There are many sources of real estate law in Poland. Among them are:

• the Civil Code;
• the Construction Law;
• the Land Registers and Mortgages Act;
• the Spatial Planning and Development Act;
• the Real Estate Management Act; and
• the Formation of the Agricultural System Act.

The real estate market is constantly shaped by a number of different factors, including legal, economic, political, social and technological factors. Market trends in 2024 are indicated here, broken down into the investment market, the office space market and the retail space market.

Investment Market

In the scope of the investment market, the average transaction value is on an upwards trend. In 2024, the volume of investments in the Polish real estate market increased by around 130% year-on-year. In terms of the number of transactions, there was a 46% increase. The investment market structure in Poland in 2024 showed clear sectoral diversification. The office and retail sectors dominated the investment volume, each accounting for around a third of the total transaction value. The warehouse and industrial sector maintained its strong position, accounting for more than a quarter of the total investment volume. The greatest interest was focused on modern logistics facilities located in key distribution hubs.

Office Space Market

Since 2020, a clear trend has been observed in the office space market towards the optimisation of office space by tenants, driven by several key factors. The rising costs of running a business, a reduced number of office visits, changing employee needs, and new work models (eg, hybrid work) are prompting companies to seek more flexible and efficient office solutions. In response to these changes, businesses are increasingly opting for smaller but more functional spaces. Offices are now being designed with a view to increased employee mobility and more emphasis on collaboration and meeting areas rather than traditional desks and individual workstations.

In 2025, it is expected that businesses will continue to follow the trend of office space optimisation, with many employers declaring a gradual reduction in remote working to one or two days per week. Additionally, there is growing interest among tenants in flexible office solutions such as flex offices, hot-desking, and co-working spaces.

Renegotiating lease agreements against new ones

In 2024, one noticeable trend in the office space market was the shift towards lease renewals by existing tenants rather than the signing of new contracts. In the Warsaw market, renegotiations accounted for 46% of all transactions, which translates into an increase of 3% compared to 2023. Net demand, which includes new leases and expansions, decreased by 6% compared to 2023 – corresponding to 400,000 m².

In 2024, the Warsaw market witnessed eight office space lease transactions exceeding 10,000 m², totalling almost 111,100 m². The four largest agreements were signed by tenants from the financial sector, including Santander Bank’s pre-let at The Bridge for 24,500 m² and renegotiated deals by Confidential Client at Atrium Garden (13,900 m²), National Development Bank at Varso Place 2 (13,600 m²) and Citi Bank Services at T-Mobile Office Park (13,100 m²).

Choosing central locations

The Warsaw office market has seen a growing demand for central locations. In 2024, 104,400 m² of new office space was delivered – an increase of more than 71% from the previous year. Despite this rise, the volume of space delivered is still below the historical average. New office space was mainly concentrated in projects located in the city centre (83%).

Sustainable solutions

A sustainable approach to property design and management remains a dominant trend in the real estate market. Tenants and investors are opting for buildings with facilities and ecological certificates, such as WELL, BREEAM (Building Research Establishment Environmental Assessment Method) or LEED (Leadership in Energy and Environmental Design) certificates – something that is also linked to tenants’ increasing awareness of and the growing emphasis on energy efficiency. The use of green technologies makes it possible not only to reduce CO₂ emissions, but also to optimise operating costs.

Retail Space Market

2024 saw further development of the trend that emerged in 2020 for the dominance of retail parks as the preferred building format in the retail space market. In the first quarter of 2024, all new retail space was retail parks. Projections presented for 2025 indicate that the market will continue to focus on this format, with up to 70% of retail parks expected to be built.

Owing to the large number of shopping centres in Polish cities, investments in new shopping malls appear to be limited. In 2024, there was a decrease of approximately 30% in the number of construction projects started compared to the previous year, and a 7% drop compared to the average of the past three years. Taking this into account, a lower supply of new retail space is expected in 2026–27.

In 2024, Poland ranked second in Europe in terms of newly delivered space for retail parks and shopping centres, accounting for approximately 14% of the total space built in Europe.

Obligation to Adopt Master Plans

According to the current wording of the Spatial Planning and Development Act, by 31 December 2025, all municipalities in Poland are obliged to adopt master plans, which will replace the current studies of spatial development conditions and directions. It should be emphasised that work is currently underway on an amendment to the aforementioned Spatial Planning and Development Act, which provides for an extension of the validity of municipalities’ existing spatial development conditions and directions studies until 30 June 2026, along with an extension of the deadline for municipalities to adopt master plans until 30 June 2026 as well.

According to the new regulations, the arrangements contained in the master plan will be binding for zoning plans and decisions on land development conditions. Master plans will apply to the entire territory of the municipality. Decisions on land development conditions issued from 1 January 2026 (or from 1 July 2026 if the aforementioned amendment enters into force) will no longer be perpetual – the new decisions on zoning conditions will be valid for five years from the date on which they become legally valid.

Amendment to Regulations on Property Tax

The amendment to the property tax regulations has been in effect since 1 January 2025. The new regulations involve changes to the way in which buildings are classified and how the related tax is calculated. The amendment introduced autonomous (ie, independent of the construction law) definitions of “building” and “structure” and defined in detail the criteria that a building project must fulfil. As part of the amendment, selected building and technical facilities were subject to tax.

The real estate rights that can be acquired in Poland are categorised within the Polish legal system as follows.

• Ownership – the title of ownership is the fullest of all property rights, providing the owner with the widest range of rights with regard to real property.
• Perpetual usufruct – this is a right to use property that remains owned by either the State Treasury or the local government unit. Although the perpetual usufructuary has broad rights to use the property, it is important to note that perpetual usufruct is a limited right, which lasts from 40 to 99 years and can be renewed once. Buildings and other facilities erected by the perpetual usufructuary on the land constitute property of the usufructuary rather than of the land owner.
• Other categories of property rights include lease, tenancy, usufruct, and servitude.

The transfer of property ownership is primarily governed by the provisions of the Civil Code. There are also special regulations in Polish law that limit the ability to dispose of various types of property, such as agricultural or forest properties, as well as restrictions on the acquisition of property by foreigners from outside the EEA (European Economic Area).

In addition, the Polish legal system has a number of regulations granting a statutory right of pre-emption for certain categories of real estate in the event of sale – for example, the right of pre-emption of the right of perpetual usufruct (for undeveloped real estate) or a statutory right of repurchase or to acquire real estate (eg, agricultural real estate).

Ownership title to real estate (or, respectively, the right of perpetual usufruct) can be transferred inter alia by means of a sale, exchange or donation agreement. The agreement on the transfer of ownership title to real estate must be concluded in the form of a notarial deed, otherwise it is considered null and void. Furthermore, such an agreement cannot be concluded on the condition of a future and uncertain event or subject to a certain deadline. The transfer of ownership of the property must therefore be unconditional. Any condition stipulated in the transfer agreement will render it invalid.

Ownership title of the real estate is transferred to the purchaser upon conclusion of a binding agreement (eg, a sale, exchange or donation agreement) unless a specific provision states otherwise or the parties to the contract have agreed otherwise.

As a general rule, an entry in the land and mortgage register is only declaratory – ie, it is a confirmation, which means that the property can be resold again without the need to wait for the entry to be made, even on the same day. There are some exceptions (eg, transfer of perpetual usufruct requires an entry in the land and mortgage register).

Depending on the type of transaction, due diligence is carried out by lawyers, tax advisers, environmental protection advisers, planning and spatial development advisers, and technical advisers.

As a result of the due diligence carried out, a report is drawn up. It can include the results of the full legal audit or, depending on the agreement between the buyer and advisers, may be limited to the presentation of only identified risks (so-called red flags).

If the parties to the transaction do not exclude liability under the warranty, the seller will be liable for physical and legal defects of the sold real estate pursuant to statutory provisions (ie, under the warranty for defects). Exclusion of warranty is permitted in professional (B2B) transactions.

As the statutory warranty has a relatively limited scope considering the complexity of real estate transactions, the parties agree (in the agreement) upon the scope and content of the representations and warranties made by the seller, as well as the seller’s liability for them. Liability for representations and warranties does not arise from statutory law but is established by the parties themselves directly in the agreement, based on the principle of freedom of contract.

The representations and warranties made by the seller are in each case tailored to the subject of the transaction and remain correlated to the results of the due diligence carried out on the real estate. They typically concern the condition of the property being sold. By way of example, the submitted representations and warranties usually concern:

• the legal title to the property;
• real estate permits;
• environmental issues; and
• tax and financial issues.

If the parties to the transaction do not exclude liability under warranty for defects in the sold property, the representations and warranties made by the seller may establish additional liability for the seller or serve as a detailed specification of the seller’s liability under warranty.

In a significant number of transactions, the parties establish a list of representations and warranties on the one hand and – on the other – exclude liability under warranty, so that the representations and warranties become the sole and exclusive responsibility of the seller. In such cases, the parties typically regulate in detail the individual categories of representations and warranties (their groups), assign appropriate liability limits and define the duration of liability, understood as the maximum periods for raising claims.

It should be noted that a warranty and indemnity (W&I) insurance is an increasingly common solution for the allocation of potential risks in transactions. It consists of insuring transaction risks related to the truthfulness of the seller’s representations and warranties made in the real estate sales contract.

Investors, when purchasing a property, should pay particular attention to the following issues (among others):

• legal title to the property;
• possible pre-emption;
• encumbrances or other rights in rem or obligations in favour of third parties on the real estate (eg, easements, usufruct, lease, mortgage);
• real estate development decisions, including:
1. decisions on zoning and land development;
2. decisions on building permit;
3. decisions preceding the issuance of building permit;
4. notifications of construction works not requiring building permission together with certificates of non-objection thereto; and
5. decisions on occupancy permission;
• agreements with neighbours or public authorities concerning the development or use of the property and/or adjacent properties (eg, concerning the sharing of infrastructure);
• zoning plan;
• access to the public road and utilities; and
• agreements with public road authorities for the construction, reconstruction, modernisation and maintenance of public roads serving the properties.

The principles of liability for environmental damage prevention and remediation are governed by the Act of 13 April 2007 on environmental damage prevention and remediation (the “Remediation Act”). The entity using the environment and therefore the entity liable under the Remediation Act is defined very broadly and, in practice, may be either:

• the owner of the real estate;
• a private investor constructing, for example, an office building;
• a public investor modernising a road, constructing a water basin or a new water supply system; or
• a construction company carrying out construction projects.

If the threat of damage or the damage itself was caused by more than one entity, their liability under the Remediation Act will be joint and several. However, if the damage was caused with the consent or knowledge of the landowner (eg, the owner of the property), the latter will be obliged to take preventive and remedial measures jointly and severally with the entity using the environment that caused the damage.

In the event of an imminent threat of environmental damage, the entity using the environment is obliged to take preventive action immediately. The costs of carrying out preventive or remedial action shall be borne by the entity using the environment, unless it demonstrates that the threat of environmental damage or the damage itself was caused:

• by another designated entity; or
• as a result of compliance with an order issued by a public administration body.

In Poland, there is an information and communication technology system that includes the register of direct environmental damage and actual environmental damage, as well as the register of historical land contamination.

The purpose of real estate in Poland is determined on the basis of planning documents, primarily based on the provisions of the Spatial Planning and Development Act. The main basis for determining the purpose of real estate is the local spatial development plan or a resolution on the adoption of an integrated investment plan. In the absence of a local spatial development plan, the purpose of real estate is determined on the basis of a decision on the conditions for development and land use.

Additionally, in the case of multi-family housing investments, it is possible to determine the parameters of such an investment on the basis of a special resolution provided for in the provisions of the Polish Special Housing Act – although this Act is currently valid only until the end of 2025.

In the Polish legal system, real estate may be expropriated only for the benefit of the State Treasury or a local government unit. Expropriation may cover all or part of the real estate.

The initiation of expropriation proceedings shall be preceded by negotiations aimed at acquiring real estate, perpetual usufruct or a limited right in rem by agreement. The person to be expropriated may also be offered replacement real estate. Expropriation proceedings shall be initiated upon the ineffective expiry of a two-month period set for the person to be expropriated to conclude a possible agreement.

The decision on expropriation of real estate, besides the elements specified in the provisions of the Code of Administrative Procedure, should also specify the amount of compensation. It is determined according to the condition and value of the expropriated real estate on the date of the expropriation decision.

The amount of compensation shall be calculated after obtaining an opinion from a real estate appraiser, specifying the value of the property.

Typically, sale of real estate is structured as a single-asset deal taxed with standard 23% VAT (residential is taxed with 8% VAT). It is to be accrued by the seller and may be generally deducted by the buyer. Certain VAT exemptions may apply (for details, please refer to 8.1 VAT and Sales Tax) – in which case, the buyer will be obliged to pay 2% tax on civil law transactions (TCLT) of the fair market value (FMV) of real estate.

If the sale of real estate is structured as an enterprise deal, no VAT should be accrued, but the transaction will be subject to TCLT amounting to 2% of the FMV of real estate and tangible assets and 1% of the FMV of property rights. TCLT is to be borne by the buyer.

Assuming that the seller may not be considered as a holding company, the sale of shares should not fall within the scope of VAT-able activity, but 1% TCLT applies.

The sale of real estate in any of the discussed forms gives rise to the obligation to recognise revenue on the part of the seller. Income is taxed as a rule with CIT according to the general rules (19% rate or 9% rate in case of small taxpayers; 19% rate applies as a rule to capital gains). Respective provisions of double tax treaty should apply accordingly.

A foreigner intending to acquire real estate (perpetual usufruct) in Poland is obliged to obtain – with certain exceptions – a permit issued by the minister responsible for internal affairs. This is regulated by the Act of 1920 on the Acquisition of Real Estate by Foreigners.

The most important exception is that there is no requirement to obtain a permit for foreigners who are citizens of or entrepreneurs from the Swiss Confederation or countries that are parties to the Agreement on the European Economic Area. Other exceptions apply – for example, to the purchase of residential premises or to foreigners who are spouses of Polish citizens.

Acquisition of real estate by a foreigner without obtaining a permit is invalid.

The acquisition of real estate that does not generate income at the time of acquisition is generally possible from the buyer’s own funds or from non-bank sources (eg, funds obtained through the issue of bonds on the debt market). At the next stage, after demonstrating a sufficient level of own contribution and loan-to-value (LTV) ratio, it is possible to obtain a construction loan and then – after completion of construction – convert the construction loan into a more favourable investment loan (long-term).

The acquisition of real estate that generates income at the time of purchase is generally possible with the use of a bank loan (acquisition loan).

Alternative sources of financing are funds obtained on the debt market (loans, bonds) or funds obtained through a joint venture partnership.

Security instruments may include the following mechanisms:

• mortgage on real estate;
• pledge on shares or stock in a company;
• security in the form of assignment of rights to lease/insurance agreements;
• security on income from real estate directed to a special escrow account;
• sureties and guarantees; and
• escrow.

In Poland, there are no specific restrictions related to the establishment of security interests over real estate in favour of foreign creditors. However, it should be noted that the enforcement of security interests – if it involves the acquisition of real estate by a foreigner – may be subject to restrictions on the acquisition of real estate by foreigners.

The establishment of a mortgage is subject to TCLT. The tax obligation arises at the moment of submitting a statement on the establishment of a mortgage or upon conclusion of a mortgage agreement. The tax base is the amount of the secured receivable, and a 0.1% TCLT rate applies to receivables of a determined amount. In the case of receivables of an undetermined amount, the tax is PLN19.

The taxpayer is the person submitting the declaration of intent to establish the mortgage. In addition, court fees are charged for entering the mortgage into the land and mortgage register, as well as notarial fees plus VAT if the security is established by notarial deed.

Depending on the provisions of the company’s articles of association, it may be necessary to obtain the approval of the relevant governing body to establish a mortgage over real estate belonging to the company.

In the area of financial assistance, the current rule is that it is permissible for a joint stock company to directly or indirectly finance the acquisition or subscription of its own shares – in particular, through the granting of loans or the establishment of security, including mortgages on real estate.

The most commonly used security interest established over real estate is a mortgage, where the lender usually requires the mortgage to have the highest priority. In such case, the lender’s position is secured owing to the fact that there are no other mortgages with a higher priority encumbering the property.

The enforcement of a claim secured by a mortgage on real property is a multi-stage process that is initiated by the public bailiff on the basis of enforcement title. The process ends – if the debt is not satisfied by the borrower – with a public auction of the real estate.

An existing secured debt may be subordinated to a newly created debt, with the proviso that this requires the agreement and appropriate structuring of the legal relationship between the creditors. Such subordination may occur voluntarily by contract (ie, the subordination agreement) or, in specific cases, by law (the law may grant priority to specific claims). The subordination mechanism may be deemed ineffective owing to bankruptcy or restructuring provisions.

A creditor holding or enforcing security over real estate – as a rule – cannot be classified as an entity using the environment and consequently is not liable under the principles of liability for environmental damage prevention and remediation, which are governed by the Remediation Act (see 2.7 Soil Pollution or Environmental Contamination).

Security interests, such as a mortgage, do not expire as a result of the debtor’s bankruptcy. Mortgage creditors have priority in the satisfaction of their claims; the amount obtained from the sale of the encumbered real estate is allocated first to satisfy the claims of mortgage-secured creditors. There are, however, exceptions.

In the case of debt financing, the main tax benefit is the ability to deduct interest as an expense, provided the requirements of the Corporate Income Tax (CIT) Act are met. Interest is deducted on a cash basis, up to the higher of PLN3,000,000 or the amount calculated based on the EBITDA formula. Debt financing costs must be excluded from deductible expenses if the excess exceeds either of these amounts. The CIT Act also allows for the deduction of notional interest in the case of equity financing, but up to PLN250,000 annually.

Polish regulations do not provide special rules regarding mezzanine financing. Such financing is rarely used and is usually secured by a pledge on shares. Financing between business entities is generally exempt from TCLT. Bank loans are typically secured by a mortgage, which is subject to TCLT calculated based on the amount of the secured receivable.

The main law regulating spatial planning in Poland is the Spatial Planning and Development Act. The basic planning documents in Poland that are used in the spatial planning process include:

• the study of spatial development conditions and directions of the municipality – a document that sets out the general principles and directions of spatial development at the municipality level;
• local zoning plan – a detailed planning document that regulates certain principles of spatial development for a designated area;
• integrated investment plan – a special type of local plan enacted by the municipal council at the request of the investor, following negotiations and the conclusion of an urban planning agreement; and
• decision on land development condition – this is issued when no local zoning plan has been adopted for a given area.

Additionally, in the case of multi-family residential investments, it is possible to determine the parameters of such an investment on the basis of a special resolution – see 2.8 Permitted Uses of Real Estate Under Zoning or Planning Law.

In Polish law, depending on the nature of the investment, it is necessary either to:

• obtain a building permit for a new investment or for the reconstruction of an existing building; or
• notify the competent authority of the intention to carry out construction works.

(In the case of notification, work may commence if the competent authority does not raise any objections within the time limit specified in the regulations).

As regards larger investments, the application for a building permit may also be preceded by the need to obtain a decision on the environmental conditions of the investment.

Under Polish law, the following authorities are generally responsible for regulations related to spatial planning.

• The commune head/mayor/president of the City issues:
1. building permits;
2. decisions on land development conditions; and
3. decisions on environmental conditions.
• The municipality (ie, the town hall or municipal office) is the main body responsible for determining the use of plots of land. It creates planning documents such as:
1. the local zoning plan;
2. the study of spatial development conditions and directions of the municipality;
3. the master plan; and
4. the integrated investment plan.

The process for obtaining entitlements to develop a new project or complete a major refurbishment is described in  4.2 Legislative and Governmental Controls Applicable to Design, Appearance and Method of Construction. Owners of the adjacent properties are allowed to participate in the process with regard to issuance of the building permit as a party (and are allowed to challenge the building permit).

The Polish legal system provides for a right to appeal against decisions issued by a relevant authority in the investment and construction process (eg, against a decision on a building permit). Such appeal may be brought by any person who has a legal interest – for example, in case of a building permit, the owner of an adjacent property).

In the implementation of property development projects, it may be necessary to conclude agreements with public authorities or utility providers, in addition to obtaining the necessary permits (eg, building and occupancy permits). By way of example, agreements with public road managers may be required for the construction, reconstruction, upgrading and maintenance of public roads that provide access to properties. Concluding agreements with utility providers is a key stage in the process of implementing a construction project and is aimed at ensuring access to essential utilities such as electricity, water, gas or heat supply.

In the Polish legal system, the restrictions on land development and use are enforced through various legal mechanisms aimed at ensuring the compliance of construction activities with the planning documents indicated in 4.1 Legislative and Governmental Controls Applicable to Strategic Planning and Zoning and with the applicable law. These mechanisms include both administrative control and the option of enforcement through public administration authorities or administrative courts.

In the Polish legal system, investors – both domestic and foreign – have a variety of legal forms available to them to acquire and hold real estate assets. Real estate assets may be acquired by any legal person or unincorporated entity permitted by Polish law.

The most common legal form chosen for the acquisition of real estate is the limited liability company. The second-most common legal form used for real estate investment is a limited partnership.

For large institutional investors (eg, private equity funds, investment banks or large companies), one of the preferred forms of investing in real estate is the creation of a closed-end private asset investment fund (fundusze inwestycyjne zamknięte, or FIZ).

Family foundations, which have been allowed by the Polish legal system since 2023, are becoming increasingly popular.

There are no special requirements applicable to the constitution of companies based on the fact that the company will be used to invest in real estate. However, Polish law imposes special requirements applicable to constitution based on individual types of companies – ie, not binding the requirements’ fulfilment to the type of business the company will conduct but, rather, to the type of the company. By way of example, some requirements concerning capital, the number of partners, and the legal form of the articles of association apply to limited liability companies and joint stock companies, whereas different requirements apply to partnerships.

Investments are most often made through capital companies, which offer limited liability and allow for deductions such as depreciation and property-related costs. In capital companies, profits are generally subject to double taxation – at the company level and at the level of the shareholder. However, in the case of limited partnerships, double taxation can be neutralised through exemptions and reductions.

An attractive option is the Estonian CIT, which defers taxation (including on real estate sale profits) until the distribution of profits. This solution is available subject to certain ownership or employment-related criteria.

The family foundation – albeit not intended for regular real estate transactions – can serve as a succession planning tool, offering tax benefits in the case of real estate disposal, particularly regarding the deferral or reduction of tax liabilities.

The Polish legal system does not yet have separate, comprehensive regulations dedicated to classic REITs – although the topic has been appearing in legislative and industry discussions for years. Nevertheless, there are funds investing in real estate on the market – mainly in the form of FIZs.

The minimum capital required to establish a real estate investment entity in Poland depends on the legal form in which such an entity operates, as follows:

• limited liability company – minimum share capital of PLN5,000;
• joint-stock company – minimum share capital of PLN100,000;
• a simple joint stock company – minimum share capital of PLN1; and
• limited joint-stock partnership – minimum share capital of PLN 50,000.

The corporate governance requirements for entities used to invest in real estate in Poland depend on the legal form of the entity. By way of example, in the case of a limited liability company, the governance rules are relatively straightforward – operational decisions are made by the management board and the general meeting. Each capital company is required to file annual financial statements and report its beneficial owners to the Central Register of Beneficial Owners, in accordance with the Polish Anti-Money Laundering and Countering the Financing of Terrorism Act.

For joint stock companies, especially those listed on the stock exchange, corporate governance rules are much more extensive. The existence of a management board and a supervisory board is mandatory, as is the regular publication of financial reports and current information relevant to shareholders.

The cost of the annual maintenance and ensuring the accounting compliance of an entity used to invest in real estate in Poland depends primarily on the type of legal structure, the scale of operations, the complexity of financial operations, and legal issues. In the case of the simplest and most commonly used form – a limited liability company – annual expenditures mainly comprise full book-keeping, fees for legal services, submission of financial statements to the National Court Register, and possible remuneration of board members or an auditor (if required).

Polish law recognises several types of contractual relationships that allow a party to use another’s property. The basic and most commonly used form is a lease agreement, which provides for granting the right to use a property in exchange for payment for a fixed or indefinite term. Another commonly used form is a usufructuary lease – based on which, a beneficiary may use of a property and profit from the property being used.

In business practice, there are different types of commercial leases, which are mainly differentiated by the purpose of the lease, the nature of the property, and the way in which the terms of the contract are structured – namely, short-term commercial leases and leases of:

• office space;
• retail space;
• warehouse and logistics space; and
• so-called flex spaces, especially in the office sector.

Although all types of leases are based on the Civil Code, the practical application of its provisions in the commercial real estate sector is subject to a variety of models, adapted to market conditions.

The general principles of a commercial lease agreement result from the Civil Code. Additionally, the sector of commercial leases is based on certain market standards, which – although they are not legal regulations – play an important role in drafting lease agreements. As an example, one can mention standard contract models concerning shopping malls, in which a base rent is accompanied by a turnover rent.

It is worth noting that the situation is different in the case of residential leases. This area is subject to additional regulations resulting from the Act on the Protection of Tenants’ Rights, which introduce – inter alia – rules concerning rent increases as well as restrictions on the landlord’s ability to terminate the lease.

Although the Civil Code formulates general provisions that regulate leases, certain generally accepted market standards have developed in the practice of commercial leases.

As regards the length of the lease, according to the Civil Code, a contract may be concluded for both a fixed and indefinite term. Nevertheless, the dominant practice is that of concluding commercial premises leases for a fixed term – the standard being five-year leases with an option of renewal (mainly owing to limited options for early termination of an agreement concluded for a fixed term).

With regard to the maintenance and repair of a commercial property, the obligations of the parties are usually regulated in detail in the body of the lease agreement. The tenant is responsible for minor repairs and maintenance of the premises resulting from ordinary use. In accordance with Article 681 of the Civil Code, this includes repairs to floors, doors and windows, the painting of walls, and ongoing servicing of technical installations. At the same time, tenants often incur costs for much larger expenditures in the form of improvements to the premises, especially when the premises are handed over without finishing work (core and shell) or require adaptation to specific purpose.

As for the frequency of rent payments, monthly billing is the predominant solution in commercial lease contracts; this is primarily due to the requirements of financing banks. Additional service changes are also a common feature in the market practice of commercial leases in Poland.

In the case of leases of commercial premises, the amount of rent throughout the duration of the lease may change, depending on the provisions of the lease itself and the legal measures used. Pursuant to the Civil Code, the landlord has the right to unilaterally increase the rent, which is regulated by Article 685(1) of the Civil Code (but it is possible to make a provision in the lease agreement for exclusion of this regulation). An important aspect is that such a change may take place without the tenant’s consent.

Furthermore, a rent indexation mechanism is often introduced in commercial leases. The indexation may be effected on the basis of official indices, such as:

• the Harmonised Index of Consumer Prices (HICP) published by Eurostat; or
• the annual average consumer price index announced by the Polish statistics office (Statistics Poland).

In respect of shopping centres and retail parks, the tenant is often required to pay a turnover rent, in addition to the base rent.

As specified in 6.5 Rent Variation, it is possible either for the landlord to:

• unilaterally increase the rent amount in accordance with a statutory regulation – although the lease agreement may provide for the regulation to be excluded; or
• make a provision in the lease agreement for an index (eg, the HICP) – based on which, the rent indexation is effected.

Turnover rent is determined on a case-by-case basis by the turnover generated by a tenant on the leased premises.

In the Polish legal system, the lease of non-residential premises is generally subject to VAT at the standard rate of 23%. Short-term rentals may be taxed with 8% VAT.

As mentioned in 6.4 Typical Terms of a Lease, in the market practice of commercial leases, additional service charges are standard. They include the tenant’s share of the costs of the day-to-day operation and maintenance of the building in which the premises are located. These costs may include cleaning of common areas, security guard service, maintenance and repairs, energy consumption in common areas, and building insurance. They are set at the level of the entire building and distributed proportionally among the tenants, usually on the basis of the space occupied. Sometimes the rent is set on an “all-in” basis, already including service charges.

In addition to common costs, the tenant also bears individual charges – ie, those resulting from the consumption of utilities on the premises (eg, electricity, water, gas and heating), as well as a charge for waste disposal. These costs are charged separately, according to meter readings or on the basis of separate agreements concluded with utility providers.

Furthermore, in the case of leasing premises in a shopping centre, it is common for a so-called advertising fee to be paid by the tenant for the common promotional activities of the facility.

Although it does not result directly from legislation, it is common practice for parties to a commercial lease to agree that costs related to the maintenance and repair of common parts of the property (eg, car parks or green areas) are generally borne by tenants as part of the so-called service charges.

Although it does not result directly from legislation, it is common practice for parties to a commercial lease to agree that costs related to utilities and telecommunications (eg, water and electricity consumption in common areas, as well as heating, ventilation, air conditioning, sewage disposal, or access to common telecommunications systems) are generally borne by tenants as part of the so-called service charges.

The payer of real estate tax in Poland is the owner of the property, unless it is in so-called autonomous possession – in which case, the tax obligation shifts to the possessor. A tenant, as a dependent possessor, is not a taxpayer.

However, in practice, real estate-related taxes are often contractually transferred to tenants via lease agreement. These costs are effectively passed on to tenants as part of monthly service charges.

As a general rule, the obligation to insure buildings rests with landlords. Therefore, landlords bear the cost of an insurance policy covering the property as a whole.

At the same time, tenants are usually required – also at their own expense – to take out individual insurance covering any fortuitous events (such as fire, flood, explosion, or storm) and movable property located in the leased premises, as well as third-party liability policies related to the business conducted.  If fit-out work is carried out on the premises, tenants may additionally be required to take out specialised CAR (contractors’ all risks)/EAR (erection all risks) insurance, covering construction and assembly risks.

In a lease agreement, the landlord may specify the permitted uses of the premises while indicating, for example, the type of activity that may be carried out therein or request compliance with the general rules for permitted use of the building. In addition to the contractual provisions, the tenant’s use of the property and the premises is also subject to restrictions under commonly applicable regulations, such as construction law, fire safety regulations and environmental protection.

Tenants may alter or improve the premises subject to lease but this right – albeit commonly used in commercial lease practice – is subject to strict regulations both under the law and under the terms of the lease agreement concerned.

As regards commercial leases, it is common practice for premises to be delivered to the tenant as shell and core – ie, requiring fit-out works or as space that requires adjustment after being used by another tenant. In such a situation, the parties to a commercial lease very often make an arrangement whereby the tenant undertakes to make improvements to the leased premises in order to adjust the space to their needs and the profile of business conducted.

When undertaking construction or fit-out work, the tenant must exercise due diligence and proceed in accordance with applicable laws, building rules and regulations, and approved design documentation. It is standard practice in commercial leases to specify a precise time limit for a completion of such works, as well as to impose an obligation on the tenant to have adequate third-party liability insurance and specialised CAR/EAR type policies (covering construction and assembly risks).

However, the reverse model is also applied in market practice, whereby the landlord undertakes to carry out the fit-out and adjustment works before delivery of the premises to the tenant.

In the Polish legal system, the lease of residential premises is governed by detailed regulations. Besides the Civil Code, the rules governing such leases are also included in specific acts (such as the Act on the Protection of Tenants’ Rights). Commercial leases – regardless of whether they concern office space, warehouse space, or retail space in a shopping mall – are governed by the Civil Code and the differences between these leases result from the content of the lease agreements and prevailing market standards.

Under bankruptcy law, the declaration of a tenant’s bankruptcy does not automatically lead to termination of the lease but gives special rights to both the trustee in bankruptcy and the landlord. Furthermore, under Polish law, it is not possible to grant the landlord the right to terminate the lease agreement in the event of a tenant’s bankruptcy (such a clause would be absolutely invalid under Polish law).

The trustee in bankruptcy, who manages the bankrupt tenant’s assets, may decide to terminate the lease at any time during the proceedings – even if the lease is for a fixed term.

In the event of the expiry or termination of a commercial lease, the tenant has no right to continue to occupy the premises under lease, as the tenant’s right to use the premises ceases when the agreement ceases to be in force. According to the Civil Code, upon termination of the lease, the tenant must return the premises in an undisturbed condition – meaning that they must empty the premises of their items and restore the premises to their original condition (unless the agreement provides otherwise). At the same time, however, the tenant is not liable for the normal wear and tear of the premises resulting from proper use of the premises.

In practice, the tenant should return the premises to the landlord in the manner stipulated in the contract. This usually takes place on the basis of a handover certificate.

In the lease agreement, a contractual penalty may be stipulated by the landlord in the lease agreement for each day of delay in surrendering the premises. In addition, it is a market standard in commercial leases that the tenant agrees in writing before a notary to submit to voluntary enforcement with regard to surrendering the leased premises to the landlord at the expiry of the lease. Thanks to the notarial instrument, the landlord may proceed with enforcement without having to go through the full court procedure, which significantly speeds up the process of recovering the premises.

Per market standard, assignment or sublease agreement is usually only possible with landlord’s consent (no option for free assignment or entering into sublease agreement by tenants is also a requirement applied by financing banks). If the tenant assigns without the landlord’s consent, this may result in a breach and termination of the lease, topped by a contractual penalty imposed on the tenant.

Both the landlord and the tenant have certain rights to terminate the lease, which arise both from the law and from the provisions of the lease agreement itself.

In the case of a lease agreement executed for an indefinite term, both the landlord and the tenant have the right to terminate the agreement without any additional reason while observing the notice period. If the parties have not provided for details of the notice period in the agreement, the Civil Code applies.

In the case of a lease for a fixed term, the situation is different because termination of a commercial lease concluded for a fixed term is only possible in circumstances that are specified precisely in the lease agreement itself. If the parties have not stipulated appropriate provisions allowing termination by notice, such a possibility is excluded.

The most common reasons for termination of a fixed-term commercial lease agreement that are listed therein include, inter alia, the tenant’s breach of financial obligations, failure to carry out fit-out or refurbishment works on the premises, and violations related to the use of the premises itself.

Lease agreements do not have to be recorded in any registers; however, the rights under a lease agreement may be disclosed in the land and mortgage register kept for the property under lease. In such a case, Polish regulations require that the lease agreement be executed in written form with signatures certified by a notary.

The lessee may be forced to vacate the premises in the event of early termination of the lease – for example, as a result of termination by the landlord. Forcing the tenant to vacate the leased premises (if the tenant does not voluntarily vacate) requires initiation of enforcement proceedings and eviction by an enforcement officer. Eviction by an enforcement officer requires either:

• a final court judgment; or
• a title to enforce a notarial instrument in which the tenant has undertaken to voluntarily surrender the leased property to the landlord upon expiry of the lease agreement.

Such notarial deeds are in practice a standard security measure expected by landlords and financing banks.

As regards the termination of a lease by a third party, such a situation is possible in the event of the tenant’s bankruptcy. In such case, termination notice is sent by a trustee in bankruptcy.

Under Polish law, the landlord may claim from the lessee:

• outstanding payments (rent, other fees); and
• compensation for breach of agreement and its early termination (eg, lost profits in the form of lost rental income).

Polish law does not provide for any specific limits on such compensation.

In addition, clauses imposing contractual penalties on tenants for breach of specific obligations are standard in lease agreements.

Lease agreements typically include measures aimed to secure the tenant’s payment obligations – for example, a security deposit or a letter of guarantee issued by a bank or insurance agency, or a notarial instrument including tenant’s statement of voluntary submission to enforcement with regard to payments.

Under Polish law, fixed-price agreements and agreements based on the cost of project implementation are both allowed. However, in practice, fixed-price agreements are the preferred option.

A mixture of the above structures may be encountered in practice. Complexity of the contract may vary depending on the scope of the project.

In Polish market practice, liability for defects in design documentation is usually borne by the designer (architect), with whom a separate agreement has been concluded for preparation of project design documentation. The designer is liable to the investor under a statutory warranty for defects or under a contractual quality warranty granted in the agreement for the design documentation concerned.

However, responsibility for the actual execution of the project rests with the contractor with whom the investor concludes a contract for construction works. In practice, the role of the contractor (or general contractor) is limited to verifying the previously prepared design documentation.

In market practice, there are agreements in which one entity prepares the design documentation and carries out the construction works (ie, a design and build contract). In such a case, the same entity is responsible to the investor for both the design and the implementation of the project.

Construction contracts often contain various forms of security arrangements to protect the interests of the parties against potential project risks. The most commonly used security measures include:

• imposing on the contractor an obligation to maintain CAR insurance (in which the investor may also act as a co-insured party);
• a payment guarantee;
• a security deposit;
• a declaration of voluntary submission to enforcement;
• substitute performance;
• contractual penalties;
• retained amounts; and
• construction supervision.

In market practice, the work schedule and a detailed list of milestone deadlines are integral parts of a contract for construction works. The parties to the contract may agree that the investor will be entitled to charge contractual penalties in the event of contractor’s breach of the work schedule – the amount of penalty is agreed by parties to the contract.

If the contractual penalties do not cover the full amount of damage suffered by the investor, the contract may provide for an option to claim damages in full. Such a provision gives the investor an additional tool to protect their interests in situations where delays have a significant impact on the project.

The choice of additional form of security depends on the specifics of the project, the financial capacity of the contractor, and the preferences of parties to the contract. In practice, letters of guarantee issued by banks and insurance agencies are most commonly used, owing to their effectiveness and widespread acceptance in the market. Other forms of security encountered in market practice include retained amounts and security deposits.

Polish law provides for the option to encumber an investor’s property with a compulsory mortgage in the event of arrears in payments to the contractor or architect. However, such an encumbrance requires the contractor or architect to obtain either a final court judgment or a final court decision securing the contractor’s or designer’s claim by means of a compulsory mortgage.

In practice, cases of voluntary encumbrance of property by an investor in order to secure the contractor’s or architect’s claims are unheard of.

In Polish construction law, an occupancy permit is required before a building can be used. The requirements for such a permit are strictly defined by law.

The sale of commercial real estate in Poland is generally subject to VAT at the standard rate of 23%. A general VAT exemption applies to real estate supply, except when the supply occurs within the scope of the “first settlement” or when the period between the “first settlement” and the supply date is shorter than two years. This exemption is optional, meaning both the buyer and seller (if active VAT taxpayers) can jointly decide to subject the transaction to VAT. If the exemption does not apply, VAT is charged only if additional VAT exemption conditions are not met – for example, the vendor is not entitled to deduct input VAT on the property or the vendor has not incurred improvement expenses allowing for VAT deductions.

As mentioned in 6.7 Payment of VAT, the standard VAT rate for commercial properties is 23%, whereas for residential properties it is 8%. If the sale is not subject to VAT, a 2% TCLT on the property’s market value applies.

In Poland, real estate acquisitions are generally subject to TCLT at a 2% rate, applied to the market value of the property. Share deals are not subject to TCLT. However, in share deal transactions, the buyer cannot benefit from property depreciation or recognise the acquisition cost of the real estate, as it is allocated to the shares transaction and recognised under a different income source.

As a result, real estate transactions are usually structured as asset deals. For project companies, special purpose vehicles are commonly used, and intra-group transactions often involve corporate reorganisations such as mergers and demergers.

Owners of premises are subject to real estate tax payable with regard to land, buildings and structures, as well as usufruct of land. The annual tax liability on the property depends on the location and type of the property. The rate of real estate tax on structures amounts to 2% of initial value.

Moreover, a minimum income tax on earning from buildings was introduced on 1 January 2018 at rate of 0.035% per month of the initial tax value of the buildings (exceeding PLN10 million). The minimum income tax covers all buildings located in Poland that are rented, leased, or used on the basis of a similar agreement.

In Poland, withholding tax (WHT) applies to certain income earned by non-residents (eg, dividends, interest or royalties). Entities paying these amounts to non-residents are obligated to calculate, withhold and remit the tax within the appropriate deadline.

Income from rental or sale of real estate located in Poland earned by non-residents is not subject to WHT but is taxed under general rules as income earned in Poland by taxpayers with limited tax liability. Rental income is subject to taxation, with the rate depending on the chosen form of taxation. Corporate income may be taxed at CIT rates of 9% or 19%.

The provisions of the relevant double tax treaty may affect the scope and method of taxation of non-residents’ income in Poland.

Both the rental and sale of real estate may be subject to VAT. Given that rental income is not subject to WHT, the property owner is responsible for settling income tax.

In Poland, owning real estate used for business purposes offers tax benefits, particularly through depreciation deductions. Real estate companies can deduct tax depreciation of buildings, but only up to the amount of accounting depreciation that impacts the financial result. In practice, tax depreciation cannot exceed accounting depreciation. This limitation has raised concerns when a company does not apply accounting depreciation according to its accounting policies. However, administrative courts currently tend to support taxpayers’ interpretations.

Depreciation rates can be individually determined or increased based on the type of the asset, its technical condition, or its usage intensity. Residential properties, even when used for business, are no longer eligible for depreciation as of 2023. Non-residential buildings, however, can still be depreciated using statutory, individual or increased rates. Additionally, property-related expenses – such as real estate tax, financing costs, and repairs – are generally recognised as tax-deductible. This allows businesses to reduce their taxable income and benefit from lower tax obligations.