
I know countless questions get asked regarding land on this site, but I would appreciate any help regarding the following.

Upon recent visit I have been offered a parcel of building land close to where my relatives just outside Krakow. They seem to think it would be a straight forward purchase from their friend and again straight forward with the build process.

I was hoping if anyone could give me any helpful advice on:

1) what to look in to before commiting
2) if any red tape may prevent or hold up the purchase.
3) I am aware I will need a english speaking solicitor, anything else
4) are there any tax implications too.
5) could any finance be raised via a Polish bank for the build.

Thanks for any advice/help given.
jkchambers 3 | 33  
18 Sep 2007 /  #2
Each area should have its development plan. If you look up the folio it will indicate what can be built on the land. Krackow itself is an exception as its development plan is out of date and you have to start the planning process from start. Your area outside the city may have a current development plan.

You cannot purchase land if you are a UK resident. You will need to set up a Polish Limited Company and have a local involved.

If you email me seperately by clicking on the line under my profile I will send you details of a good English speaking solicitor.
There are tax implications. A bit of planning can minimise these.
Finance can be arranged. Banks will give from 50% to 70% for site purchase depending on location and building experience. You shouldnt need development finance as you can use purchasers off plan booking deposits. Normally you get 10% on exchange of contracts followed by another payment of 30% within one month. You get to use this money unlike in the UK.
18 Sep 2007 /  #3
I'm assuming that you've done this kind of thing before so have a good grip of the building and construction management process, so my advice based on my experience doing similar things so far (on a small scale):

1) Check whether the land is designated as a building plot (budowlana) or agricultural (rolna). Depending on which it is will considerably alter the value and the time your project is going to take. If it's a rolna plot then talk to the local authority about the chances of getting it redesignated. Also check if there are services (water + sewerage, gas, elec) to the plot and if not, how many other people's plots it's going to have to go through, who the owners of these plots are and whether they have registered addresses. They don't have to agree to allow you to cross their land and I know of a number of projects that are held up for years because an owner/co-owner can't be found to give consent.

2) There's a restriction on how much land/area a foreigner can buy. If you go over the limit, you will need permission from the ministry of the interior and you should allow at least 3 months for this. You can make this a condition of the pre-agreement.

3) There are quite a few English-speaking solicitors in Krakow so you won't have a problem finding one but strictly speaking you don't need one - it's the notary who does the deal. If you don't speak Polish the notary will need to have a court-registered translator present at the transaction.

4) You don't say if you are UK resident but if you are, you'll have CGT to worry about.
5) Getting finance is long and life sapping process. It took our company over 3 months, there was only 1 game in town, they were completely risk averse and they wanted to know the most ridiculous amount of detail. They'll want to see that your business plan can absorb at least a 30% increase in building costs.
OP jan78 1 | 9  
24 Sep 2007 /  #4
Thanks for the replies.

JK - I will drop you a line as requested in your post and I have a couple of other questions you maybe able to answer.

In Krakow - Thanks for your advice it is much appreciated. Again I may have a couple of questions regarding a couple of your points and will be in touch via email soon.

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