Legal Constraints of Property Flipping in Poland and Selling Furnished Apartments

⏱ Estimated Reading Time: 3 minutes

Legal Restrictions in Property Flipping

1. Transaction Frequency
   Frequent real estate transactions by an individual may be reclassified by tax authorities as business activity, requiring business registration and associated taxation.

2. Foreign Nationals
   Citizens of EU member states may freely acquire real estate in Poland.
   Non-EU citizens must obtain permission from the Ministry of Interior to purchase property with land. No such permission is required for apartments in multi-unit buildings.

3. Transaction Structure
   All elements of the transaction, including furnishings and appliances, must be documented and legally accounted for to avoid tax penalties.

Selling Furniture as Part of the Property Sale
Furniture and appliances are considered movable property under Polish law. Their sale must be structured separately from the sale of the apartment.

Benefits of Separating Furniture in the Contract

• Reduces the total amount subject to VAT.

• Allows for favorable tax treatment.

• Simplifies bookkeeping and legal compliance for sp. z o.o. structures.

Correct Legal Handling of Furniture Sale

• A separate sales agreement must be prepared, listing all items and their individual market values.

• The price of the furnishings must reflect their fair market value to ensure compliance.

• The total transaction value (property + furnishings) must be properly declared.

Tax Risk and Audit Compliance
The Polish Tax Authority actively monitors real estate transactions and evaluates them for potential tax avoidance. Failure to separate furniture sale from real estate can result in reassessment and financial penalties.

Conclusion
Structuring the sale of furnished property with clearly separated contracts for real estate and movables is a lawful and effective strategy for managing tax exposure. All transactions must be documented precisely and in full compliance with Polish legal standards.