The Polish Government is proposing an increasing in the taxation of profits made from the sale of real estate to 19% from 10% as of 2007. The tax is waved If the property was held for more than five years.
Our view: Despite the proposal being negative, the increased taxation should apply to residential real estate project and hence should have a limited impact on GTC, which is focusing on commercial projects mostly. In addition, given the demand for quality residential projects being strong, we expect that most of the projects are bought for living and to lesser extend for speculative reasons, in which case the holding period exceeds five years on the average.