Tax when buying property – what you need to know

Buying a house or flat involves many expenses we do not think about when browsing listings. Tax on the purchase of a property is one of them. Its amount depends on the sum stated in the agreement and on the source of the purchase. Flats and houses from the secondary market are taxed differently from those on the primary market.

Property from a developer

Buying a house or flat directly from a developer does not mean the buyer has to pay tax. For a simple reason – it is the developer who is already liable for VAT or, under certain rules, exempt from it. In both cases, however, the buyer does not have to pay the 2 per cent civil law transactions tax (PCC).

Property from the secondary market

Although the prices of the properties themselves are lower on the secondary market, the tax that has to be paid on them can make a significant difference. The buyer must pay tax of 2 per cent of the value of the acquired property.
In practice, if the price of a flat is 200 thousand PLN, we have to add 4 thousand PLN of tax alone. If we decide to buy a house on the secondary market worth 900 thousand PLN, the tax will already be 18 thousand PLN. And that is not the end of the costs to be borne.
It is worth stressing that, unlike the estate agency's fee, the obligation to pay civil law transactions tax always rests with the buyer. The tax cannot be transferred to the seller by any agreement. The calculation and payment of the tax on buying a property from the secondary market is handled by the notary.

READ ALSO – SELLING PROPERTY ABROAD

Other fees

Regardless of whether the flat or house comes from the primary or secondary market, a notary's services must be used when buying a property. And again, the party that bears the cost is the buyer. The amount of the fees for drawing up the agreement and completing all the formalities is set by the Minister of Justice. The fees depend on the value of the property:

• 30 thousand – 60 thousand PLN = 710 PLN + 3% of the value above 30 thousand PLN,
• 60 thousand – 1 million PLN = 1,010 PLN + 0.4% of the value above 60 thousand PLN,
• 1 million – 2 million PLN = 4,470 PLN + 0.2% of the value above 1 million PLN,
• more than 2 million PLN = 6,770 PLN + 0.25% of the value above 2 million PLN, but no more than 10 thousand PLN.

Another expense when buying a house or flat relates to the entry in the land and mortgage registers (księgi wieczyste). Most flats and houses on the secondary market already have their land and mortgage registers (the exception being some cooperative premises). So only an entry in the register recording the change of owner is needed. The cost is 200 PLN. For properties on the primary market, in addition to the entry, you have to add the cost of opening a land and mortgage register – 60 PLN.

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