Changes in perpetual usufruct.

22.10.2018 r.

Changes in perpetual usufruct.

On 5 October 2018, the Act of 20 July 2018 on transformation of the right of perpetual usufruct of land developed for housing purposes into the right of ownership of such land came into force.

In accordance with the above mentioned legal act, as of 1 January 2019, the right of perpetual usufruct of land developed for housing purposes will be transformed into the ownership right to such land.

Land developed for residential purposes should be understood as real estate developed exclusively with buildings:

(1) single-family dwellings, or
2) multi-family dwellings in which at least half of the number of dwellings are dwellings, or
3) referred to in point 1 or 2, together with farm buildings, garages, other construction works, or
4) construction equipment enabling proper and rational use of residential buildings.

It is also worth mentioning that according to the provisions of the new act, buildings and construction equipment located on the land become a component of this land on the day of transformation.

The basis for disclosing the ownership right to land in the land and mortgage register and in the land and building register is to be a certificate confirming the transformation, issued, among others, by the head of the commune (mayor, mayor of the city), district or voivodeship board.

On account of the transformation, the new landowner shall pay a fee to the former landowner for 20 years from the date of transformation. The fee is equal to the annual fee for perpetual usufruct, which would be in force on the transformation date, with the possibility of granting a discount on the fee for a given year.

It is also possible to pay a one-off fee. In this case, the rebates on this fee are to be as high as 60% if the entire amount is paid in the year in which the conversion took place.

/JF/