Poland Property Market
Poland is without doubt the rising star of the Northern European property scene, with prices rising by 33% in 2006 alone.
Most EU Accession states have benefited from similar influxes of investor capital in response to their developing economies, but none seems to have profited as well as Poland.
The factor that most marks Poland’s property investment landscape is its stark undersupply, which is particularly acute in Warsaw. The fact that demand continues to far outweigh supply has been a major contributory factor in the price rises seen over the last two years. This has led to an influx of UK and Irish property investors attracted by Poland’s low entry point and the promise of excellent capital growth, which in turn has added to the upward price pressure.
One consequence of this has been that Polish homebuyers are increasingly being priced out of the property market, which has led to new growth in the rental sector.
All of this buoyancy in the property market is underlined by the fact that Poland is one of the true economic success stories of the post-Soviet era. Poland has been both politically and economically transformed since 1990, having joined the EU in 2004, and is scheduled to adopt the Euro in 2012.
The private sector is thriving, creating over 300,000 new jobs in 2006 and exports have doubled since 2002. Consumer price inflation is low at just 1.0% (one of the lowest in the EU) and inward investment is accelerating: $10 billion in 2006 alone. Major foreign employers in the IT, electronics and automotive sectors are moving into the country, and Poland is scheduled to benefit from up to $80 billion worth of EU funds between 2007-2013.
Property Tax in Poland
New residences are subject to VAT at 7%
There is a 2% acquisition tax on second hand property.
Corporate Income Tax (CIT) of 19% if property is a company asset.
CIT on private residential sales: 10% on properties under 5 years, or exempt if proceeds are reinvested in another property.
Properties sold after 5 years are exempt from CIT.
Rental income is subject to income tax at standard rates (19%, 30%, 40% dependent on income) or a fixed charge of 8.5% of yearly rental income up to €4,000, and 19% of yearly rental income over €4,000.
Most EU Accession states have benefited from similar influxes of investor capital in response to their developing economies, but none seems to have profited as well as Poland.
The factor that most marks Poland’s property investment landscape is its stark undersupply, which is particularly acute in Warsaw. The fact that demand continues to far outweigh supply has been a major contributory factor in the price rises seen over the last two years. This has led to an influx of UK and Irish property investors attracted by Poland’s low entry point and the promise of excellent capital growth, which in turn has added to the upward price pressure.
One consequence of this has been that Polish homebuyers are increasingly being priced out of the property market, which has led to new growth in the rental sector.
All of this buoyancy in the property market is underlined by the fact that Poland is one of the true economic success stories of the post-Soviet era. Poland has been both politically and economically transformed since 1990, having joined the EU in 2004, and is scheduled to adopt the Euro in 2012.
The private sector is thriving, creating over 300,000 new jobs in 2006 and exports have doubled since 2002. Consumer price inflation is low at just 1.0% (one of the lowest in the EU) and inward investment is accelerating: $10 billion in 2006 alone. Major foreign employers in the IT, electronics and automotive sectors are moving into the country, and Poland is scheduled to benefit from up to $80 billion worth of EU funds between 2007-2013.
Property Tax in Poland
New residences are subject to VAT at 7%
There is a 2% acquisition tax on second hand property.
Corporate Income Tax (CIT) of 19% if property is a company asset.
CIT on private residential sales: 10% on properties under 5 years, or exempt if proceeds are reinvested in another property.
Properties sold after 5 years are exempt from CIT.
Rental income is subject to income tax at standard rates (19%, 30%, 40% dependent on income) or a fixed charge of 8.5% of yearly rental income up to €4,000, and 19% of yearly rental income over €4,000.
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