Category: business activity in the field of real estate trade

Category: business activity in the field of real estate trade

The History of Real estate and construction law

Real estate and construction law have been a crucial aspect of human societies for centuries. As the world’s population grew, so did the need for homes, offices, and other buildings. Along with this, legal frameworks were put in place to regulate the buying, selling, and building of real estate. Here is a brief history of real estate and construction law.

Ancient Civilizations

The first known legal codes regarding real estate date back to ancient Mesopotamia, around 2100 BCE. The Code of Hammurabi, which was one of the earliest known legal systems, contained laws about property and construction. In ancient Egypt, Pharaohs owned all land, and people who wanted to use it had to pay rent. Greece and Rome also had laws governing property, including zoning and construction standards.

Middle Ages

During the Middle Ages, land ownership was a symbol of power, and feudalism was the dominant social structure. The king owned all the land and granted titles to lords, who would then parcel it out to their vassals. The system was complex, and disputes over land ownership were common. Legal frameworks were developed to resolve these disputes, including the first property registry in the English-speaking world, which was established in 1086.

Industrial Revolution

The Industrial Revolution brought about massive changes in the real estate and construction industry. Advances in technology and transportation made it possible to build higher, larger, and more complex buildings. Governments started regulating building codes to ensure the safety of their citizens. In the United States, the National Fire Protection Association (NFPA) was established in 1896 to create and enforce building codes.

Modern Era

In the 20th century, real estate and construction law became more complex, reflecting the increasing complexity of the industry. Governments became more involved in the regulation of property and construction, enacting zoning laws, building codes, and environmental regulations. The growth of technology and the internet has also made it easier to buy and sell real estate and to access legal information.

Today, real estate and construction law are critical areas of practice for lawyers. They help individuals and businesses navigate the complexities of buying, selling, and developing property. They also help to ensure that construction projects comply with regulations and laws to protect the health and safety of everyone involved.

Real estate and construction law have been essential for centuries, and they continue to evolve to meet the needs of the modern world. In recent years, there has been a growing focus on sustainable development and the impact of real estate and construction on the environment. As a result, there has been a shift towards regenerative development and an expansion of legal frameworks to address these concerns.

Regenerative Development

Regenerative development is a holistic approach to development that seeks to create systems that regenerate rather than deplete natural resources. This approach recognizes that buildings and infrastructure are not standalone entities, but are part of a larger ecosystem. Regenerative development seeks to create buildings and communities that support the health and well-being of people and the planet.

Legal frameworks are critical in supporting regenerative development. For example, zoning laws can be updated to encourage the development of green spaces and the use of sustainable building materials. Building codes can be revised to require the use of renewable energy and the incorporation of green roofs and walls. Environmental regulations can also be expanded to require developers to consider the impact of their projects on the natural environment.

Expansion of Legal Frameworks

In addition to the focus on regenerative development, there has been an expansion of legal frameworks to address new challenges in the real estate and construction industry. One of the most significant challenges is the rise of short-term rentals, such as Airbnb and HomeAway. Many cities have responded by enacting regulations to restrict or regulate short-term rentals, often to protect the availability of long-term rental housing.

Another area where legal frameworks are expanding is in the use of technology. The growth of online platforms for buying and selling real estate has created new legal challenges, such as the use of electronic signatures and the protection of personal information. Legal frameworks must keep up with these technological advancements to ensure that transactions are legally binding and that personal data is protected.


In conclusion, real estate and construction law have been essential for centuries, and as the world continues to grow and change, so will the legal frameworks that govern them. As a result, legal professionals in these areas will continue to play a vital role in protecting the rights and interests of their clients.

Real estate and construction law have a rich history, and they continue to evolve to meet the needs of the modern world. Regenerative development and the expansion of legal frameworks are two areas where the industry is seeing significant changes. Legal professionals must stay up-to-date on these developments to provide their clients with the most effective legal representation. By doing so, they can help to create sustainable and equitable communities that support the health and well-being of people and the planet.

How we can help

At KPBL, we pride ourselves on our extensive experience in real estate and construction law matters. Our team of lawyers is well-equipped to handle a wide range of legal issues and transactions in this area of law.

We have a proven track record of representing investors in the purchase and sale of real estate, as well as advising landlords and tenants in lease and sale-and-leaseback transactions. Our expertise also includes representing developers in commercial and residential projects, organizing and conducting due diligence reviews, and representing clients in proceedings to obtain permits and administrative decisions in the construction process.

In addition to our transactional work, we provide valuable advice on tax-efficient and tax-secure real estate investments. Our clients can rely on us for expert guidance on the taxation of various real estate transactions, including the purchase and sale of land and buildings, as well as taking advantage of tax investment relief for residential purposes.

We also advise on avoiding income tax when selling or transferring real estate, both residential and non-residential. Our team is well-versed in recent tax laws, including the tax on revenues from real estate ownership located within the Republic of Poland with an initial value exceeding PLN 10,000,000.

At KPBL, we recognize the importance of understanding the intricacies of real estate tax. We provide comprehensive advice on whether the sale of a given property will be subject to Value Added Tax and the conditions for exemption.

Our team of lawyers stays up-to-date with the latest developments in administrative court jurisprudence and tax authorities’ interpretations to provide our clients with effective legal assistance. We are committed to representing our clients in any disputes with tax authorities should they arise.

For clients seeking official tax interpretations, we are always ready to prepare formal applications that present not only the facts of the case but also extensive legal arguments and positions. Our goal is to present the legal arguments in a clear and concise manner, ensuring a quick and favorable response from the tax authorities.

Contact us today to learn how we can assist you with your real estate and construction law matters.

Go to Real Estate and Construction Law.

VAT in relation to selling real estate plus the management of personal assets. Warsaw, September 2nd, 2021

Using a proxy to prepare a property for sale is equivalent to a business activity by the owner in the eyes of the tax authorities and is subject to VAT regulations. The position does not change, even if the buyer is the proxy. The authorities consider the seller of the property to be a VAT taxpayer even in the case of a one-off (occasional) transaction.

This position is enforced by the authorities (despite different assessments expressed by voivodeship administrative courts) even in the case of granting a power of attorney to the future buyer, who makes the purchase of a given property conditional on a change in its legal status and wants to take care of the relevant formalities himself.

During a recent case, the taxpayer defended himself by pointing out that the activities related to maintaining the status of the building plot and the request for exclusion from forest production were made at the express request of the buyer, who expected the property to comply with his requirements at the time of sale.

The property owner gave the buyer permission to perform the necessary activities on his behalf (conduct all formal and legal matters related to the entire process preceding the issuance of location decisions and building permits, apply to suppliers of all utilities to connect the planned investment to necessary networks, obtaining all decisions, resolutions, agreements and opinions in order to correctly connect the investment to the necessary utilities, etc.).

Despite this, the tax authorities found that in connection with the sale of the real estate, the owner of the real estate had become a VAT taxpayer for this one activity, which was the sale of the real estate. Thus, in the opinion of the tax authorities, the sale of real estate should have been subject to VAT.  The tax authorities also found that the owner’s activities went beyond the scope of private property management and should be considered as an economic activity in the field of real estate trading.

In the judgment of June 2021, the voivodeship administrative court did not agree with the authority’s assessment and recalled that economic activity within the meaning of the Value Added Tax Act is any activity of producers, traders or other service providers, also when the activity was performed on a one-off basis, but in circumstances indicating the intention to perform activities repeatedly.

In the opinion of the court, activities related to the ordinary exercise of the right of ownership cannot, by themselves, be regarded as conducting economic activity. The sheer number and scope of sales transactions made is not decisive, since the scope of the sales transactions cannot be used as a criterion for distinguishing between activities carried out privately which are outside the scope of the VAT directive and activities constituting an economic activity.

The situation is different when an owner takes active measures in the field of real estate trading and engages funds similar to those used by producers, traders and service providers. Such active activities may consist, for example, in preparation of the site for the installation of utilities or in marketing activities. Such activities do not fall within the scope of the day-to-day management of private property, therefore, in such a situation, the delivery of building land cannot be regarded as an activity related to the ordinary exercise of the ownership right.

According to the court, to recognise that a given person acts as a VAT taxpayer, it is necessary to establish that he or she carries out professionally, business activities in the field of real estate trading. Each time it requires checking whether a given transaction was carried out in connection with conducting business activity in this specific scope. It is not enough to state that a given person conducts economic activity at all. It must be an activity with a specific profile, because the performance of a given activity does not prejudge its taxation even on several occasions. The assumption that a given person, selling land, acts as a VAT taxpayer conducting commercial business activity, requires establishing that his activity in this field takes a professional (business) form, which is manifested in the activity of that person in the field of real estate transactions, which may indicate that his / her activities take an organized form.

When assessing the activities of the person selling the real estate, one should also take into account the activities at individual stages of the seller’s activity as a whole, and not only separately.

For these obvious reasons, in the opinion of the court, there were no grounds to recognize the seller’s activities as an economic activity within the meaning of the VAT Law.

Despite the clear and – it seems – convincing position expressed by the voivodeship administrative court, the tax authorities decided to bring a cassation appeal. This means that taxpayers selling real estate will soon be exposed to disputes with the tax authorities. At the same time, it will cause uncertainty on the real estate market and increase transaction risk.

Bernard Łukomski
Tax advisor
Tel: 608 093 541