Real Estate Investment: Poland vs. Neighboring Countries – Comparative Analysis

Published on September 29, 2025 and written by Cyril Jarnias

Investing in Central and Eastern European Real Estate

Interest in Central and Eastern European real estate investment continues to grow, with Poland, as the region’s economic engine, attracting significant attention from foreign investors. Yet this promising market faces competition from equally attractive neighboring countries with their own advantages:

• The Czech Republic, with its urban dynamism,
• Slovakia and its attractive tax framework,
• Hungary and its competitive costs.

This article provides a detailed comparison to better understand the advantages and challenges of investing in Poland versus its neighboring countries, helping you make an informed decision for your next real estate investment.

Poland’s Real Estate Market Situation

The recent evolution of Poland’s real estate market is characterized by continuous but moderate price growth, sustained demand, and increasing public policy interventions aimed at improving affordability. Major cities like Warsaw, Krakow, and Gdańsk particularly illustrate these dynamics.

City	Average Resale Price Q1 2025 (PLN/m²)	Annual Change (%)	New Build Price Q1 2025 (PLN/m²)	Annual Change (%)
Warsaw	16,459 (~$4,250)	+8.1	16,383 (~$4,233)	+3.1
Krakow	15,099 (~$3,900)	+10.6	15,686 (~$4,053)	+6.6
Wrocław	12,675 (~$3,275)	+9.3	14,257 (~$3,684)	+11.1
Poznań	10,831 (~$2,800)	+6.1	12,328 (~$3,185)	+5.3
Gdańsk	12,279 (~$3,170)	+0.3	13,240 (~$3,420)	+6.9

Key Observed Trends:

• Annual price growth remains positive but shows notable slowdown in some metropolitan areas.
• More pronounced increase for older housing in some cities (Krakow: +10.6%) than for new builds.
• Affordable apartments are disappearing quickly from the market.

Housing Supply and Demand

• Demand continues to outpace supply despite a sales slowdown since mid-2024.
• There remains a shortage of approximately 1.5 million apartments to fully meet national demand; this structural deficit maintains price pressure.
• Transaction activity is hampered by bank caution and a recent slight increase in fixed mortgage rates.

Recent Government Policies

• “First Keys” program targeting first-time buyers in the resale market to avoid overheating in new construction.
• Expected monetary easing (anticipated decrease of ~100 basis points by end of 2025), likely to gradually improve mortgage credit accessibility for low to middle-income households.

Mortgage Interest Rates & Financial Accessibility

• After several months of decline starting late last year until last spring/summer:
  • Fixed rates stopped decreasing since June/July;
  • Credit access remains more difficult than before the energy/inflation crisis;
• Slight overall improvement expected if announced monetary cuts materialize by year-end;
• Real estate purchasing power has slightly recovered from historically low levels reached between mid-2022 and mid-2024 thanks to this relative easing.

Regional Comparison

Country	Annual Price Increase (%)	Housing Deficit?
Poland	+7 to +11 depending on city	Yes (>1M units)
Czech Republic	>8	Yes (smaller than PL)
Slovakia	Comparison of real estate investment strategies

Comparison of Real Estate Investment Strategies

Comparing real estate investment strategies in Poland, Germany, Czech Republic, Slovakia, and Lithuania reveals varied approaches, largely influenced by tax laws, property ownership regulations, rental market dynamics, and financing accessibility.

Country	Taxation & Property Law	Financing	Rental Market	Recent Trends
Poland	Moderate taxation, open market	Decent credit access	Rental growth	Strong price increases, foreign capital relocation, euro anticipation
Germany	Heavy taxation for non-residents, strong tenant protection	Easy financing, low rates	Stable rental demand, but strict rent controls	Price increases in major cities, increased regulation
Czech Republic	Advantageous taxation, transparency	Banks finance up to 90% of price, attractive conditions	Rapidly growing rental market, preference for long-term	Prague highly sought after, attractive rental yields
Slovakia	Stable taxation, open market	Financing access for residents and non-residents	Growing rental market, but less dynamic than Prague	Gradual price increases, economic stability
Lithuania	Low taxation, easy access for non-residents	Accessible financing	Gross rental yield ~4.5%	Rising prices and rents, strong foreign demand

Factors Influencing Strategies:

Taxation and Regulation:

• Germany applies heavy taxation for non-residents and strongly protects tenants, limiting short-term speculative strategies.
• The Czech Republic offers advantageous tax conditions, high transparency, and the possibility for banks to finance up to 90% of purchase value, attracting many foreign investors.
• Poland remains fiscally attractive, particularly for European investors, with the prospect of euro adoption that could facilitate capital transfers and stabilize profitability.

Rental Market:

• In the Czech Republic, rental demand is exploding, especially in Prague, where long-term rental strategy dominates.
• In Poland, rapid price increases have reduced gross yields, but demand remains strong, particularly due to corporate relocations and foreign capital investments.
• Lithuania and Slovakia also see rising rental demand, but with price and profitability levels lower than Prague or Warsaw.

Financing Accessibility:

• Czech banks stand out for their openness to foreign investors, willing to finance up to 90% of the price, favoring financial leverage.
• In Germany, rates are low, but regulatory requirements and capital gains taxation can deter certain investor profiles.

Short-term and Long-term Strategies:

Short-term:

• Quick resale arbitrage is more limited in Germany (taxation and regulation) but remains feasible in Poland and Czech Republic where price increases are rapid.
• Seasonal rentals and co-living are popular in Prague and Warsaw but face increased regulation in Germany.

Long-term:

• Residential rental investment in Prague and Warsaw, anticipating capital gains upon Poland’s euro integration.
• In Germany, wealth preservation strategy (long-term holding) is preferred, secured by market stability and tenant protection.

Concrete Examples:

Successes:

• In Prague, investors who acquired apartments five years ago saw their value increase by over 25%, while benefiting from rising rents and favorable leveraged financing.
• In Poland, 27.6% price growth in Warsaw between 2018 and 2019 allowed some investors to double their investment within a few years.

Failures:

• In Germany, some foreign investors saw their net profitability drop due to increased property taxes and restrictive rent regulations, reducing interest in short-term strategies.

Recent Market Trends:

• Widespread real estate price increases across the region, particularly marked in Poland and Czech Republic.
• Increased rental demand, especially in major university cities and capitals.
• Anticipation of monetary normalization (Poland’s euro integration), likely to support long-term valuation.
• Increased regulation of short-term rentals in Germany and some major Central European cities.

Key Takeaways:

Investors can optimize their strategy by leveraging differences in taxation, rental market dynamism, and credit accessibility. The Czech Republic and Poland currently offer the best return prospects, particularly for investors willing to commit medium or long-term, while Germany remains better suited for a secure, wealth preservation strategy.

Tax Analysis: Poland vs Neighboring Countries

Country	Tax Rate on Rental Income	Property Taxes (2025)	Specific Tax Incentives/Deductions
Poland	8.5% (micro-entrepreneur, up to 100,000 PLN/year), 12-32% (standard income tax bracket)	Tax calculated based on surface area or property depreciation value. New 2025 criteria for technical structures; no generalized cadastral tax.	Possible deductions for loan interest, maintenance costs, depreciation in micro-enterprise. Possible exemption after 5 years of ownership (capital gains) in certain cases.
Germany	14 to 45% (progressive, based on total income amount)	Property tax based on cadastral value (Grundsteuer), varies by municipality.	Broad deduction of interest, expenses, depreciation. Numerous incentives for energy renovation.
Czech Republic	15% (rental income up to 1.7 million CZK), 23% above	Low property tax, calculated on surface area and location.	Deductions on loan interest, expenses, depreciation. Capital gains exemption after 5 years of ownership.
Slovakia	19% (income Real estate purchase specifics in Poland

Real Estate Purchase Specifics in Poland

Real estate purchase in Poland involves strict procedures, governed by local legislation and requiring several official documents. The transaction mandatorily requires a notarial deed to be valid, ensuring legal security for both buyer and seller.

Legal Acquisition Procedure and Required Documents:

• Signing of a preliminary sale agreement (umowa przedwstępna) then an authentic deed before a notary.
• Possible obtaining of a permit from the Ministry of Interior for non-EU foreign nationals.
• Seller documents:
  • Land register extract
  • Previous title deed
  • Certificate of no debts on charges (condominium or cooperative)
  • Certificate that no one is registered at the address (town hall)
  • Energy certificate
  • ID card
• Buyer documents:
  • Valid ID card or passport
  • Bank proof if financing through mortgage
• Proof of sufficient financial resources in some cases (bank statements, certificates).

Administrative Steps:

1. Signing at the notary: complete verification of titles and obligations.
2. Filing with local land registry to formalize transfer.
3. Payment of ancillary fees and taxes.

Common Available Property Types:

• Condominium apartments (mieszkanie)
• Single-family or semi-detached houses (dom wolnostojący/blizniak)
• Buildable land

Type	Main Characteristics
Apartment	Most common in city centers; new or old
Single-family house	More frequent in urban peripheries or countryside
Land	Often available around major cities

Regional Differences in Prices & Availability:

Warsaw, Krakow, Wrocław: High prices; strong demand; varied but limited new supply.
Medium-sized cities/provinces: Moderate to low prices; wider choice in single-family homes; less speculative.

Region	Average Price (€ / m²)	Availability
Warsaw	High (>3000€/m²)	Limited supply
Krakow	Medium/High	Strong student demand
Baltic Coast/Southwest	Medium	Tourism/recreation

Ancillary Costs to Expect When Purchasing:

• Real estate transaction tax: generally 2% of price
• Notary fees: between 0.5% and 3% depending on value + applicable VAT
• Land registry registration fees: approx. 200 PLN (~€45)
• Possible real estate agency fees: variable

Numerical Example:

Item	Indicative Amount
Transaction tax	~2 %
Notary	~0.5–3 % (+ VAT)
Land registry	~200 PLN

Comparison with Neighboring Countries and Practical Advice:

In comparison:
Poland:
+ Relatively quick procedure thanks to cadastre computerization
+ Dynamic market with regulatory stability
– Sometimes complex mandatory obtaining for non-EU foreigners
Germany/Czech Republic/Lithuania:
+ Less restrictive for EU/Schengen Area foreigners
+ Sometimes longer process on German side for mortgage/notary obtaining

Practical Advice:

• Systematically check the land registry before any contractual commitment.
• Plan for localized professional assistance – bilingual lawyer/notary office recommended.
• Anticipate non-negligible ancillary costs in your overall budget.

Specific Polish Advantages:
Regulatory stability, constantly growing market, cost still lower than neighboring major capitals despite recent increases.

Specific Disadvantages:
Increased administrative complexity if you don’t have European nationality – possible need for prior ministerial authorization.

To successfully purchase real estate in Poland, it’s essential to be well-prepared administratively, informed about local specifics according to your target region, and accompanied by a professional mastering Polish legal subtleties.