Poland

Legal and tax aspects of
investing in real estate
choosing such a solution shall be made on
detailed calculation of all the costs related,
including the lease costs.
Tax implications
If a sale and lease-back transaction
is structured as an operational lease,
the buyer / lessor is in most cases the
owner, and will be able to depreciate the
value of the investment at the standard
depreciation rate of 2.5%. Accelerated
depreciation for used buildings can
be considered in some cases. Other
costs related to the maintenance and
exploitation of the building are taxdeductible
for the lessor.
If, under a sale and lease-back contract,
the real estate asset which is the subject
of the contract is sold at a higher price
than its net book value, a taxable capital
gain will occur. Under Polish legislation,
it is not possible to defer the taxation of
such a capital gain in order to use it for
reinvestment.
A sale and lease-back arrangement has an
advantage for the seller / lessee that the
lease payments are fully tax deductible as
costs incurred for the purpose of earning
revenue. By contrast, for the borrower
party to a normal direct financing
arrangement, only the interest payments
made on the loan are tax- deductible.
The repayment of capital is not a taxtriggering
event. Under a direct financing
arrangement secured by a mortgage, the
debtor would still be the owner of the
real estate. As such, the debtor would
be unable to depreciate the value of the
land. Under a lease contract, the lease
payments are partly a compensation for
the use of the land. Therefore, payments
for the use of the land are tax-deductible
for the benefit of the lessee.
Poland. The real state of real estate | 121