Reform of perpetual usufruct – the Act with the President's signature

President of the Republic of Poland Andrzej Duda signed into law the Act of May 26, 2023 amending the Act on Municipal Self-Government, the Act on Social Forms of Housing Development, the Act on Real Estate Management, the Act on Tax on Civil Law Activities and certain other acts.

The law provides for a change in the rules for determining the price of land real estate that is sold to a perpetual usufructuary by applying market mechanisms in determining the price of acquiring ownership rights to land that is owned by the State Treasury and local governments - the price of real estate acquired by the perpetual usufructuary in an agreement will be determined as at least 20 times the existing annual fee for perpetual usufruct.

The perpetual usufructuary will be able to make a demand for the conclusion of an agreement for the acquisition of ownership rights within a year from the date of entry into force of the law, and excluded from the claim will be, among other things, land that is undeveloped or used for running allotment gardens.

The PINK Association has been appealing to the Ministry of Development and Technology for two years to convert perpetual usufruct into ownership by, among other things, submitting comments to the bill. However, we received information that due to the requirements of the European Commission, such a transformation as for residential housing is not possible. Already at the final stage of the Sejm's work, PINK appealed to MPs, speaking at a meeting of the combined Committee on Infrastructure and the Committee on Local Self-Government and Regional Policy, to extend the deadline for using the claim to acquire ownership of real estate, so that entrepreneurs would have the opportunity to realistically benefit from de minimis aid. The Senate, in the course of its work on the law, acceded to PINK's position expressed in a letter to senators and at a meeting of the combined Senate Committees on Local Government and State Administration and the Committee on Infrastructure, and introduced an amendment to the law providing for the extension of the deadline for exercising the right to demand the sale of real estate given in perpetual usufruct to a period of 36 months from the entry into force of the law. A similar letter was sent to the Sejm,, however, the Sejm, which finally considered the law, rejected all the amendments proposed by the Senate.

The Act will enter into force in principle on August 31, 2023.

The text of the Act is available here.

Biuletyn PINK vol. 3 | wrzesień 2023