In July 2023 this year an act was passed amending the Act on Spatial Planning and Development and certain other acts, the aim of which is to increase the efficiency and transparency of urban planning processes. The new regulations enter into force in stages, starting in September 2023, and will be fully implemented by 2026. These changes may significantly impact the real estate market, which makes selling land before they come into force a beneficial move.
- The most important changes concern the inclusion of general plans instead of studies in local spatial development plans.
- The current study of conditions and directions of spatial development of the commune will be replaced by a general plan, which will be an act of local law. Municipalities have until the end of 2025 to prepare these plans.
- The general plan will be the basis for adopting local plans and issuing decisions on development conditions. The investor will probably have to wait 4-5 years for the local plan.
- Huge changes in regulations regarding development complementation areas. Decisions on development conditions will be issued only for designated (limited) development development areas. This is aimed at better spatial planning and protection of areas with special natural or landscape values.
- The new regulations will enter into force in stages, starting in September 2023, and will be fully implemented by 2026. These changes may significantly impact the real estate market, which makes selling land before they come into force a beneficial move.
The introduction of new regulations on spatial planning in Poland aims to improve the efficiency and transparency of urban processes. However, these changes may also introduce certain risks and uncertainties in the real estate market.
Selling land before the new regulations come into force may be a strategically advantageous move that will allow you to avoid potential problems and take advantage of current, more predictable market conditions. For landowners, this may mean the opportunity to obtain a better price and complete the transaction faster.
What will change or has already changed in the regulations on spatial planning and development?
The most important changes concern the inclusion of general plans instead of studies in local spatial development plans.
The current study of conditions and directions of spatial development of the commune will be replaced by a general plan, which will be an act of local law. Municipalities have until the end of 2025 to prepare these plans.
The general plan will be the basis for adopting local plans and issuing decisions on development conditions. ANDthe investor will probably have to wait 4-5 years for the local plan. Offices will also not be willing to issue decisions on development conditions before local plans are adopted and may prolong this process.
Integrated investment plans are introduced. A new tool that aims to facilitate the implementation of large investment projects. Such a plan, developed at the investor’s request and after being adopted by the commune council, allows for the repeal of the relevant part of the local plan, accelerating the implementation of the investment. The key element is the urban planning agreement defining the investor’s obligations towards the commune.
There will also be a free urban planning register. The act provides for the creation of a free urban planning register, available online, which will serve as a central source of information and planning data. The introduction of the register is planned for 2026.
Simplified social participation. The changes introduce simplifications in the scope of public consultations. Comments will be able to be submitted electronically, and local governments will have to organize consultations in a way that is accessible and convenient for residents.
Huge changes in regulations regarding development complementation areas. Decisions on development conditions will be issued only for designated (limited) development development areas. This is aimed at better spatial planning and protection of areas with special natural or landscape values.
This means that there will be few such areas in the MPZP because local plans will be in force, which will regulate the allocation of specific lands in the MPZP once and for all. If the land is intended for agricultural production, it will not be very difficult to change the land for, for example, the construction of a warehouse.
Strategic investments. The Council of Ministers will be able to request the voivode to issue an order regarding a local plan for investments of particular importance for the protection of the basic interests of state security or the national economy.
So why should you consider selling the land before the end of 2025?
The indefinite development conditions will expire. Currently issued decisions on development conditions are valid for an indefinite period, which means that investors do not have to worry about their expiration.
After December 31, 2025, the new development conditions will be valid only for 5 years. For potential land buyers, certainty as to the development possibilities is crucial, so they may want to make a purchase before new regulations come into force and temporarily limit development conditions.
The biggest change is the limitation of development areas. The new regulations introduce the concept of development complementation areas, which will be the only places where it will be possible to obtain a decision on development conditions. Based on the decision on development conditions, the intended use of land for specific investments is determined.
Therefore, if an investor submits an application for a decision on development conditions, e.g. for the construction of a warehouse, and the zoning plan did not specify the intended use of the land, municipal offices usually agreed and issued a decision on development conditions, e.g. for the construction of a warehouse.
After December 31, 2025, if the plot of land you own is not located in such an area, its value may decrease significantly due to limited development possibilities – e.g. it will not be possible to use it for construction investments. Therefore, selling land before December 31, 2025 may (does not have to) be more profitable before the new regulations come into force. It all depends on what land use is specified in the general plans.
Theoretically, if in the general plans after December 31, 2025, your land is designated, for example, only for the construction of houses and other purposes, paradoxically, their value may increase significantly.
Increase in prices of urban planning services. Due to the need to prepare new master plans by the end of 2025, the demand for urban planning services will increase dramatically. This, in turn, will increase the prices of these services. Investors may want to purchase land now to avoid additional costs associated with future urban plans.
Investment uncertainty. The introduction of new regulations is always associated with a transition period during which investors may feel uncertainty about future regulations.
This uncertainty may influence investment decisions, leading to a decline in demand for land. Especially in the case of foreign investors for whom time and legal transparency are important. Selling before the entry into force of new regulations can protect owners against a potential drop in property value caused by market uncertainty, says Mateusz Ludwig, Property Development Manager at Satoia.
Changes in planning procedures. The new regulations introduce numerous changes to planning procedures, including the introduction of integrated investment plans and an urban register.
While they aim to increase transparency and efficiency, the process of implementing them can be complex and time-consuming. Investors may prefer to purchase land now to avoid potential complications related to new procedures, says Mateusz Ludwig, Property Development Manager at Satoia.
What are the benefits of the current regulations in spatial planning and development regulations? The current regulations on spatial planning, despite their flaws, are known and predictable for investors.
The new regulations will introduce a number of changes that may affect the way investments are planned and implemented. Selling land now allows investors to use the current regulations they are familiar with, which may be more attractive to them than adapting to new regulations – says Mateusz Ludwig, Property Development Manager at Satoia.
What is the current land sale procedure?
Selling land for investment development is a process that requires completing many formalities. You need to prepare appropriate documents, obtain consents and permits, and carry out administrative procedures.
Taking on this task on your own may be complicated, so it is worth considering cooperation with companies specializing in this type of transactions.
It is necessary to collect all documents confirming ownership rights and check whether the plot is not encumbered with any liabilities.
Additionally, depending on the location and planned purpose of the plot, appropriate consents from local authorities may be required. The sales process also involves the need to complete many formalities, including notifications to relevant offices and registers. Mateusz Ludwig, Property Development Manager at Satoia.
