Transformation of perpetual usufruct on residential land into ownership right

The government adopted a bill on transformation of perpetual usufruct on residential land into ownership to such land. According to the bill, since January 1st, 2018, the perpetual usufruct of land housing detached and multi-family houses shall be legally transformed into the title of ownership to such land to be held by the owners of houses and residential premises.

Individuals who shall legally become owners of such land shall however have to pay for transformation of the perpetual usufruct. As a general rule, the fee shall be annual and shall be paid within 20 subsequent years. The bill includes a range of discounts for those who decide to pay the on-off transformation fee within 5 years after the transformation of perpetual usufruct (60% if the payment is made within a year upon transformation, with each subsequent year the discount shall be reduced by 10%). It is worth emphasizing that the bill includes a range of discounts with respect to transformation of perpetual usufruct of the properties owned by the State Treasury. As for transformation of perpetual usufruct on communal properties, the amounts and forms of such discounts shall be determined by the self-government units themselves.

The ownership of land in land and mortgage registers and in records of land and buildings shall be determined on the grounds of certificates issued by bodies representing the previous land owners – State Treasury and communes. Entries shall be free from stamp duties.

It is predicted for the bill to be debated by the Sejm and enter in force on January 1st, 2019. The Ministry of Investment and Development works at the same time on a solution referring to the transformation of perpetual usufruct on commercial land which first has to be negotiated with the European Commission.