Is it worth opening a housing account? What should I watch out for?

KHousing accounts are a solution introduced in July 2023 alongside the Safe Loan 2%. The latter tool is currently not functioning, while the housing account is still intended to help Poles save for the purchase of their own property. Preferential conditions of the housing account include a regular bonus from the state, depending on the inflation rate or the rate of increase in housing prices. What exactly does a housing account entail, and who can benefit from this solution? Is it worth considering opening one if you dream of buying your own place? What should you watch out for, and what must you remember when managing a housing account? We explain!

Who can maintain a housing account?

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

The program's regulations allow for certain exceptions. Individuals who currently own or have previously owned property rights can maintain a housing account, but:

• They acquired this right by 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 available perks, one must deposit an amount ranging from 500 PLN to 2000 PLN into the account each month, although the individual deposits do not have 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-free. The second incentive is the so-called housing bonus, which is provided to savers once a year by the Bank Gospodarstwa Krajowego. The bonus is calculated in one of two ways, whichever is more favorable for the participant that year, namely:

• Annual inflation rate,
• price growth rate of square meter of usable area of residential building according to GUS.

Here's the translation:

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

The bonus is exempt from taxation, but it should be noted that it is initially only accrued, and it can only be used after three years and at the moment of payout, provided that the funds are allocated for housing purposes.

The annual bonus cannot be lower than 1% and higher than 15%. At the time of payout, the account owner cannot be the owner of property acquired through inheritance under the previously mentioned rules, meaning that 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 a property along with finishing,
• Renovation of an owned apartment or house previously taken out of use.

What to Watch Out For When Managing a Housing Account

The lack of taxation and the prospect of receiving a bonus undoubtedly encourage one to open a housing account. However, it is important to remember that the program imposes certain restrictions on the beneficiary. What should you watch out for when managing a housing account?

Selling and Renting 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 repay part of the received bonus.

Five Years to Start Construction

Using the funds for purchasing a building plot requires starting the investment within the next five years, or you will have to return the bonus. The same limit applies to other housing purposes, such as renovation or remodeling of the property.

Transactions Excluding Close Family

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

No Inheritance of the Bonus

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

Bonus Not Always for the First Calendar Year

The housing bonus for saving 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 have to wait longer than three years for the bonus.

Be Cautious About Interest Rates

Banks managing housing accounts cannot offer you worse terms than 75% of the rate currently offered to new clients or less than 50% of the WIRON index. You will likely receive a better offer as a short-term promotion, so be sure to calculate the full interest rate accurately.

Housing Account Converted to a Deposit

If you miss the obligation to make regular deposits or if ten years pass since opening the account, your housing account will become a regular deposit, and you will lose the privileges you previously had.

Is a Housing Account Worth It?

A housing account can prove to be a beneficial solution that motivates you to save regularly and protects you from the effects of inflation. On the other hand, if you find the perfect property at a very attractive price, for example in the Poznań investment Grunwald Między Drzewami, within three years, you will not be able to use the housing bonus for its purchase. Remember that by opening this account, you cannot manage your accumulated capital flexibly, as in many cases, the contract conditions would deprive you of the most important benefits.