You want to buy an apartment on the secondary market in Kraków. The price of the apartment is 500 thousand zlotys. On top of that you have to add the remaining costs, including the tax on civil law transactions (PCC) at 2%, i.e. another 10 thousand zlotys. A lot, right? Fortunately, there is a prospect of considerable savings.
The amendment has been signed
3 days ago (25 July 2023), the President of Poland, Andrzej Duda, signed an act amending, among other things, the PCC tax (the Act on the Tax on Civil Law Transactions). It will partially enter into force 30 days after its promulgation, which – according to information from the Government Legislation Centre – should take place no later than 10 August 2023.
Buying an apartment – how has it been until now?
Until now, buying an apartment carried an additional cost – purchasers of premises had to pay the PCC tax at a rate of 2% of its value, regardless of whether it was their first apartment or a subsequent one. Notaries did not collect this tax if the price of the premises included VAT – an apartment bought from a developer or from a person running a business usually met this condition.
PCC – what will change?
The amendment to the PCC Act will introduce a significant change in the collection of the tax on civil law transactions. This may allow clients to save from a few to over a dozen thousand zlotys. However, this change will not apply to every buyer. Where is the catch? The exemption from the tax on civil law transactions (which the notary collected when the sale agreement was signed and then remitted to the Tax Office on the buyer’s behalf) applies to the conclusion of a sale agreement whose subject is:
- the ownership right to residential premises constituting separate real estate,
- the ownership right to a single-family residential building,
- a cooperative ownership right to premises concerning residential premises or a single-family house.
These situations concern buyers who are natural persons and who, on the day of concluding the sale agreement and before that day, did not hold any of the rights listed above or a share in those rights, unless that share does not exceed or did not exceed 50% and was acquired by inheritance.
In other words, the PCC tax exemption will cover those who have not previously owned an apartment (or whose share was inherited and did not exceed 50%).
Your first apartment tax-free
So, if you are buying your first apartment or house, you will most likely be covered by the exemption from the tax on civil law transactions (PCC), which until now had to be paid at 2% of the value of the premises being purchased. Notaries will apply the exemption on the basis of declarations made by the buyers. If you are not sure whether the exemption applies to you – please contact the office.