How to buy a hotel in Poland

Three structures, three different transactions

An asset deal transfers the land and buildings. Contracts, licences, bookings and staff stay with the seller unless separately agreed, which means the buyer starts with a clean balance sheet and an empty booking calendar.

A share deal transfers a company, and with it everything the company owns and owes — including liabilities that surface later. It preserves continuity but demands far deeper due diligence.

The third option is the sale of an organised part of an enterprise — a functionally, financially and organisationally distinct set of assets capable of operating independently. It is Poland's version of the transfer of a going concern and, like TOGC elsewhere in the EU, it falls outside the scope of VAT. That does not make it tax-free: transfer tax applies instead, converting a recoverable 23% into an unrecoverable 2%. Whether a given set of assets qualifies is one of the most frequently litigated questions in Polish tax, and getting it wrong means either lost input VAT or arrears with interest.

VAT or transfer tax — never both

A property sale is either subject to VAT or, where it is exempt or falls outside the VAT system, to transfer tax — PCC, the tax on civil-law transactions. The two never apply together. Transfer tax runs at 2% on real estate and perpetual usufruct and 1% on shares in a limited liability company; on a four-million-euro hotel that is eighty thousand euros, and it is not recoverable.

What decides it: the VAT status of both parties, the date of first occupation of the building, the history of improvements and whether the subject of the sale is real estate or a going concern. One qualification matters more than any other. Where a building is sold more than two years after first occupation the supply is exempt by default, but two VAT-registered parties may jointly elect to tax it, declaring the election in the notarial deed. For a buyer who can recover VAT that election is usually worth having, because the transfer tax it displaces is a pure cost. It has to be decided before signing, not after.

Where the position is genuinely unclear, parties apply to the tax authorities for an individual ruling. It takes about three months and protects only the applicant, on the facts as described — but that is protection no adviser's opinion can match.

For a buyer registered for VAT, the difference is material: VAT is generally recoverable, transfer tax is not. Establish the classification before the price is agreed, not the week before completion.

Perpetual usufruct: your building, someone else's land

A substantial number of Polish commercial properties sit on land held under perpetual usufruct — a right to use land owned by the State Treasury or a municipality, granted for a fixed term, with the buildings owned separately by the holder.

Three things matter to a buyer. The annual fee, which is periodically revalued in line with land values and can rise sharply. The remaining term, because banks will not lend on a term that outruns it and a short residual term depresses value disproportionately. And the designated purpose recorded in the original grant, since using the land for something else creates risk and a change of use may require consent.

Two points are routinely missed. Perpetual usufruct is increasingly convertible: since 2023 holders of commercially used land have had a statutory route to acquire the freehold, and purchase from the municipality or the State Treasury on general terms remains available. A hotel sitting on perpetual usufruct is often a hotel that can be sitting on freehold within a year — a value-creation lever rather than a permanent defect. The term can also be extended on application in its final five years, and the grantor may refuse only for compelling reasons of public interest.

One procedural trap: transfer of perpetual usufruct takes effect only on entry in the land register. Unlike a transfer of ownership, the notarial deed alone does not move it.

Employees transfer automatically

Where a business, or part of a business, transfers to a new employer, that employer becomes party to the existing employment relationships by operation of law. No consent is required from anyone. Liability for what came before, however, depends on what transfers: where only part of an establishment passes, the outgoing and incoming employer are jointly and severally liable for earlier obligations; where the whole establishment passes — the usual case in a hotel sale — the incoming employer assumes them alone. That is precisely why buyers negotiate an express indemnity rather than relying on the statute.

The seller must inform employees in writing and, where no trade unions operate, must do so at least thirty days before the transfer. Employees may then terminate the relationship within two months of the transfer, on seven days' notice of their own, with consequences for both sides close to termination by the employer. Plan the completion date backwards from these deadlines — this is one of the few elements of a Polish transaction that cannot be accelerated by paying advisers more.

In practice this cuts both ways. Unpaid holiday entitlements and disputed overtime become the buyer's problem; an experienced team that stays is an asset that no amount of capital can recreate quickly, particularly in small tourist towns.

Land, access and utilities

Polish tourist properties frequently expanded over decades on the basis of neighbourly agreement rather than registered rights. A driveway crossing an adjacent plot, a water pipe running through someone else's land, a jetty or terrace sitting a few metres beyond the boundary — none of this troubles anyone until the property is sold.

A buyer sees it differently, and so does a bank: an unregistered right of way may not survive the neighbour selling, because a purchaser acting in good faith is protected by the land register. Granting an easement by notarial deed and registering it is straightforward while relations are good and impossible under time pressure, which is why it belongs at the start of a process.

What a realistic timetable looks like

With clean title, complete documentation and a cash buyer, due diligence takes roughly three to eight weeks depending on the size of the property, followed by two to six weeks for the contract and the notarial deed. Bank financing adds a credit process measured in months.

The variable that ruins timetables is not the lawyers' speed but missing paperwork: as-built documentation for an extension carried out fifteen years ago, an unresolved boundary, an unfinished inheritance among co-owners. Ask for the full document list at the first meeting — what the seller cannot produce quickly tells you more than what they can.