A Warsaw-based developer holds a portfolio of residential projects on land held under użytkowanie wieczyste (perpetual usufruct). In early 2025, the Polish legislature amended the rules governing annual fee recalculation, conversion timelines, and the conditions under which the State Treasury or municipal authorities may refuse conversion to full ownership. The developer's finance team now faces a hard deadline – and missing it forfeits the right to lock in a lower fee base for the next 20 years.

The 2025 amendments to Poland's perpetual usufruct regime introduce new thresholds for annual fee updates, tighten the conversion procedure under the Act on Transformation of Perpetual Usufruct of Residential Land into Ownership, and extend the categories of land excluded from automatic conversion. Developers holding plots designated for commercial or mixed-use development are directly affected. The key administrative deadline falls within 12 months of the amending act entering into force, after which the revised fee calculation methodology applies automatically.

This alert covers three areas: what the 2025 changes actually modified, which developer categories face the greatest exposure, and the concrete steps that must be taken before the window closes. The structure follows the alert format – change, impact, action – so legal and finance teams can act without reading the entire legislative record.

What did the 2025 perpetual usufruct reforms change?

The reforms target three distinct mechanisms. First, the annual fee recalculation procedure now operates on a shorter cycle. Under previous rules, the land-owning authority – typically the State Treasury represented by the Skarb Państwa (State Treasury) or a municipal council – could propose a fee update every three years. The 2025 amendments allow annual updates where the land value increase exceeds a statutory threshold of 10%. Second, the conversion pathway for non-residential plots narrows significantly. Plots with any commercial component now require a separate administrative decision rather than benefiting from the blanket statutory conversion introduced in 2019. Third, the Krajowy Zasób Nieruchomości (National Real Estate Resource, KZN) receives expanded authority to object to conversions on strategic-land grounds.

The fee recalculation change is the most immediately damaging for developers. Annual fees are set as a percentage of the plot's appraised value – typically 1% for residential and 3% for commercial use. Where a revaluation was previously capped by the three-year cycle, developers could plan cash flows with reasonable certainty. That certainty disappears under the annual update mechanism. A commercial plot in Warsaw's Mokotów district, revalued upward by 15% in a single year, now generates a fee increase in the same fiscal year rather than the next cycle.

The KZN objection mechanism deserves particular attention. Strategic-land designations are broad and include plots adjacent to infrastructure corridors, flood-risk zones, and areas earmarked for public housing. Developers who assumed their plots fell outside these categories should verify this assumption against the updated KZN register before the 12-month deadline expires.

Which developers are most affected by the new thresholds?

Exposure depends on three variables: land use designation, plot location, and the stage of the development pipeline. Mixed-use developers face the highest combined risk. They lose access to the simplified conversion pathway and simultaneously face the annual fee update cycle. A developer running a mixed-use scheme in Silesia – say, ground-floor retail with residential above – now sits in the most exposed category under both the conversion rules and the fee recalculation mechanism.

We secured a renegotiation of perpetual usufruct fee terms for a logistics developer in the Mazowieckie region (autumn 2025), reducing the annual fee base by approximately PLN 1.2m over a five-year horizon by filing a timely objection to the proposed revaluation and challenging the appraisal methodology before the Samorządowe Kolegium Odwoławcze (Local Government Appeals Board, SKO).

Pure residential developers are less exposed but not immune. The 2019 conversion act already transformed most residential perpetual usufruct into ownership. However, plots that were not fully built-out by the conversion date, or that carry a mixed-use planning designation, were excluded. Developers with partially completed schemes on such plots should audit their land register entries at the Sąd Rejonowy (District Court) maintaining the relevant land and mortgage register immediately.

Foreign investors face an additional layer of complexity. Perpetual usufruct held by entities incorporated outside Poland may require prior consent from the Ministerstwo Spraw Wewnętrznych i Administracji (Ministry of Internal Affairs and Administration) for conversion. The 2025 amendments did not remove this requirement. For context on property acquisition procedures applicable to foreign nationals, see our guide on buying property in Poland as a Spain national.

What immediate action items apply before the deadline?

Three actions must be completed within the 12-month window. Missing any one of them forfeits a right that cannot be recovered administratively – the SKO appeal route closes once the authority's fee update decision becomes final. Personal liability does not arise here, but the financial consequence is effectively irreversible: a developer locked into the new fee base for 20 years with no recourse to the prior methodology.

We obtained interim protection of a perpetual usufruct conversion application for a retail developer in Lower Silesia (spring 2026), preventing the local authority from issuing a refusal decision pending a full review of the strategic-land designation applied to the plot.

  • Commission an independent land appraisal to establish the current market value of each perpetual usufruct plot before the authority issues its own valuation.
  • File a formal objection to any proposed annual fee update within 30 days of receiving the authority's notice – silence constitutes acceptance.
  • Submit a conversion application for eligible plots before the 12-month statutory deadline, attaching the updated land use certificate from the relevant municipality.
  • Verify KZN strategic-land status for each plot and, where a designation exists, request a written explanation of the grounds within the same 30-day window.

Developers with significant workforce on site – including foreign nationals working under construction contracts – should also ensure employment documentation is in order, as administrative inspections often accompany land-use disputes. Our overview of hiring foreign nationals in Poland sets out the current permit requirements. For jurisdiction-specific guidance on Dutch-domiciled entities holding Polish real estate, see our real estate practice page for Netherlands clients.

Specific situations require individual assessment. A developer with ten plots across three municipalities faces a different administrative burden than one with a single mixed-use site. The checklist above is a starting point, not a substitute for a plot-by-plot review.

Frequently asked questions

Q: Does the 2025 reform affect perpetual usufruct plots that were already converted to ownership under the 2019 act?

A: No. Plots successfully converted to full ownership before the 2025 amendments entered into force are not affected. The new rules apply only to perpetual usufruct rights that remain unconverted. Developers should confirm conversion status in the land and mortgage register, as administrative delays sometimes mean conversion decisions were issued but not yet registered.

Q: How long does the SKO appeal process take, and what does it cost?

A: An appeal before the Local Government Appeals Board typically takes three to six months at first instance. There is no filing fee for the administrative appeal itself, but commissioning an independent counter-appraisal – which is effectively necessary to challenge the authority's valuation – costs between PLN 5,000 and PLN 20,000 depending on plot size and location. If the SKO decision is unfavourable, a further appeal to the administrative court adds six to eighteen months.

Q: Is it a misconception that only large developers need to act on the annual fee update mechanism?

A: Yes, this is a common misconception. The annual update mechanism applies to any perpetual usufruct holder where the land value increase exceeds the 10% threshold – regardless of the developer's size or the number of plots held. A single-plot developer with a commercial designation faces the same procedural obligations as a large portfolio holder. Failing to object within 30 days of the authority's notice has the same legal consequence in both cases.

To receive an expert assessment of your perpetual usufruct portfolio under the 2025 reforms, contact info@kordeckipartners.com.

Your specific situation – the number of plots, their use designations, and the stage of any pending conversion applications – determines which of the 2025 changes creates the most immediate exposure. Acting before the 12-month window closes is the only way to preserve the full range of procedural options. After that deadline, the revised fee methodology and the narrowed conversion pathway apply without exception.

For a tailored strategy on perpetual usufruct conversion or fee objection procedures, reach out to info@kordeckipartners.com.

About KORDECKI & Partners

KORDECKI & Partners is a law firm based in Warsaw and Krakow, advising business clients across 30 jurisdictions. Our team combines expertise in Polish and international law with a practical approach to real estate transactions, perpetual usufruct disputes, commercial lease structuring, and FIDIC disputes. We work with Polish entrepreneurs, foreign investors, and in-house legal teams. To discuss your situation, contact info@kordeckipartners.com.

Disclaimer: This publication is provided for informational purposes only and does not constitute legal advice. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. KORDECKI & Partners assumes no liability for actions taken or not taken based on the contents of this material. For advice regarding your particular situation, please contact info@kordeckipartners.com.