Month: November 2023

Month: November 2023

Transfer tax: changes in purchase of real properties

As of August 31, 2023, there is no longer a transfer tax (abbreviated as PCC in Polish) on the purchase of a first home on the second-hand housing market. Typically, the transfer tax for civil law transactions is 2 percent of the real property price, and in the case of a sales contract, it is paid by the buyer. This relief now exempts the purchase of a second-hand home from this transfer tax.

Under the new regulations, the acquisition of the following is also exempt from transfer tax:

The ownership of a separate flat

The ownership of a single-family residential building

The cooperative member’s ownership of a residential property, either a flat or a single-family residential building.

These new regulations apply exclusively to individuals who did not previously possess the aforementioned rights, or had a share in these rights that was 50 percent or less, unless it was inherited.

Changes for Investors:

Starting from January 1, 2024, there will be changes for individuals investing in real property. Specifically, the tax rate on a contract for the sale of the sixth flat (or subsequent flats) in the same building(s), or an interest in such a flat, with the same buyer, will be 6 percent. This applies when the buyer:

Acquires at least six flats that are separate real properties in one or more buildings on the same land, subject to VAT, or shares in such flats

Has already purchased at least five such flats or shares in them.

Consequently, the purchase of the sixth flat (and each subsequent one) will incur a double tax – both VAT and a transfer tax of 6 percent.

Real Estate And Construction Law

Our services encompass a wide range of real estate transactions and legal matters, including:

  • Assisting investors in buying and selling real estate properties.
  • Providing representation for landlords and tenants in lease agreements, as well as sale-and-lease back transactions.
  • Representing developers in both commercial and residential projects.
  • Arranging and overseeing due diligence reviews.
  • Advocating for clients in proceedings to secure permits and administrative decisions during the construction process.
  • Offering guidance in structuring and financing documents for diverse investment projects.
  • Advising on and defending against restitution claims.
  • Providing counsel on the corporate aspects of all transactions.
  • Offering expertise in construction issues, both contentious and non-contentious, along with matters related to land use, planning, permitting, and environmental concerns.
  • Crafting and negotiating various agreements and documentation essential for the investment or construction process.

PEPP – pan-European Personal Pension Product

The pan-European Personal Pension Product, known as PEPP, officially became law on September 26, 2023. PEPP is a European pension plan designed to offer supplementary income in addition to both the state pension and its associated support structures.

Who is Eligible?

Any individual residing within the EU can take advantage of PEPP, regardless of their employment status. This includes individuals who are unemployed, on maternity leave, or currently enrolled as students. Participation is voluntary, allowing anyone to join and contribute funds, up to an annual limit set at three times the average monthly salary in the national economy per year.

Portability Across the Union

PEPP is portable across the entire European Union. This means that individuals who change their place of residence within the EU can continue to contribute to the PEPP account they originally opened in their previous country of residence. Simultaneously, these individuals retain all the benefits associated with ongoing investments in the same product. It’s important to note that only one saver can accumulate savings in a PEPP account, preventing the option of opening a joint PEPP sub-account, such as for spouses.

PEPP Providers

PEPP will be offered in all EU member countries by financial entities authorized to create and distribute PEPPs. These providers may include institutions such as credit entities, insurance firms, pension companies, and investment firms. Any provider wishing to offer a PEPP must undergo a registration process. Once registered, the product can be made available and distributed throughout the EU.

Tax Advantages

PEPP savers will be exempt from personal income tax under specific conditions. This exemption is available to those who:

Do not withdraw their accumulated savings until they reach the age of 60.

Become eligible for retirement, are at least 55 years old, and have been PEPP savers for a minimum of five years.

Have contributed more than half the value of their PEPP contributions no later than five years before their withdrawal request.

Tax Lawyer – Poland

The law firm of Bernard Łukomski has in-depth knowledge and expertise in national and international tax laws and we advise our clients in all aspects of personal and corporate income taxes, VAT, excise duty, transfer tax, stamp duty, real estate tax, tax disputes, social security, and fiscal criminal law. We can help you to manage tax control cases in addition to managing tax litigation cases including challenging tax liability decisions and dealing with tax authorities, tax administrative courts and the Supreme Administrative Court. Receiving the correct tax advice often reduces transaction costs and can avert serious penalties and consequences.