Between House and Dom
The word 'house' sounds the same in both Russian and Polish. But there is nothing in common between Polish and domestic country houses. Or rather, almost nothing. It is enough to cross the Polish border to see that of our Slavic brothers, the Poles are perhaps the least ambitious. Imagine a suburban cottage settlement where the oldest houses are from the 1930s, and the newest ones are being built before your eyes. To distinguish new housing from old, you would have to try very, very hard. No, the houses are not cloned from each other; on the contrary, they differ noticeably in internal layout, finishing options, structural schemes, and finally, the garden plots are not alike, not to mention the breeds of four-legged guards lazily yapping from behind fences. But overall, one gets the feeling that no resident of the settlement has enough vanity to stand out from the neighbors.
Sweet, cozy, carefully maintained, but at the same time very conservative little houses are immersed in blooming gardens, exuding peace and contempt for rivalry and bustle. After the glaring dissonance of motley cottages at home, such a suburban paradise cannot but evoke outright sympathy.
No one thinks of building a four-story 'castle' with towers in an attempt to show everyone how cool he is. And forget about castles; even a high-tech villa of glass, wood, and metal is nowhere to be found here.
Foreign companies trying to earn zlotys on investments in Poland's construction industry note that in matters of architecture and house building, Poles remain terrible conservatives. Attempts to sell them Canadian, American, and even Finnish prefabricated houses have not been successful. Brick and concrete blocks are the building materials from which the citizens of this country prefer to build their homes. Moreover, they build them literally under personal supervision, or even with their own hands, and not so much for reasons of economy as out of respect for tradition.
That Sweet Word 'Schengen'
Despite the fact that Poland is famous for its ancient cities, healing mineral waters, and therapeutic muds, the activities of our compatriots in buying and selling housing in this country could not be called active until recently. Until recently, only residents of the border regions of our country and those with business in Poland were interested in Polish houses and apartments. But after the publication of the official statement of the EU Commissioner for Justice, Freedom and Security on Poland's entry into the Schengen zone, many began to show increased interest in real estate in this country.
Prices on the real estate market in Poland are still considered quite moderate compared to other European countries, despite the fact that in 2006 the average cost per square meter rose by 33%. Poland is now considered an ideal 'launching pad' for doing business or living in the European Union zone.
According to the Polish Association of Real Estate Agencies, when deciding to buy a house or apartment in Poland, the geographical location should be taken into account. The further east the property is located, the cheaper it is, and correspondingly, the closer to the German border, the more expensive. For example, in Warsaw the average cost per square meter is about €2,000. At the same time, if country houses with an area of 150-250 m2 near Warsaw are sold for €200-300 thousand, then in the east of the country, say in the vicinity of Bialystok, you can find a quite decent house two to three times cheaper.
Along with Warsaw, the highest real estate prices are observed in Krakow and Wroclaw. The Polish ski resort Zakopane, the winter capital of Poland, is in great demand among buyers from abroad, including from the former Soviet Union. It is here that those who are already bored with inexpensive ski resorts but still lack money for France and Switzerland flock.
Until recently, one could only buy land, a house, or a hotel requiring reconstruction, i.e., real estate for investment, not for ski holidays. But following demand, primarily from foreigners, construction of modern chalets has begun in Zakopane, where apartments with an area of 30 to 80 m2 are sold; the price per square meter is €800-1,200. This is quite expensive by Polish standards, but quite acceptable by European standards. Modern materials and technologies are used in construction, apartments are sold with turnkey finishing, sold at the construction stage with the possibility of installment payments until completion. A modern villa of 150-250 m2 in Zakopane will cost €200-800 thousand.
Through Thorns to Property
The most serious obstacle for real estate buyers who are not Polish citizens is local legislation. The procedure for purchasing real estate by foreigners in the Republic of Poland is regulated by a number of laws, among which the fundamental ones are: the Law of March 24, 1920 'On the Acquisition of Real Estate by Foreigners', the Law of February 15, 1962 'On Polish Citizenship', the Law of June 14, 1960 'On the Administrative Procedure Code of the Republic of Poland', as well as some other regulatory acts.
According to the Law 'On the Acquisition of Real Estate by Foreigners', a foreign citizen does not need a permit only in the case of purchasing an apartment or a detached residential property. An exception is also made for foreigners who have permanently resided in Poland for the last five years, are spouses of Polish citizens for two years, or have the right to inherit the alienated property. In other cases, a permit from the Ministry of Internal Affairs is required.
When submitting an application requesting permission to acquire real estate, the following documents must be presented: identity card with documents on the buyer's legal and civil status, all documents on the property itself with information on the purposes for which it is being purchased, and the seller's identity card. In addition, documents confirming the specified data on the buyer's ties with Poland should be attached to the application.
The application must be completed in Polish, and all attachments to it must have certified translations. The country's Ministry of Internal Affairs is obliged to make a decision within two months. However, if the applicant holds citizenship of any European Union country, permits can be forgotten unless it concerns the purchase of agricultural land, forests, or a second real estate property. Local real estate agencies assist in obtaining permits. Fees for such services average 3-5% of the property value. The processing time for a permit application is two months.
Land in the country can only be purchased by legal entities registered in Poland (company registration cost approximately €2,000). The state fee for issuing a permit for a civil law transaction with a real estate property is 1,000 zlotys, for issuing a promessa (promise to issue a permit) – 60 zlotys (€1 is approximately 3.97 zlotys).
Executing the transaction itself will require certain expenses. A real estate agency usually receives a commission from both the seller and the buyer. From the latter, as a rule, 3% of the purchase price is charged. Notary services will cost approximately €250 or 1% of the transaction amount exceeding €10,000. VAT on these expenses is 22%. Real estate acquisition tax – 5%. Utility bills do not exceed €50–100 per month.
Fifteen years – not a long time?
The process of obtaining Polish citizenship is no less complicated. To be able to submit documents, you must live in Poland for at least five years with a residence permit. And to obtain a residence permit, you must spend at least five years in Poland with a temporary visa while having a job.
In turn, to obtain a work permit in Poland, you first need to prove that there are no candidates from Polish citizens for your position. Moreover, the Polish employer must be so interested in you that they agree to go through all the bureaucratic red tape to obtain permission to hire you. In addition, they are obliged to pay for this permit. All this will be repeated annually for five years until you obtain a residence permit, and only then can you submit documents (not automatically receive!) for Polish citizenship. Thus, the procedure for obtaining citizenship takes from 10 to 15 years.
However, the employment of our compatriots in Poland is not as hopeless as it seems at first glance. Last summer, the Polish government significantly simplified the rules for working in the country for citizens of Ukraine, Russia, and Belarus. The relevant resolution was adopted by the Polish Ministry of Labor and Social Policy on June 30, 2007. For the period until December 31, 2009, citizens of neighboring countries have the right to work in the country with a work visa without any additional restrictions for three months of each half-year. Previously, Polish employers had to go through a complicated procedure to register a foreign worker; since July 20, 2007, it is enough for them to register a declaration with the local employment office, paying about €27 (100 zlotys). Legally working citizens of Ukraine, Russia, and Belarus have equal labor and social rights with Polish citizens, including the right to minimum wage, sick leave pay, public healthcare services, etc.
Mortgage Polish-style
Poland has a well-developed banking sector. This is because during privatization, many regional banks were bought out by foreign ones. Today, more than 80% of Polish banks' capital is in the hands of leading international banks – ING, Commerzbank, Allied Irish, Citigroup, Unicredit, HVB, Krediet Bank, Rabo, and BCP.
The country's authorities ensured healthy competition among banks with foreign capital. The only condition is that a bank's market share must not exceed 10-15%. All this contributes, among other things, to the development of the affordable housing market. Banks compete for clients, and today some of them offer not only loans up to 90% of the property value but also renovation loans.
Currently, there are 650 commercial banks operating in Poland. According to the National Bank of Poland, 45 banks provide mortgage housing loans. Both universal and specialized banks offer them. Most loans are provided in zlotys, partially in euros and US dollars. Interestingly, due to changes in the financial market, the borrower can change the loan currency.
Loan terms range from 5 to 20 years. When assessing borrowers' creditworthiness, banks require that the borrower's loan payments account for 17% to 40% of their monthly income. This indicator varies significantly across banks. The average mortgage loan rate in Poland is currently 5.6%. However, according to Polish real estate agents, most foreign buyers, despite the possibility of obtaining a loan, prefer to pay outright.
Pavel CHERNYAKOV.
"Suburban Review"