Several land value capture instruments are used in the country (Table 2.45). Land management for strategic purposes is limited, despite the legacy of public ownership of land. The most common developer obligation is the one charged to landowners upon land subdivision. Through another type of developer obligation, developers compensate the impacts of a new development by building adjacent roads. Municipalities make moderate use of infrastructure levy and very rarely carry out land readjustment projects. Municipalities can charge landowners for land use changes that increase property values in excess, but they rarely do so.

Poland is a unitary republic with a three-tier system of subnational government: 16 regions (Voivodeship), 380 counties at the intermediate level (Powiat) and 2 478 municipalities (OECD/UCLG, 2019, p. 392[1]).

The national government creates the legal framework of land value capture. Municipalities are the main actors responsible for spatial planning (OECD, 2017, p. 169[2]). They may adopt local development plans that are a default basis to get the building permit. Yet, local public officials have almost no discretion in granting planning permits that are theoretically an auxiliary, but in practice the most common way to obtain the building permit. Municipalities must enact specific regulations to implement land value capture instruments such as planning, infrastructure and subdivision-based levies. For other instruments, however, the national framework is sufficient, and the challenges relate to practical aspects of implementation.

For historic reasons, the government owns a large amount of land. They manage the land stock to support investment and development of vacant, abandoned or unused land. Municipalities may keep land stocks for development purposes, such as residential and infrastructure facilities (Real Estate Management Act of 1997). While land banking as such does not exist, public land sales are frequent.

Municipalities have a large stock of vacant land that they manage. The government sells the land at market price to the highest bidder or leases it to generate revenues. If they need to purchase land for a specific public project, they do so in the form of concentrated plots, at market price or through transfers from another public entity.

Public land leasing is quite common, since the government holds a substantial amount of land. Land is leased for the purpose of generating public revenues or to secure the desired use of the plot. All levels of government frequently lease land in form of perpetual usufruct.

The ground rent is calculated as a percentage of the land value. There is no typical lease length. Leaseholders can transfer the lease or sublease the land to a third party.

The perpetual usufruct (użytkowanie wieczyste) is the prevalent form of public land leasing. It consists of a lease of 99 years paid annually. The rate ranges from 0,3% to 3% of the land value, depending on the planned use: for religious, charity, education, research, culture and health care purposes the rate is 0,3%; for agriculture, housing and sport it is 1%; for tourism it is 2% and for other uses it is 3%. Nonetheless, as the instrument is considered to be outdated, public authorities do not use the perpetual usufruct as a tool to enable land value capture.

The challenges to implementation are the lack of an adequate framework to contemporary land management needs, lack of financing for land acquisition, lack of coordination between public entities and insufficient administrative capacities. Public land leasing is less popular than it once was, because it is regarded as an unwelcome legacy of communism. Public entities prefer to sell their land stock to generate immediate revenues, instead of managing it strategically.

Local governments may charge a levy to landowners to compensate the costs of public improvements that benefit them, such as roads, water and sewage infrastructure. Local governments make moderate use of the instrument and collect the revenues.

The levy can be charged when the public development increases the value of the benefited owners’ land. Benefitted owners are those with plots adjacent or serviced by the constructed infrastructure. The levy amounts to a maximum of 50% of land value gains. In each municipality, a resolution of the municipal council will establish the exact percentage.

The fees are collected upon completion of the public improvement, either through a lump sum payment or in installments. No specific group of landowners is exempt from payment by law. Nonetheless, landowners can apply for an exemption through the municipality, showing their reasons for the request. If the municipality decides to grant the request, they must publish an official list of exempted landowners.

An obstacle to a more widespread adoption of the instrument is that affected landowners frequently appeal against the requirement to pay the charge, questioning benefits from public improvements. The resistance from property owners makes the tool unpopular.

The most recurrent type of developer obligation is the one charged to landowners for land subdivisions in areas covered by a legally binding land use plan. Landowners may wish to subdivide their plots to conduct different types of development, build housing or service the area with roads. Land subdivision generates land value gains. Called land subdivision levy, it is paid in cash and set at the maximum of 30% of the land value increment. Local governments frequently adopt this instrument and collect the revenues.

In-kind developer obligations can be imposed on developers to compensate the impacts that new developments have on local infrastructure. There are three national frameworks to determine compensations, according to the type of project or impact. The compensations may include land, public space, infrastructure improvements, public roads construction or reconstruction and social housing. The most important and oldest framework is the one related to road construction or reconstruction, while the other two frameworks are special and have minor application. In all, the overall extent of developer obligations is small, and different than the one of land subdivision levy.

Developers are responsible for the construction or reconstruction of public roads caused by their non-road investment, in order to compensate the impacts on transit network (Public Roads Act of 1985). Formally, public road authorities can impose the obligations, since their adoption is mandatory. However, in practice, obligations are negotiated with developers. Some large cities have a structured procedure for negotiation. In small developments, in which the project knowingly has minor impacts on roads, developers are typically exempted of the obligation.

Municipalities may create rules regarding cash payments in lieu of road construction or reconstruction. In this case, the charge is calculated using a rule that considers development size and type, as well as the costs incurred by the jurisdiction due to the impacts on infrastructure. Cash payments are seldom used.

For residential development, developers may agree with a public entity to build additional infrastructure (s.c. “special residential development act” of 2018). The act requires a formal “agreement” between the municipality and the developer, if local standards of equipment with public infrastructure are not met.

In projects of urban renewal, developers may be asked to provide technical or social infrastructure or social housing (Spatial Planning and Development Act of 2003). Officially the obligations are not negotiable, as the requirements should be inscribed beforehand in legally binding land use plans. There is no example of adoption in the country up to the present date, so in practice there might be changes in the procedure.

Implementation is challenging because municipalities lack an adequate legal framework. In the obligation to build public roads, in most cases there are no official formulas to calculate the charges. The land subdivision levy can only be imposed when there is a valid legally binding land use plan for the area.

Urban land readjustment can be used for urban expansion and renewal. Municipalities carry out land readjustment projects on their own in areas marked as mandatory in local development plans or upon request from landowners whose land amounts to at least 50% of the affected area. Municipalities very rarely implement the instrument and collect the revenues.

In the case of undeveloped plots, the participation of resisting landowners is compulsory. Land readjustment is legally binding and changes the status of land ownership. There is no need to resort to forcible mechanisms such as expropriations.

A share of readjusted plots is reserved for road construction – from which landowners will benefit. Landowners receive cash compensation for the market value of land handed over for public roads. Municipalities are responsible for building this basic infrastructure, in exchange for a cash payment from landowners (opłata adiacencka) that is calculated as a share of land value increase due to the land readjustment carried out. This share is 50% maximum, upon municipalities’ discretion.

After readjustment, landowners receive a plot with a surface area proportional to their original holdings, plus cash compensation for the land taken. However, if the land values more, landowners have to pay the municipality back a share of the land value increase. They cannot exchange readjusted plots for cash.

One obstacle to implementation is the resistance by landowners, who often appeal in courts against the decision to readjust plots. The other obstacle is that the revenues collected do not compensate the costs of carrying out land readjustment projects, mainly the costs of acquiring the land and constructing public infrastructure. Lastly, the fact municipalities frequently charge the land subdivision levy reduces the need to resort to land readjustment projects, which are more complex and involve multiple landowners.

Local governments can charge landowners for the increase in property values that results from changes in land uses stipulated in legally binding land use plans. The charge is paid in cash in a lump-sum, when and if the property is transferred. The charge cannot exceed 30% of the increase in property values. In theory, the implementation of the instrument is obligatory, but due to various possibilities to avoid executing it, in practice, local governments rarely implement it and collect the revenues.

The main obstacles to implementation are the narrow scope of incidence and the consequent small revenues collected. For one, the charge is only collected in the event a land transaction has taken place. Secondly, in accordance with the law municipalities can collect as little as 0,1% of the land value gains, in which case the charge would be smaller than the cost of incurring it.


[3] OECD (2022), “Subnational government structure and finance”, OECD Regional Statistics (database), https://doi.org/10.1787/05fb4b56-en (accessed on 13 January 2022).

[8] OECD (2021), “Subnational government structure and finance”, OECD Regional Statistics (database), https://doi.org/10.1787/05fb4b56-en (accessed on 25 November 2021).

[2] OECD (2017), Land-use Planning Systems in the OECD: Country Fact Sheets, OECD Regional Development Studies, OECD Publishing, Paris, https://doi.org/10.1787/9789264268579-en.

[1] OECD/UCLG (2019), 2019 Report of the World Observatory on Subnational Government Finance and Investment - Country Profiles, OECD/UCLG.

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