The transformation of perpetual usufruct into ownership is getting closer

On October 05, 2018. the law of July 20, 2018 enters into force. on the transformation of the right of perpetual usufruct of land developed for residential purposes into ownership of such land (Journal of Laws 2018.1716), according to which, at the beginning of 2019, the right of perpetual usufruct will be transformed into ownership of such land. According to the Ministry of Investment and Development, this situation affects approx. 2.5 million owners of apartments and land developed with single-family houses.

Conversion procedure

The basis for disclosing the ownership of land in the Land and Mortgage Register and the Land and Building Register will be a certificate confirming the transformation issued by, among others. The district governor, mayor (mayor, city president). The authority will issue the certificate ex officio within 12 months from the date of conversion, or at the request of the owner within 4 months from the date of application. The certificate will be delivered ex officio to the existing perpetual usufructuary and forwarded to the court keeping the land register. The content will include information about the conversion of the listed land and the obligation to pay the conversion fee. The certificate will be the basis for the entry in section III of the Land and Mortgage Register of a claim for payment of the said fee, with respect to each contemporary owner of the property.

Conversion fee

The amount of the fee will be equal to the annual fee for perpetual usufruct set as of the date of transformation, i.e. January 1, 2019. The fee will be paid by March 15 for a period of 20 years. Local governments will be able to index these fees – already on title – but only using indices announced by the Central Statistical Office. It will also be possible to request payment of the fee as a one-time payment. In this regard, the authority will issue a separate decision. Once all fees or a one-time fee have been paid, the property owner will receive a certificate, which will be the basis for deleting the fee claim entry in Land Register III.

Discount on conversion fee

The competent authority will be able to grant individuals a discount on the fee on the basis of an order of the governor or a resolution of the municipal council or the local assembly. On the other hand, the law provides for a discount on the fee in the case of a one-time payment for land owned by the Treasury, at a rate of 10% to 60% depending on when the fee is paid – 60% in the first year, 10% less in each subsequent year.

The procedure is new, and already at the stage of analyzing the bill, many doubts and questions arose, particularly in the determination of one-time fees that take into account the discount. For this reason, we encourage you to work with our law firm to carry out a smooth transformation of the right of perpetual usufruct of land.

Legal Advisor Malgorzata Rynkiewicz