The Polish Ministry of Development and Technology has drafted a bill to limit purchases of large numbers of flats. The new legislation is to target both individual investors and funds investing in the institutional rental segment (PRS).
For several months, the Polish government has been planning a tax on the wholesale purchase of flats. This is aimed mainly at the institutional rental funds, but individual investors, who in recent quarters have been buying flats en masse with cash to protect its value against galloping inflation, will also be affected. The wholesale purchase of flats, according to lawmakers, may limit the ability of Poles to meet their housing needs. Last week, the Minister of Development and Technology Waldemar Buda already referred a draft law on restrictions on the purchase of housing to the Prime Minister's Office.
„Package purchases result in a limited offer for Poles, for ordinary John Smiths. The average family looking for a flat for themselves is therefore faced with higher prices and less choice”, claims Waldemar Buda.
The solutions proposed by the Ministry are to apply to people and companies who already own at least five flats, at least one of which was bought in the last 12 months. In this case, if someone wants to buy another one, they will be able to do so once a year. This is to be overseen by a notary in the course of the subsequent transaction.
The second change is to increase the tax on civil law transactions (PCC). At present, it amounts to 2% on the purchase of a flat. When buying further flats - e.g. a sixth or seventh - the PCC is to be 6%.
The restrictions will not apply to inheritance, donations, a court judgment or enforcement of a liability. They will also not cover the acquisition of premises by municipalities and other entities for the purpose of social renting, nor acquisition as a result of the application of the so-called reverse mortgage or annuity. The solutions are to apply only to the trade of flats. In the case of trading in houses and land, nothing will change.
The draft assumes that „the minister responsible for construction, planning and spatial development and housing will also be able, in exceptional cases, to exempt a transaction from the conditions of the Act, if this is justified by the economic situation of the owner involved in the construction or trade of flats”. According to real estate experts, leaving such a discretionary gateway could result in corrupt situations.
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