What is Perpetual usufruct in Poland?

Perpetual usufruct (right of perpetual usufruct, RPU) is the English-language term often used by Polish lawyers to describe the Polish version of public ground lease. It is usually granted for 99 years, but never shorter than 40 years, and enables leasehold use of publicly owned land, in most cases located in urban areas. Although it does not give freehold rights, buildings located on such land can be owned directly by private parties. There have been legislative proposals to make it possible to convert perpetual usufruct into freehold ownership.

The fees for establishing the perpetual usufruct are based on the price of the real estate, meaning its value (usually based on a real estate appraisal) and a percentage rate depending on the contractual purpose for which it is given. The fee is composed of the following:

• initial fee – from 15% to 25% of the real estate price (may be split into installments); and
• annual fees (excluding the year when the right of perpetual usufruct was established) – depending on the purpose determined in the agreement, from 0.3% to 3% of the real estate price, for residential purposes, the annual fee is 1% of the real estate price.