Inheritance of property in Poland

Inheritance of property in Poland
Michał Gawlak

Michał Gawlak

Partner / Attorney-at-law

There are many obligations when it comes to inheriting property in Poland. The confirmation of inheritance acquisition itself is only the tip of the iceberg. The inheritor must remember about verification and regulation of the property’s legal status. Another crucial thing to remember is the tax on inheritance and gifts. Who can inherit property in Poland? What should an inheritor prepare for? We will discuss the answers to these questions in this article.

Inheritance of property in Poland – who can inherit?

Anyone who has legal capacity can become an inheritor of property in Poland. This is what the provisions of the Civil Code say. A natural person who is not alive at the time of opening the succession, cannot be an inheritor. This is also the case with legal persons that do not exist at that time. However, a child that has already been conceived when the succession is opened can be an inheritor if it is born. Having that in mind, every person that is eligible to inherit under the Act or the will may become an inheritor.

Property in Poland may be inherited either under the statutory right or under a will. In the case of inheritance under the will, the inheritance is given to a person indicated by the testator. If the will does not specify how to distribute the estate, the executor of the inheritance decides about it. If there is no will, the inheritance results from the Act. The provisions of the Civil Code regulate the rules of statutory inheritance.

Inheritance of property in Poland and the confirmation of the inheritance’s acquisition

Confirmation of the inheritance’s acquisition in Poland may occur in two ways:

  • as a result of court proceedings – court decision on the acquisition of inheritance,
  • as a result of a proceeding before the notary public – an inheritance certificate in the form of a notarial deed.

The Civil Code states that the court issues a decision on the acquisition of inheritance in Poland without a trial. The court examines ex officio who qualifies as a potential inheritor and whether the testator left a will. The decision on the acquisition of inheritance must relate to all the inheritors. Moreover, it must refer to the entire estate. It is impossible to decide on the acquisition of inheritance only with regard to its parts.

To establish who and to what extent inherits after the testator, one can also contact a notary public. The Notary Public Act states that he can prepare a certificate of inheritance in Poland. This concerns both statutory and testamentary inheritance. The only exception is succession based on special wills. All inheritors must be present simultaneously in the notary’s office. The notarial certificate of inheritance may be created only if there is a joint request for certification of inheritance. A notary public cannot undertake actions leading to determining the group of inheritors. The notarial certificate of inheritance relies on declarations of the existence or non-existence of persons who would exclude known heirs from inheritance or persons that would inherit together with them. It is also based on wills made by the testator, or the lack thereof. Such a statement requires the inheritance protocol.

Need inheritance legal support in Poland?

Did you inherit assets in Poland and don’t know what to do next? Contact us today and get a free quotation for our services.

Responsibilities of the new owner of a property in Poland

The court confirmation of the acquisition of inheritance or the notarial inheritance certificate is not the end. There are other obligations related to inheriting property in Poland.

The change of owner should be indicated in the land and mortgage register of the property. To do that, the inheritor must request the entry of the property right in the land and mortgage register. The application must be submitted on a dedicated form [PL: KW-WPIS]. It is subject to a fee in the fixed amount of 200 PLN.

Inheritance of property in Poland and the tax on inheritance and gifts

According to the law, inheritance of real estate in Poland is subject to taxation – namely the tax on inheritance and gifts. The tax obligation occurs when the court issues the decision on the acceptance of inheritance. Alternatively, after the registration of the inheritance certificate by a notary public.

The value of the tax determines the tax group to which the inheritor belongs. Belonging to the group depends on the inheritor’s personal relationship with the testator.

The classification to a particular tax group is as follows:

  • group I- spouse, descendants, ascendants, stepchild, son-in-law, daughter-in-law, siblings, stepfather, stepmother, parents-in-law,
  • group II – descendants of siblings, siblings of parents, descendants and spouses of stepchildren, spouses of siblings and siblings of spouses, spouses of siblings of spouses, spouses of other descendants,
  • group III –other acquirers.

The tax is calculated based on the surplus of the tax base over the tax allowance, according to art. 15 of the Act on the inheritance and gifts tax. In the event of inheriting property in Poland, the tax base is its pure value. The condition of the property on the date of its acquisition determines it. Another factor is the market price on the date on which the tax obligation occurred.

Need more information about inheritance tax in Poland? Read our article Inheritance tax in Poland!

Inheritance and gifts – tax-free amounts

The tax-free amount for each of the tax groups is as follows:

  • 9.637 PLN –if the acquirer belongs to tax group I
  • 7.276 PLN – if the acquirer belongs to tax group II,
  • 4.902 PLN – if the acquirer belongs to tax group III.

One should also remember about the tax exemption from article 4a of the Inheritance and Gift Tax Act. Inheritance of property in Poland by a spouse, descendants, ascendants, stepchild, siblings, stepmother and step-father under certain conditions is exempt from the tax on inheritance and gifts. This applies if they report the inheritance of property to the tax office. They must do it within 6 months after the court’s decision on the acquisition of the inheritance.

Those who accepted the inheritance have further obligations. They have to notify the competent tax office. One should do that within a specified time to avoid financial penalties. One should report the inheritance of property within 6 months after the court’s decision on its acquisition.

This regulation relates to the people exempt from the tax, based on article 4a of the Act on the inheritance and gifts tax. Those who have to pay the tax have one month for reporting inheritance and for settlement of the tax.

One must pay the tax within 14 days from the date of a decision determining the tax amount from a tax authority.

Inheritance of property in Poland and property tax relief

The inheritors who are obliged to pay the tax on the inheritance of property in Poland may use the so-called property tax relief. The art. 16 of the Act on inheritance and gifts tax regulates it.

Using the tax relief is possible under the condition that the inheritor:

  • is not the owner of another real estate and is not granted e.g. a cooperative ownership right to a property,
  • is not a tenant of another property,
  • will reside in the acquired real estate, as a registered permanent resident,
  • will not sell the inherited real estate for 5 years.

An additional restriction is the size limit of the inherited property. Using the tax relief, the inheritor will not pay the tax on the property with a residential area below 110 m22. In the event of inheriting a property with a larger area, the inheritor will pay the tax on the pure value of the area exceeding 110 m2.

In the case of purchasing a share in a property, the tax relief is applicable according to the size of the share.

Summary

Inheritance of real estate in Poland is just the beginning of a long and costly path. An inheritor must take care of his or her interests and regulate the legal state of the real estate. His indolence may lead to tax debt and the imposition of a large fine.

Have you inherited property in Poland? Do you want to know how to proceed further? Do not hesitate to contact us. We have many years of experience in inheritance proceedings. We offer support in regulating legal matters related to inherited properties in Poland.

Featured expert

Michał Gawlak

Partner / Attorney-at-law

Contact us

    CGO Legal

    CGO Legal
    Justyna Sączawa
    Administration specialist
    CGO Legal
    Anna Ślusarek
    Administration specialist
    Accounting