Buying an apartment from a developer and the tax office - legal basics

Transactions on the primary market are governed by the Civil Code, the Act on Ownership of Premises and the Developer Act of 16 September 2011. Under these regulations, the developer is required to maintain an escrow account and provide the buyer with an information prospectus, while the transfer of ownership itself takes place in the form of a notarial deed.

It is important to distinguish between the different stages of the transaction. Signing a development agreement does not yet transfer ownership of the apartment to the buyer. Only the notarial deed transferring ownership makes the buyer the legal owner of the property. The notary is responsible for forwarding the relevant information to the appropriate authorities, including the tax office and the land and mortgage register court.

Detailed information on where to report the purchase of an apartment in order to complete all legal formalities can help you avoid unnecessary doubts at every stage of the process.

Do you need to report the purchase of an apartment from a developer to the tax office?

A standard purchase of an apartment from a developer does not require the buyer to report the transaction to the tax office independently. A transaction on the primary market is subject to VAT, which the developer includes in the price of the property. The buyer therefore pays the gross amount, while the obligation to account for VAT rests with the seller.

Because the transaction is subject to VAT, it is not simultaneously subject to the tax on civil law transactions, known in Poland as PCC. This means that the buyer does not submit a PCC-3 declaration to the tax office. This is an important difference compared with buying property on the secondary market, where the obligation to pay PCC at 2% of the property value and submit the relevant declaration rests directly with the buyer.

A standard transaction with a developer usually follows these steps.

1. The buyer signs a development agreement and makes payments according to the agreed schedule.
2. Once construction is completed, the parties sign a notarial deed transferring ownership.
3. The notary forwards the relevant information to the land and mortgage register court and the tax office.
4. The buyer does not submit a separate tax declaration relating to PCC.

When is it necessary to report the purchase of an apartment from a developer to the tax office?

There are situations in which the buyer may be required to submit additional documents or declarations. This primarily applies to mixed transactions, where one part of the transaction is subject to VAT and another part is subject to PCC. One example is the purchase of an apartment combined with the acquisition of a share in land under separate legal arrangements.

Another special case is the purchase of a garage or parking space that has the status of a separate property and may be taxed under different rules than the residential unit itself. In such a case, it may be necessary to account for PCC on that specific part of the transaction and submit a PCC-3 form.

It is also worth remembering that reporting the purchase of an apartment from a developer to the tax office may become relevant indirectly when the property is later sold. If you decide to sell the apartment within five years of acquiring it, personal income tax obligations may arise, including the need to file a PIT-39 tax return.

What happens if you do not report the purchase to the tax office?

The buyer does not face consequences for failing to submit a declaration that is not required by law. In a standard primary-market transaction, the notary fulfils the reporting obligation, while the developer is responsible for accounting for VAT.

The actual financial risk arises elsewhere, outside the tax office. The new owner has 14 days to submit an IN-1 property information form to the municipal or city office. A delay does not invalidate the transaction, but the authority may assess the property tax retrospectively and charge interest for the period of delay.

When does the buyer pay PCC?

The transfer of ownership of real estate requires a notarial deed, which means that in such transactions the notary acts as the remitter of the tax on civil law transactions. On the secondary market, the notary collects 2% of the property value when the deed is signed and transfers the amount to the tax office. The buyer does not submit the PCC-3 declaration themselves, although they ultimately bear the cost of the tax.

The PCC-3 form is submitted independently for transactions concluded outside a notary’s office, such as a loan agreement, rather than when purchasing an apartment.

The role of the notary and entry in the land and mortgage register

The notary plays a central role in the entire process. They draw up the notarial deed, submit an application to enter the new owner in the land and mortgage register and forward information about the transaction to the relevant authorities. As a result, the buyer does not need to initiate contact with the tax office independently in relation to a standard primary-market purchase. Developers such as J.W. Construction guide buyers through this stage, indicating which documents are required for the notarial deed and ensuring that subsequent formalities are completed on time.

After signing the notarial deed, it is worth making sure that the entry in the land and mortgage register has actually been made. The new ownership status should be disclosed without unnecessary delay, as this may be important in the event of third-party claims and for future tax settlements related to the sale or rental of the property.

A complete list of obligations worth checking after the transaction has been finalized can be found in the guide on formalities after buying an apartment.

What should you check in the agreement before signing?

Tax-related doubts often arise from provisions that can easily be overlooked in the development agreement and information prospectus. Before signing, check three key points:

• the legal status of the parking space and storage unit, including whether they constitute a share in the common property or a separate property,
• the VAT rate applicable to the entire transaction, as the reduced rate applies to apartments of up to 150 m² and houses of up to 300 m², while any excess floor area is subject to the standard rate,
• the legal status of the land, whether it is owned outright or held under perpetual usufruct, as this determines the annual fee payable after the purchase.

Taxes and local charges after buying an apartment from a developer

Apart from PCC and VAT, the new property owner should also remember about obligations arising from local regulations. After acquiring the apartment, the purchase must be reported to the municipal or city office so that property tax can be assessed. The tax obligation arises on the first day of the month following the month in which ownership was acquired.

If the apartment is located on land held under perpetual usufruct, the buyer also assumes the obligation to pay the annual perpetual usufruct fee. The rules for determining and updating this fee are governed by separate regulations. The fee itself is not connected with the tax office, but with the relevant local government authority or the State Treasury.

The most important tax obligations associated with buying an apartment from a developer include:

• VAT included in the purchase price and accounted for by the developer.
• No requirement to submit a PCC-3 declaration in a standard transaction.
• Reporting the acquisition of the property to the municipal office for property tax purposes.
• A possible perpetual usufruct fee, if applicable to the property.
• The obligation to submit a PIT-39 tax return if the property is sold within five years of acquisition.

FAQ - frequently asked questions

Do you need to report the purchase of an apartment from a developer to the tax office?

A standard purchase of an apartment from a developer does not require the buyer to report the transaction to the tax office independently. The transaction is subject to VAT, while the tax formalities are handled by the notary and the developer.

What should you do after buying an apartment from a developer?

After signing the notarial deed, you should make sure that the notary has submitted an application for an entry in the land and mortgage register. You should then report the acquisition of the property to the municipal or city office so that property tax can be assessed.

Do you have to pay tax when buying an apartment from a developer?

The buyer does not pay PCC. VAT is included in the property price and is accounted for by the developer. The buyer only bears the costs of the notarial deed and the court fee for the entry in the land and mortgage register.

When do you need to report the purchase of an apartment to the tax office?

A direct reporting obligation for the buyer may arise when purchasing property on the secondary market if the transaction is subject to PCC. On the primary market, such an obligation may arise only in exceptional cases, for example when purchasing a garage that constitutes a separate property or in transactions with a mixed legal structure.