Is it worth opening a housing account? What should I be careful about?

The housing account is a solution introduced in July 2023 alongside the safe 2% loan. The latter is currently not functioning, while the housing account is still intended to help Poles save for the purchase of their own property. The preferential conditions of the housing account include a regular government bonus tied to the inflation rate or the rate of increase in property prices. What exactly does the housing account entail, and who can benefit from this solution? Is it worth considering opening one if you dream of purchasing your own place? What should you be cautious about, and what should you definitely remember when managing a housing account? We explain!

Who Can Open a Housing Account?

Not every citizen can become a beneficiary of this program. The housing account is intended for individuals who are at least 13 years old but have not yet turned 45. Another requirement is that the individual must not own an apartment, a single-family house, or cooperative rights to such properties.

The program's regulations allow for certain exceptions. Individuals who currently own or have previously owned property rights may still be eligible for the housing account, but:

• They acquired this right through inheritance while maintaining a housing account.
• They had such a right earlier due to inheritance, but with a share not exceeding 50% of the property.
• The owned property has been excluded from use.
• They reside in the property with children (condition dependent on the size of the property and the number of children).

How does a housing account work?

A housing account, once established, encourages the owner to save regularly. To benefit from the provided perks, one must deposit an amount between 500 PLN and 2000 PLN into the account each month, with individual deposits not needing to be the same. Once a year, the saver has the right to skip this obligation without any consequences. The minimum duration for using a housing account is 3 years, while the maximum is 10 years.

Benefits? The interest earned on a housing account is tax-exempt. The second incentive is the so-called housing bonus, which is awarded to savers by the Bank Gospodarstwa Krajowego once a year. The bonus is calculated in one of two ways, whichever proves more advantageous for the participant that year, namely:

• Annual inflation rate,
• price increase rate per square meter of usable area of residential buildings according to the Central Statistical Office (GUS).

This is an attractive offer, considering that new apartments in Poznań and other Polish cities have generally been increasing in price more dynamically than the annual inflation rate in recent years.

The bonus is tax-exempt, but it should be noted that it is initially only accrued; it can only be used after three years and only at the time of withdrawal, provided that the funds are allocated for housing purposes.

The annual bonus cannot be lower than 1% or higher than 15%. At the time of the bonus payout, the account holder cannot own a property acquired through inheritance under the aforementioned rules, meaning in practice, they should have sold the property or their shares beforehand.

What can the housing allowance be used for – examples:

• Construction and finishing of a single-family house
• Purchase of land for the construction of a single-family house
• Acquisition of an apartment or house and its finishing
• Acquisition of cooperative ownership rights to real estate along with finishing
• Renovation of an existing apartment or house previously excluded from use.

What to Watch Out For When Maintaining a Housing Account

The absence of taxation and the prospect of receiving a bonus undoubtedly encourage you to open a housing account. However, it is important to remember that the program imposes certain restrictions on the beneficiary. What should you be cautious about when maintaining a housing account?

Sale and Rental Possible After Three Years

If your housing account allows you to finance the purchase of a property, you cannot sell or rent it for the next three years unless you return part of the received bonus.

Five Years to Start Construction

If you intend to use the funds for purchasing a building plot, you must start the investment within the next five years to avoid returning the bonus. The same limit applies to other housing purposes, such as renovation or reconstruction of the property.

Transaction Without Immediate Family

The accumulated funds cannot be used to purchase property from your immediate family, specifically from individuals classified in the first tax group. Otherwise, you will lose the bonus.

No Inheritance of the Bonus

The funds accumulated in your housing account can be inherited, but your heirs will not be entitled to the accrued bonus.

Bonus Not Always for the First Calendar Year

The housing bonus for savings in the first calendar year is only accrued if the housing account has been maintained for at least nine months. In other words, if you open a housing account in April or later, you will wait longer than three years for the bonus.

Caution Regarding Interest Rates

Banks offering housing accounts cannot propose worse terms than 75% of the rate currently offered to new clients or less than 50% of the WIRON index. In the housing account proposal, you may receive better terms as a short-term promotion, so be sure to calculate the full interest rate carefully.

Housing Account Converted into a Deposit

If you neglect the obligation to make regular deposits or if ten years pass since the account was opened, your housing account will become a regular deposit, and you will lose the privileges that were previously granted to you.

Is a Housing Account Worth It?

A housing account can prove to be a profitable solution that motivates you to save regularly and protects you against the effects of inflation. On the other hand, if you find the perfect place at a very attractive price, such as in the Grunwald Między Drzewami investment in Poznań, you won’t be able to use the housing bonus for its purchase before the three years are up. Remember that by opening this account, you cannot flexibly manage the accumulated capital, as the terms of the agreement may deprive you of the most important benefits in many cases.