Country Guides Country Guide: Poland

Date Published:

30/05/2008

Bordered by the Baltic Sea, Germany, Czech Republic, Slovakia, Ukraine, Belarus, Lithuania and Russia, Poland is a vast and varied country. Not usually thought of as a beach destination, the Baltic Sea has a number of resorts such as those at Sopot and the Hel Peninsula. Central Poland is where its major cities of Warsaw and Krakow are located, while in the south the Tatra Mountains provide good skiing facilities.

By Gordon Miller

Poland is a newcomer to the overseas property market. One of 10 nations that joined the EU on 1 May 2004, prior to its accession foreigners were not permitted to buy in the country - not that many of us would have considered it anyway. Mainly an agricultural nation, but with a strong shipbuilding tradition and mining heritage, Poland has often been considered one of the 'grey men' of the former Eastern Bloc. Putting presumptions to one side, however, the country has plenty to offer the investor and second homebuyer.

Firstly, Poland's economy is rapidly transforming, posting an impressive year on year GDP growth of 5.8% last year (the EU25 mean was +1.5%) and property prices rose by an average of 10% and by as much as 20% in certain areas, such as Gdansk, situated on the North Sea coast. Made famous by the Solidarity shipbuilder strikes in the 1980s, led by the charismatic Lech Walesa, Gdansk is built around a port, with striking several storey high properties, reminiscent of Amsterdam's narrow canalside houses.

A bonus for would-be buyers in Gdansk is Ryanair's opening of a route into the city, which began in 2005. Flight prices from under a fiver, excluding taxes, are commonplace and flying time is less than three hours. Ryanair also flies into Lodz, approximately 75 miles southeast of Warsaw, the capital city, which offers strong investment potential.

'Poland's demographics and social conditions are changing rapidly with the traditional agricultural economy giving way to technology and the service sector,' says Nick Dare managing director of Dare Property. 'The number of Polish professionals moving to Warsaw is expected to double over the next 10-15 years, providing great investment opportunities as many new homes are being built to cater for the increased demand.'

Much of the construction cost will be funded by the EU - from 2006 Poland receives around $13.5 billion to spend on infrastructure and as development and agricultural subsidy - but private investors, including foreigners are being financially encouraged to assist in bringing Poland up to speed with the rest of the EU member states.

'Foreign investor incentives include no local Capital Gains Tax payable if a property is held for five years or more,' says Dare. 'And the announcement that VAT on property is expected to increase from its current 7% to 22% in January 2008 will in all likelihood cause a rush of completions prior to this date, thus boosting the economy in the short-term to the benefit of early investors.'