Australian citizen - Inheriting studio apartment in Warsaw

24 Nov 2014 / #1

Hi there, my boyfriend (Australian citizen) is going to inherit a 31 m² studio apartment in Mokotów, Warsaw. The property is currently in his paternal grandmothers (Polish citizen) and fathers (Polish/Australian citizen, deceased) name and she is hoping to sort out what he wants to do (sell the property and inherit the money, or inherit the property) before she passes.

I have done some basic research, and understand that Australia/Poland has a tax treaty, and there is no inheritance tax for foreigners (?)

We are in our mid-20s and assume the property has a sale price of 205,000 - 235,000 PLN (70-80k AUD). I am concerned there will be hidden costs because my boyfriend is not a Polish citizen/hold a Polish passport. I am also concerned that his paternal grandmother will pass before this can be finalised through the Polish court system.

We are concerned that inheriting the property may prove a nightmare and that the tax will outway the worth of the property/any rent generated.

I am looking for any generalist advice and any greater implications that inheriting property can have.

Thanks in advance!

Monitor 13 | 1810

24 Nov 2014 / #2

Why would tax outweigh the value of the property? It's possible only if your grandma has some debts and then you would inherit debts with the apartment. And why are you afraid that your grandma will die before she passes you her flat in inheritance. To do that she has to simply write a will witnessed by a notary. Notary can even come to her house.

Moreover in Poland closest family don't pay any tax from inheritance. Grandson is considered close family:

The law on inheritance tax and gift exempts entirely from tax the acquisition of property or property rights by members of the so-called zero-tax group. This is a spouse, descendants (children, grandchildren, great-grandchildren ...), but also (parents, grandparents, great-grandparents ..), stepchild, siblings, stepfather and stepmother. Adoptive family also benefits from discount.

These individuals do not pay tax neither from inheritance or from donation - but only if they notify the fact of the acquisition of the assets to the competent tax office. For make such a statement, the entitled to relief generally have six months from the date of the tax obligation. So either 6 months from the validation of the court's decision on the purchase of the estate, or 6 months from the date of registration of a notary act of succession certification.

ksiegowosc.infor.pl/podatki/ulgi/podatek-od-spadkow-i-darowizn/88524,Najblizsza-rodzina-nie-placi-podatku-od-spadku-ani-darowizny.html

But because you're not resident of Poland, probably you will have to pay inheritance tax according to Australian law.

moniq

24 Nov 2014 / #3

I can overtake the flat ;-))