Leasing or selling land for RES: what to compare

The landowner to whom an RES developer applies usually chooses between two solutions: lease the parcel for several decades or sell it immediately. The difference is not just about how much money will come in the first year. It changes the type of legal relationship, the scope of risk, and what will remain in the family.

This text compares both options and indicates the regulations that shape them. It does not replace an analysis of a specific contract or an individual tax assessment.

Two different legal relationships

In the case of a lease, ownership remains with the previous owner. According to Article 693 § 1 of the Civil Code, the lessor undertakes to make the item available to the lessee for use and to collect benefits for a specified or unspecified period, while the lessee undertakes to pay the agreed rent. Article 693 § 2 of the Civil Code permits rent in money or in other types of benefits, as well as specified in a fractional part of the benefits, which is often used in settlement linked to energy production. The provisions on tenancy apply to leases by analogy, as indicated by Article 694 of the Civil Code.

Sale transfers ownership to the buyer. The owner ceases to decide on the land, is not responsible for its future, and will not recover it after the investment ends. For the developer, this solution simplifies financing, as banks assess ownership rights differently than contractual rights.

Criterion	Lease	Sale
Incomes	Periodic rent for the entire duration of the agreement	Price paid once or in instalments
Land ownership	Remains with the lessor	Transfers to the buyer
Risk on the owner's side	Project failure, lessee's financial condition, performance of obligations after the end of the lease agreement	It ends upon transfer of ownership and payment of the price.
Inheritance	Land and rights and obligations under the agreement	Funds obtained from the sale
Indexation	Possible, if the contract provides for it	Not applicable
Status after project completion	Return of the leased item under Article 705 of the Civil Code and the provisions of the agreement	Buyer's case
Tax settlement	Depends on the source of income and the owner’s status	It depends on the acquisition date and whether the disposal is made in the course of business activity.

For how long is the lease agreement concluded

The Civil Code does not prohibit long-term agreements, but it determines their effect. Article 695 § 1 of the Civil Code provides that a lease concluded for a period longer than thirty years is deemed to have been concluded for an indefinite period after the expiry of that term. An agreement for an indefinite period can be terminated, so parties to an investment that is to operate for several decades usually arrange the duration so as not to exceed this threshold, and separately regulate the extension.

The termination of the lease is governed by Article 705 of the Polish Civil Code: upon the end of the lease, the lessee is obliged, in the absence of a different agreement, to return the leased item in the state it should be in, in accordance with the provisions on the performance of the lease. The words "in the absence of a different agreement" are the most important for the landowner, because the agreement determines whether the installation will be dismantled and who will pay for it.

What does the rent amount depend on

Rates differ between projects and change over time, and published tables quickly become outdated. Instead of taking someone else’s figure as a reference point, check what in a given case increases or decreases the land’s value for the developer:

• distance from the substation and available capacity at that point in the network,
• land use in the local zoning plan or the need to obtain a zoning decision,
• soil class and terrain and environmental and water restrictions,
• parcel area and shape, as well as whether they form a single contiguous area,
• technology, because a photovoltaic installation, a wind turbine and an energy storage system occupy land in different ways,
• development stage at the time of the discussion and how much risk each party takes on,
• negotiating power, including the number of developers interested in the same area.

Comparison of listings makes sense only when you compare them in the same unit and for the same period, together with the rules of indexation and payments in the investment preparation phase.

Taxes: what follows from regulations and what requires assessment

In the case of a lease, the starting point is Article 10(1)(6) of the Personal Income Tax Act, which lists rental, sublease, lease, and sublease as sources of income, including the lease of an agricultural holding or its components for non-agricultural purposes, except for components of assets related to business activity. The provision of land for a RES installation is a non-agricultural purpose, so the provision explicitly covers such an agreement, provided that the land is not a component of the lessor's assets related to business activity.

For income from this source, Article 6(1a) of the Act on Lump-Sum Income Tax on Certain Revenues Earned by Individuals requires the application of a lump-sum tax on recorded revenues. Article 12(1)(4)(a) of this Act specifies the rates: 8.5% of revenues up to 100,000 PLN and 12.5% on the excess above that amount. For spouses who have submitted the declaration provided for in Article 12(6) of this Act, the threshold is 200,000 PLN, as stated in Article 12(13).

When selling land, Article 10(1)(8)(a) of the Act on Personal Income Tax classifies the sale of real estate as a source of income if it is not carried out in the course of business activity and is completed before the end of five years from the end of the calendar year in which the property was acquired or built. The tax on the profit from such a sale is 19% of the tax base, in accordance with Article 30e(1) of that Act. After five years, income outside of business activity does not arise in this source.

These are general rules, not a result for a specific owner. Settlement depends, among other things, on whether the owner runs a business, whether the land is part of an agricultural holding, when and how it was acquired, and whether joint ownership applies. Before signing the agreement, it is worth discussing this part with a tax advisor, as the consequences are calculated over many years.

Clauses reviewed by the landowner

• Rent indexation from the first year of the agreement, with a clearly specified index and the deadline for its application.
• Construction start date linked to a sanction, i.e., a contractual penalty or the right to terminate the agreement, when the developer delays the preparation phase.
• Land restoration after the end of exploitation, with security in the form of a guarantee or deposit, so that the obligation does not depend on the lessee's financial condition.
• Rules for transferring the contract to another entity, as projects change ownership even during construction.
• Right of first refusal, if the developer wishes to reserve it, along with an assessment of how much it restricts the freedom to dispose of the land.
• Easements required to bring the network and access road, described in terms of scope and remuneration.

Separately, it is worth ensuring that the lease is disclosed in the land and mortgage register. Without this, upon sale of the land, the buyer steps into the lease relationship in place of the seller, but may terminate it while observing statutory notice periods, as derived from Article 678 § 1 in conjunction with Article 694 of the Civil Code. Article 678 § 2 of the Civil Code excludes this right if the agreement was concluded for a fixed term, in writing, with a certain date, and the property was delivered.

Before you sit down for a conversation

Before you assess the developer’s proposal, check the context of your parcel. The tool check parcel for RES compiles public data for the specified location: capacity for the nearest entry in the operator’s capacity list, connection applications, local spatial development plan, nature protection and flood risk. A broader view of the network is provided by the map of available grid connection capacities, with the publication date of each operator’s data.

Both tools provide context from public registers and lists of operators. They do not confirm the possibility of connecting a specific project or that an investment will be made at a given location. If you want to show land more broadly, see land listings for RES or add your own land.

Checklist

• decide whether you are interested in periodic income or a one-off payment,
• check the contract duration and how the parties arranged the extension in relation to the threshold under Article 695 § 1 of the Civil Code,
• compare listings in the same unit and for the same period, together with the indexation rules,
• ensure indexation from the first year and the construction start date linked to the penalty,
• describe the obligation to restore the land and secure it, do not leave this to Article 705 of the Civil Code,
• consider disclosing the lease in the land and mortgage register and check the form and certain date of the lease agreement,
• discuss tax settlement with an advisor before agreeing on the rent or price,
• ask for an up-to-date extract from the land and mortgage register and compare the parcel designations with the content of the agreement.

Source materials

More on the structure of a lease agreement for RES investments: land lease for RES investment, key contractual clauses and land lease for 29 years, what to check before signing. Check the wording of tax regulations on the day you conclude the agreement.