Happy New Year 2025! We hope it will be a good and successful year for all our readers.
In line with last year's announcements, in today's article we want to summarize the changes announced by the government, as well as indicate the expectations and needs of the real estate market by 2025.
The planned changes to the law related to the real estate market were perhaps most fully presented in the announcement of the Draft Act on Solutions to Increase the Availability of Land for Residential Construction. Many of the ideas outlined therein meet the expectations of investors, so we hope that the announced deadline for presenting a specific draft act in the first quarter of 2025 will hold, as we eagerly await the specifics.
It is not our intention to list all the announcements here, but we will point out those that, in our subjective opinion, are the most important.
First, the release of agricultural land located within city boundaries from restrictions on the sale of agricultural land. We understand the need to protect agricultural land, but urban land should increase the supply of land for investment, including residential development, without additional restrictions or decisions dependent on the consent of the National Agricultural Support Center (KOWR). Therefore, the proposal to amend the Act on Shaping the Agricultural System by expanding the types of land exempt from the Act's regime to include all agricultural properties located within city boundaries should be considered appropriate.
Secondly, changes in planning procedures are moving in the right direction: the possibility of increasing the use of a simplified procedure for the adoption of local plans, and simplifying the procedures related to the adoption of integrated investment plans (enabling the municipal council to establish, through a resolution, guidelines for urban planning agreements concluded in connection with the preparation of integrated investment plans). While this will be short-term, unless the legislator decides to extend the deadline for obtaining resolutions on determining residential location beyond the end of 2025, the positive assessment is that municipalities are being granted greater flexibility in adapting investment parameters to local conditions, such as the abolition of the requirement to maintain a parking space ratio of 1.5 spaces per apartment, as well as the proposal to indicate that such a resolution can serve as the basis for real estate division.
We are also awaiting specific proposals to reduce delays in investment processes or their complete halt due to parties filing unjustified appeals at various stages of the proceedings. Currently, the drafters are considering introducing a provision requiring parties to appeals and complaints to clearly state their objections to the decisions, the scope of the request being appealed or complained about, and the evidence supporting the request. This is a renewed announcement of changes, but none of them have yet entered into force. From our perspective, we would like to add that introducing an appeal fee would also be a good solution, as it could discourage the filing of unjustified appeals.
We are less comfortable with the idea of restoring the right to establish perpetual usufruct of land for residential purposes, as it will be converted into ownership once a land use permit is obtained. This, therefore, will not provide any incentive for municipalities to establish this right. It should be clarified that the amendment restores the legal status from before January 1, 2019, which abolished the prohibition on establishing perpetual usufruct for residential purposes. The proposed change aims to enable a landowner, such as a municipality, to establish a specific legal title for an investor implementing a significant socio-economic project, while also enabling control over the implementation of the purpose for which the land is granted perpetual usufruct.
It's also worth emphasizing that the Polish real estate market is still awaiting the introduction of regulations allowing the creation of REITs and investing in real estate this way. We've heard that work on the bill is already advanced, so we await its presentation and hope that this new institution will be implemented into Polish law in 2025.
For another consecutive year, we've highlighted the fact that the real estate market is facing changes due to the mandatory adoption of a new regulation on the technical requirements for buildings and their location . In 2024, the deadline for their implementation was again extended to September 20, 2027. However, as we've repeatedly emphasized, these changes will have fundamental implications for the design of new investments, and therefore their adoption should be preceded by consultations, which require adequate time. Furthermore, these changes should be adopted early so that investors and designers aren't caught off guard at the last minute.
One year has ended, another one is beginning – we hope that this year legal solutions will be introduced that will actually shorten administrative procedures during construction investments, which constitute a significant cost affecting real estate prices in Poland.
This article is for informational purposes only and does not constitute legal advice.
Legal status as of January 7, 2025
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