The Ministry of Development, Labour, and Technology informed about the commencement of works on a draft amendment, among others, to the Act on real property management. The bill constitutes another stage aimed at eliminating perpetual usufruct in Poland.
Why was it decided to start work on the amendment? According to the justification, the legislator would like to introduce the possibility of transformation of the perpetual usufruct right into ownership right also in a situation when the perpetual usufructuary uses the land for purposes other than residential. This means that also entrepreneurs would be able to benefit from the transformation.
The Ministry of Development points out that the planned changes meet the current expectations of entrepreneurs. “No perspective of reinforcing the right to land for a price acceptable to the perpetual usufructuary discourages entrepreneurs from taking initiative and acting on land let for perpetual usufruct. Therefore, taking into account the government’s policy to support entrepreneurship and innovation, it is important to ensure legal stability for perpetual usufruct holders investing on public land, which could translate into the development of enterprises operating on public land, and globally will affect the growth of the country’s economic potential”. – we read in the published information on the works on the bill.
According to the draft, the perpetual usufruct right is to be transformed by operation of law and in consideration of the payment rules applied within the institution of enfranchisement ex lege. This solution is similar to that applied in the case of transformation of perpetual usufruct of land developed for residential purposes. However, the government plans to introduce rules of payment taking into account the land’s market value and introducing interest on the payment if it is spread in time.
So far the Ministry has not provided much detailed information about the bill. However, despite the lack of specifics, it remains undeniable who will be most satisfied with the draft. The supporters of the changes will be mostly entrepreneurs, who often limit their long-term investments on land left to them for perpetual usufruct, fearing refusal to renew the agreement on land let for the perpetual usufruct and annual increases of annual fees. On the other hand, local governments, for which revenues from annual fees often constitute a significant part of their budgets, will probably be the opponents.
The Ministry of Development states that the bill will be passed by the government in the first quarter of 2022.
The bill began with the adoption of the Act of 20 July 2018 on the transformation of the perpetual usufruct of land developed for residential purposes into ownership of such land (Journal of Laws of 2020, item 2040).
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