Sale of an apartment at a notary's office
Regardless of the form of ownership of the apartment, its sale requires the preparation of a contract in the form of a notarial deed. Otherwise, such a transaction is invalid.
Learn how to prepare a sales contract for an apartment that is in compliance with the law, what a preliminary contract is, how to secure payment, and how much the notary fee is.
In case of any doubts, please contact a notary to clarify any uncertainties and arrange a meeting at the notary’s office.
Sale and purchase agreement of a flat
The regulations clearly state that the sale of an apartment, like any agreement concerning the transfer of real estate, must be concluded in the form of a notarial deed. If the parties do so in ordinary written form, such an act will be null and void.
Typically, a residential unit sales agreement should contain the following provisions:
- seller’s and buyer’s data – their full name, address and tax identification number (NIP);
- a precise description of the property – address, apartment number, surface area, land and mortgage register number, and any limitations on its use;
- the determination of the value of the apartment;
- the determination of which party bears the additional costs associated with the sale, such as notary fees or entry into the land and mortgage register;
- the deadline for handing over the apartment;
- the signatures of the parties to the transaction confirming their consent to conclude the agreement.
Sale of an apartment in Warsaw
“Apartment” is a colloquial term for a “residential unit” defined in legal regulations as a “self-contained residential unit” under the Act on Ownership of Premises of June 24, 1994, § 2, para. 2 as:
a delimited space within a building, consisting of one or more rooms, intended for permanent residence by people.
Translated: A residential unit is intended to meet the housing needs of at least one person and, together with auxiliary rooms such as a kitchen, bathroom, toilet and hallway, forms a whole that allows for comfortable living. In our notary office, the most common types of apartments sold are:
- Separate ownership apartments,
- Cooperative apartments, which are cooperative ownership rights to the premises (less common),
- Cooperative tenancy rights to the premises (also less common), and
- Municipal apartments.
It is worth noting that the sale of municipal apartments is possible only after their prior repurchase from the municipality.
A separately owned residential unit
The owner of a separately owned apartment has full right to dispose of their property – they can rent, sell, or pass it on in inheritance. Such a person is the owner of the apartment and also has joint ownership of common areas, such as staircases, roofs, facades, and also areas adjacent to the building. In addition, the apartment owner has a fractional ownership of the land on which the residential building is located.
Any ownership changes related to a separately owned apartment must be registered in the land and mortgage register, which requires payment of appropriate fees.
Toute modification de propriété concernant un appartement en propriété distincte doit être enregistrée dans le registre foncier, ce qui implique le paiement des frais correspondants.
Cooperative apartment ownership
A cooperative apartment is formally not owned by its occupant. Rather, they have limited property rights that are regulated by the Act on Housing Cooperatives of December 15, 2000. However, in practice, the occupant has very similar rights to a property owner. This type of apartment can be sold, rented, and inherited on the same terms as an apartment that is separate property. The difference lies in the fact that, due to limited property rights, the occupant of a cooperative apartment cannot fully dispose of their property like an owner of an apartment under separate property ownership. They must, for example, report the sale transaction to the housing cooperative and obtain the approval of the cooperative’s board. Sometimes it is also necessary to pay fees related to the transfer of the right to the apartment and comply with other requirements regulated by the cooperative.
Tenancy apartment
The holder of a tenant cooperative right to a flat is not its owner, but has the right to use the flat under specified contractual conditions. The tenant cooperative right to a flat means that the flat is made available for use by the cooperative based on a contract.
In order to sell a tenant cooperative flat, it must first be transformed into separate ownership of the flat. To carry out this transformation of the tenant cooperative right to a flat into owned property, several conditions must be met:
- The legal situation of the land on which the building is located must be established; it should be free from claims by other entities.
- Any investment made by the cooperative in the flat must be repaid.
- All outstanding rent payments associated with the flat must be settled.
The process of transforming the right to a flat into ownership must be confirmed by a notarial deed drawn up by a notary. The acquisition of separate ownership is only recognized upon registration in the land register, which is why it is necessary to establish it.
See also:
Certificate of inheritance
Learn how to obtain a notarial certification of inheritance, when it is necessary to obtain a court decision on acquiring an inheritance, what documents should be brought to the notary office, and what is the fee for the notary’s services.
Protocol of the company meeting
Find out when the presence of a notary at a shareholders’ meeting is necessary, what should be included in the minutes of a shareholders’ meeting of a limited liability company and a joint-stock company, and how much does it cost to draw up a notarial protocol.
Notarial testament
Learn about the types of wills and how to prepare such a document to avoid it being challenged. Find out how to include a collection clause and who can be disinherited.
In case of any doubts, I will explain the principles of preparing a contract for the sale of an apartment, advise on how to formulate a preliminary agreement, indicate the amount of the PCC tax, explain applicable exemptions, and inform about the necessary documents and information to be prepared.
Preliminary agreement for the sale of an apartment
Usually, the parties of a transaction are not ready to sign a final agreement for the sale of an apartment immediately. In such a case, to secure the agreed conditions of the sale and to gain time for, for example, settling credit matters, they decide to prepare a preliminary agreement, in which the seller assures that they will sell the apartment, and the buyer undertakes to purchase it for a specified price and on specified terms. Such an agreement can be binding on one or both sides. In the latter case, the right to demand the conclusion of the promised agreement belongs exclusively to one party, for example, only to the seller.
A preliminary agreement can take the form of a simple written agreement, but sometimes the parties choose the form of a notarial deed to emphasize the strength of the commitment. A notary can help formulate the preliminary agreement in such a way that it actually guarantees the conclusion of the promised agreement.
In the event that one of the parties wishes to withdraw from the previously agreed transaction, there is a possibility of:
- demanding payment of compensation for failure to execute the preliminary agreement,
- court enforcement of compensation resulting from failure to execute the preliminary agreement,
- court enforcement of the promised agreement.
Documents needed for the sale of an apartment
When appearing at a notary office to draw up and sign a notarial deed of sale of an apartment, the following documents and information must be provided:
Personal data of the parties to the apartment purchase agreement: names and surnames, names of parents, residential address, marital status, and, if applicable, an official proof of the existence of a marital property agreement, ID card or passport number, PESEL (Polish national identification number), if one of the parties is represented by a power of attorney, the original power of attorney must be presented.
In addition to the above, depending on the form of ownership of the apartment, the following documents must be presented:
Documents required for the sale of an apartment that is a separate property with a land and mortgage register
- The land and mortgage register number,
- The basis of acquisition of the apartment, for example, one of the following documents:
- Extract from a notarial deed of sale or donation agreement,
- Final court decision confirming the acquisition of inheritance,
- Certificate of inheritance,
- Certificate from the Head of the Tax Office confirming that inheritance or gift tax has been paid or that the acquisition is exempt from tax, or that the tax liability has expired due to limitation period, if the acquisition was made by inheritance or donation, or free transfer of co-ownership or legal share after January 1, 2007,
- Market value of the apartment,
- Certificate of revitalization from the Municipal Office confirming that the property is not located in the revitalization area or in the Special Revitalization Zone,
- Certificate from the administration/cooperative on the amount of debt for rent and other charges,
- Certificate of absence of persons registered in the apartment,
- Extract from the register of premises,
- Preliminary agreement of sale, if signed,
- Conditions and date of delivery of the apartment.
Documents required for the sale of a cooperative ownership right to an apartment:
- certificate from the housing cooperative confirming the ownership right to the premises,
- land and mortgage register number (copy from the land and mortgage register) if it has been established,
- basis of acquisition, such as one of the following documents: excerpt from the notarial deed of sale or donation agreement, final court decision confirming the acquisition of inheritance, certificate of inheritance, certificate from the Head of the Tax Office confirming that inheritance and donation tax has been paid or that the acquisition is exempt from tax, or that the tax liability has expired due to prescription, in a situation where:
- the acquisition was made through inheritance or acquisition by prescription,
- the acquisition was made through donation, the donor’s instruction, non-compensated termination of co-ownership or inheritance by compulsory portion after January 1, 2007,
- market value of the apartment,
- certificate from the administration/cooperative regarding the amount of debt related to rent and other charges,
- certificate of no registered residents in the premises,
- excerpt from the register of premises,
- pre-contract of sale, if signed,
- conditions and date of delivery of the apartment.
Selling an apartment and taxes
When selling a property, there may be several taxes to consider, including the tax on civil law transactions (PCC), value-added tax (VAT), and personal income tax (PIT).
Personal Income Tax
According to Art. 10, paragraph 1, point 8 of the Personal Income Tax Act of 26 July 1991, the source of income is the paid disposal of:
- real estate or its parts and a share in real estate;
- cooperative ownership of a residential or service premises and the right to a single-family house in a housing cooperative;
provided that:
- the paid disposal does not occur in the performance of business activity and
- it was made in the case of the paid disposal of real estate and property rights before the end of 5 years, counting from the end of the calendar year in which the acquisition or construction took place.
Personal income tax is imposed on the seller, and the difference between the income from the paid disposal of the property or property rights and the costs of obtaining the income is subject to taxation.
Tax on Civil Law Transactions (PCC)
Most property sales transactions are subject to the PCC tax, the amount of which is regulated by the Act on the Tax on Civil Law Transactions of 9 September 2000. According to the provisions, the sale of real estate is subject to a 2% civil law transaction tax (PCC).
The PCC tax liability arises at the time of signing the agreement (Art. 3 of the PCC Act) and, according to Art. 4 of the PCC Act, is charged to the buyer.
Basis for taxation with PCC tax
According to Art. 6 of the PCC Act, the basis for taxation is the market value of the property. Usually, this is the sale price stated in the contract. If this value is considered undervalued by the tax office, the parties are asked to adjust it. If, after correction, the price is still considered undervalued, an expert is appointed by the tax office to determine the market value. If the value determined by the expert differs by more than 33% from the value stated in the contract, the buyer will bear the costs of preparing the opinion, and the value of the property determined by the expert will be used as the basis for taxation.
Value-Added Tax (VAT)
The PCC tax does not apply if the seller is a VAT taxpayer. In such a case, the sale is exempt from PCC, but it is subject to value-added tax (VAT) at a rate of 23%.
Court fee for the sale of an apartment
The amount of court fees results from the Act of July 28, 2005, on court costs in civil cases.
In the case of selling an apartment, the notary charges a fee for registering ownership in the land and mortgage register in the amount of 200 PLN.
If it is necessary to establish a land and mortgage register for the purchased property, the notary will charge a fee of 60 PLN.
Sale of an apartment - Notary fees
Preparing a sale agreement for a flat with a notary involves the following costs:
- fee for submitting the land and mortgage register application,
- court fee for making entries in the land and mortgage register,
- taxes collected by the notary on behalf of the State Treasury – civil law transaction tax and VAT,
- notarial fee for copies at a rate of 6 PLN per page.
The notarial fee is determined by the Minister of Justice’s regulation. The notary will determine the fee based on the analysis of the specific case documents. In the case of selling a flat, the basic amount of the notarial fee is half of the following values:
- PLN 100 for flats valued up to PLN 3,000,
- PLN 100 + 3% of the excess over PLN 3,000 for flats valued over PLN 3,000 up to PLN 10,000,
- PLN 310 + 2% of the excess over PLN 10,000 for flats valued over PLN 10,000 up to PLN 30,000,
- PLN 710 + 1% of the excess over PLN 30,000 for flats valued over PLN 30,000 up to PLN 60,000,
- PLN 1,010 + 0.4% of the excess over PLN 60,000 for flats valued over PLN 60,000 up to PLN 1,000,000,
- PLN 4,770 + 0.2% of the excess over PLN 1,000,000 for flats valued over PLN 1,000,000 up to PLN 2,000,000,
- PLN 6,770 + 0.25% of the excess over PLN 2,000,000, but not more than PLN 10,000 or PLN 7,500 (for the first tax group) for flats valued over PLN 2,000,000.
The notary’s fee is subject to a 23% PTiU (VAT) tax.
Example calculation of the notarial fee for the sale of a flat:
In the case of selling a flat valued at PLN 400,000, the maximum notarial fee is PLN 1,185 (PLN 505 + PLN 680) plus 23% VAT.
