Questions and answers

Below there are the answers to the most frequently asked questions about leasing the property.

1. What is leasing of the property?

Leasing of the property involves purchasing of the property by Property Lease Fund S.A. and provision it to be used by the lessee under the leasing agreement for monthly rents payable by the lessee for Property Lease Fund S.A.
The most popular among customers is the financial leasing (recoverable), it aims at the customers, who already have the property, and want to release the frozen money and are looking for high tax costs (the tax shield).

2. For what period of time and to what amount do you provide leasing for the property (minimum and maximum)?

The leasing agreement is usually concluded for 60 months, but there are periods of both longer and shorter. We finance transactions, in which our commitment shall not exceed the amount of 5 million PLN.

3. To which market value do you finance?

The market value is of the secondary importance. This depends of the design of the financial plan of the transaction, in which our commitment is at the level of 5 million PLN.

4. Why do you offer only financial leasing and refundable financial leasing?

The financial leasing and the refundable financial leasing formally do not differ. The terms of the operating leasing - minimum 60 months, large final value (redemption), cash flow unfavourable to the lessee (contribution to purchase) put the operating leasing as less favourable in many cases.

5. Can I, through the recoverable) leasing, update the value of the property to the market value and begin to depreciate the property from the market value, e.g. 1.2 million PLN, now it is in the books with a value of 400 000 PLN (purchased 7 years ago)?

Yes. The recoverable leasing is the only transaction that allows getting the value of the asset in the asset value both for tax and balance-sheet purposes, without having to make a periodic valuation.

6. I owe the property worth 2 million PLN, I need one-time costs at the level of 250 000 PLN for the month of signing the leasing agreement, is it possible?

Yes, the design of the agreement and the schedule allows for such a solution.

7. Can I, through the recoverable financial leasing, speed up the depreciation period of the property?

If the property is subject to the provisions of article 16j of the Act of the Income Tax of the Legal Entities (parallel to the natural persons, the article 22j), it is possible.

8. Can I pay the leasing in advance?

The leasing agreement can always be shorten or terminated. The problem, however, involves the settlement for this reason. As far as the operating leasing involves significant restrictions, the financial leasing does not involve them at all.

9. How long does it take to grant leasing (from the application to provision of funds)?

This is dependent on many factors, due to the fact of concluding the leasing agreement in the form of a notarial act. Development of the property leasing agreement requires much more effort and time, rather than in the case of other objects of leasing. This period can last e.g. 10 days as well as two months.

10. Can I, being an owner of the property, recover the frozen funds from it and to which market value?

The recoverable leasing is only form of recover of some of the funds frozen in non-current assets without disposal of these assets. The amount of these recovered means depends on each individual terms and can reach up to 100%.

11. Can I include the expenditure on the property leasing payments fully to the tax expense when it is incurred?

This possibility is provided only by the operating leasing. However, due to a whole range of other statutory restrictions in this formula we prefer leasing the financial leasing.

12. Do I need additional securities for the property leasing?

Of course, it can be necessary to provide additional security, but it is subject to the risk assessment to the lessee and the leasing subject.

13. Can I be granted approx. 300 000 PLN if I set up a business yesterday? (I already have a property worth 700 000 PLN)

It is possible and it is subject to individual arrangements with the lessee.

14. I have a plot for the investment purposes, worth approx. 5 million PLN, and I need cash for the investment. Can I turn to you?

The Polish tax laws allow the leasing of land despite the fact that they are not covered by the tax depreciation. The leasing of land can be only in the form of the financial leasing.

15. What happens when the leasing fund declares bankruptcy? Do I lose my property and all paid instalments?

The current provisions of the insolvency law (article 114) exclude possibility of withdrawal from the leasing agreements by the receiver. This means that the receiver continues the leasing agreements on the existing terms, that is to say, the lessee does not lose anything.

16. What does the height of the initiation contribution in the property leasing depend on?

This is always dependent on the individual determinations of the lessee, and is essentially the cumulative assessment of the risk to the lessee and the property.

17. What happens when the agreement comes to an end and I pay off my last instalment in the financial leasing?

When all terms of the leasing agreement are met, including leasing payments, the ownership tight is provided (not purchase) in the form of a notarial deed.

18. What are the resulting tax benefits?

All the benefits, not just tax, from leasing shall be subject to the terms of the leasing agreement. These are called "tax shield or cover", specifying the saved value, due to the "tax shield" they can even exceed the cost of the leasing agreement.

19. How much does it cost?

The total cost of the leasing agreement is always subject to the individual terms of the agreement, and results from the findings of the lessee on the basis of the risk assessment concerning the lessee and the leasing subject.

20. What happens to the property if something happens to me before the end of the agreement?

The provisions of the civil code (article 709/15) provide the lessor (the financing entity) with possibility to terminate the agreement with all of the consequences. However, there is always possibility of fixing the terms of "return" (sale, assignment of the agreement) to an existing user or other third party.

21. Why is it better to take the property in leasing than in a regular credit?

The basic terms for the Bank's decision to grant a credit is so-called creditworthiness, which is not always at a satisfactory level. Leasing can involve other assessment criteria. In addition, banks have very limited credit offer for the business entities under the mortgage lien.

22. What security shall be applies by the fund in relation to the customer? (e.g. bills of exchange, etc.)

The leasing subject is the primary security. In addition, there is always the bill of exchange of the lessee, together with a declaration of the bill of exchange. It can also be necessary to provide other additional securities, e.g. a letter of guarantee, mortgage, pledge registration, etc.

23. Can I continue to rent the property if you sell it to Property Lease Fund and sign the recoverable leasing agreement with you concerning my property?

In accordance with the definition of the leasing agreement, article 709/1 CC and article 17a or 23a in the tax laws, the leasing agreement means that one party provides the other party with the subject and have benefits from it. It shows that the user can, in specific situations, subrent the leasing subject and have benefits from it.

24. Which party incur the costs of the property valuation and the notarial costs?

All costs related to the agreement shall be the incurred by the user. However, they can be incurred in a different form.

25. Do we sign the leasing agreement in the form of a notarial deed?

Definitely YES.

26. What happens if I fall behind with payment instalments for 3 months?

In this case, the lessor has the right to terminate the agreement due to the lessee. However, there is possibility of renegotiating the terms of the agreement.

27. I am interested in acquisition 700 000 PLN from my property, the market value is approx. 1 300 000 PLN, but I have a mortgage on the property in the amount of 270 000 PLN - can I can try to obtain cash from you and repay and repay the credit at the same time?

This is possible on the basis of the promissory notes for release the mortgage securities issued by the lenders. In this case, the amount for credit payment shall be paid directly to the bank by the lessor.

28. What is the commission for granting leasing? How is the annual interest rate calculated from leasing, based on which reference rate?

The leasing rate is based on a fixed interest rate specified individually with the customer. The preparatory commission (for granting leasing) is not more than 1.5% of the capital provided by the lessor (see details in section The Terms of Leasing/ The table of fees and commissions).

29. I would like to take leasing for the office building; however, I do not have cash, should I instead of cash provide you with the property as security?

This is possible on the basis of mutual agreements of the terms of the agreement.

30. What is the tax deductible revenue in the leasing property?

The same rules apply in the property leasing and any other fixed assets - the operating leasing the entire leasing plus own cash, and in the financial leasing the rent and instalment part from the leasing instalment plus own depreciation. It is also possible to apply different design to increase the tax costs.

31. I own the premise, which is covered by the bank mortgage, I would like to pay off the credit using the leasing means and obtain 100 000 PLN, can I carry out such a transaction with you?

It is not possible to finance the objects, which are subject to a mortgage (both the financial leasing and the recoverable financial leasing). i.e. we do not pay the mortgage with leasing.

32. In the property I want to purchase, 3 and 4 part of the land register contains equal entries, is it possible to finance such a transaction by Property Lease Fund S.A.?

Parts 3 and 4 of the land register must be free from any entries and commitments.

33. I own the flat, in which I am registered, I would like to take advantage of the recoverable financial leasing and obtain approx. 200 000 PLN, do I need to check out prior to transaction?

In residential properties and homes, when purchasing or involving the recoverable leasing - all must be checked out the property.

34. What is the maximum period of leasing?

The leasing period (financial and recoverable) is up to 5 years (with possibility of negotiations in individual cases up to 7 years).

35. I would like to purchase a production hall for my business, can I do this with Property Lease Fund?

We do not provide funds for large production facilities, warehouses, tents, etc.

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