The availability of land for residential development is one of the key factors influencing the growth of the real estate market. The governmental draft of the so-called “Land Supply Act,” which has just entered the legislative process, introduces a number of changes aimed at simplifying investment procedures and increasing the number of available plots.
In this article, you will learn:
What Are the Key Changes Introduced by the Land Supply Act?
Exemption from planning fees – The sale of real estate within the first two years following the entry into force of the Act will be exempt from the planning fee, regardless of the adoption or amendment of the local spatial development plan. The planning fee has so far incentivized passive behavior among landowners in the real estate market.
Transfer of land to municipalities – The state will transfer land suitable for residential development to local governments, which may increase the availability of social housing and investments within the framework of the Social Housing Initiative.
New rules for perpetual usufruct – The legislator intends to lift the general prohibition on establishing perpetual usufruct rights for residential purposes. This will allow public landowners to grant a stable legal title to entities implementing residential projects while maintaining effective oversight of compliance with spatial policy objectives. Additionally, the Act simplifies land purchase procedures and introduces preferential rates for residential investments (with the initial perpetual usufruct fee not exceeding 15% of the land’s value).
Lifting restrictions on the sale of agricultural land located within city boundaries and removing the repurchase right of the National Support Centre for Agriculture (KOWR) – This change will facilitate investor access to land for residential development, thereby accelerating urbanization and supporting housing policy implementation. Currently, the Agricultural System Act imposes strict limitations on the transfer of agricultural plots, including the requirement that buyers of plots larger than 0.3 ha must hold the status of a farmer. The proposed amendments would exempt land with residential potential from such restrictions.
Simplification of requirements under the Special Housing Act – The proposed amendments would grant local governments greater autonomy in determining the minimum parking space ratio and facilitate the subdivision of land covered by a resolution on the location of a residential investment, regardless of the provisions of the local development plan. The changes would also eliminate the requirement to maintain a minimum 5% share of commercial and service space in residential buildings.
Clarification of appeal and complaint requirements under the Construction Law – To enhance the efficiency of administrative procedures in the construction sector, new formal requirements for legal remedies submitted under the Construction Law will be introduced. Appeals or complaints will need to include specific allegations, the scope of the claim, and supporting evidence. Otherwise, the authority will request the deficiencies be rectified, and failure to comply will result in the filing being left unexamined. This significant change will require participants to formulate their positions precisely, while also reducing the number of vague or obstructionist appeals that delay investments.
What Do the New Regulations Mean for Investors, Local Governments, and the Real Estate Market?
For investors – The changes will increase the attractiveness of residential investments under the still-effective Special Housing Act and unlock access to attractive land currently designated as agricultural within city limits. However, developers generally seek land that is already prepared for residential use, including proper infrastructure. Agricultural plots on city outskirts often lack such infrastructure, which may pose additional challenges.
For local governments – The proposed amendments provide new tools for housing policy implementation and more effective land management. Reintroducing the possibility of establishing perpetual usufruct for residential purposes will primarily benefit local governments. While the initial acquisition costs for investors will be lower, annual fees and future conversion into ownership rights may deter some developers in the long term.
For the real estate market – The proposed regulations may lead to an increase in the number of new developments and help stabilize housing prices, albeit likely in the longer term. In the broader perspective, the Act could enable developers to launch new projects more effectively and respond to market needs, with the added benefit of time savings during the planning and permitting phases.
However, the key question remains: will this be enough to address the current housing shortage and unlock land supply?
It is undoubtedly a step in the right direction, but effective implementation of the new regulations and cooperation between public authorities and the private sector will be crucial.
Author: Marek Generowicz , Attorney-at-Law
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