The Polish Parliament is currently discussing a proposal for the Supply Act, which aims to increase the amount of land available for housing developments. The new regulations would simplify the procedures for housing developments in Poland. 

The proposed bill provides for a mechanism for the gradual release of land owned by the State Treasury and local government authorities. For investors, this means potential access to much more land for development. The bill provides for favourable conditions for the acquisition of such land, provided that housing projects are carried out on it within a specified timeframe.

There is also to be a breakthrough in the release of agricultural land. The proposal includes provisions for areas within urban boundaries that formally remain agricultural land. According to these provisions, class IV-VI land will be excluded from use for agricultural production automatically. As for class I-III land, a simplified de-agriculturalisation procedure will apply – the decision will no longer be made at the ministry level, but at the municipality level.

The bill is also intended to liberalise trade in agricultural land. The key change is the exemption of land intended for housing development from the very restrictive Act on the Formation of the Agricultural System. According to the current regulations, agricultural plots larger than 0.3 ha can only be purchased by persons with the status of a farmer, which effectively blocks investors. The new regulations exclude this restriction for areas with housing potential.

Furthermore, the rule that perpetual usufruct cannot be established for housing purposes, which has been in force since the beginning of 2019, is to be abolished. Investors will therefore be able to acquire land for the purposes of a housing project at a lower cost. The high one-off cost of purchasing the property will be avoided, but the investor will have to pay an annual fee.

The changes also affect the current requirements regarding housing developments, such as maintaining a minimum share of retail and commercial space in housing developments and providing a minimum number of parking spaces as part of a housing development. The new regulations waive these requirements.

There will also be an important change for investors who have to make modifications to the traffic system by building or making alterations to public roads. Currently, the Public Roads Act does not allow investors planning a property development project that entails construction of roads to finance the project easily without being involved in the construction work. This is now set to change. It will be permissible for an investor to transfer funds directly to the road management authority without playing a part in the actual alterations made to the road layout. The road management authority will be obliged to use the funds provided solely for the purpose specified in the agreement, within a maximum period of five years.

The Supply Act is expected to bring significant changes to the real estate market. In the long term, investors are expected to gain access to a larger supply of public and agricultural land. However, the form of the proposed legislation is still likely to change, and only the final wording will allow us to assess the impact of the new regulations on the real estate sector.