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The real estate market in Slovakia was fully liberalized in May 2014, when the transition period negotiated between Slovakia and the European Union ended (European law requires EU member states not to restrict acquisitions of real property by nationals of other member states, however during EU accession negotiations the Slovak Republic negotiated from this rule the temporary exemption concerning agricultural and forest land).
In general, Slovak citizens, Slovak companies (also with foreign owners), foreign citizens and foreign companies are allowed to purchase and sell real estates in Slovakia, however
All real estates located in Slovakia are registered in the Real Estate Registry and pursuant to the Cadastral Act, information registered in the Real Estate Registry is deemed reliable and binding unless the contrary is proved.
Real estate is evidenced on the respective Ownership Certificate, which includes following information: (i) information on real property; (ii) information on the owners and eventual co-ownership shares; and (iii) information on any encumbrances, pledges, easements and other rights of third persons to the real property.
The extract from Ownership Certificate may be obtained by everyone:
The acquisition of real estate in Slovakia requires two obligatory steps:
execution of a written agreement,
registration of the title in the Real Estate Registry.
The ownership of the real estate may be transferred by written purchase agreement concluded under the Slovak law. The demonstration of will to transfer the real estate of both the transferor and the transferee must be on the same document and the signature of the transferor shall be verified.
The purchase agreement can be drafted by either party and it does not need to be drafted by a public notary or certified attorney. The purchase agreement must include all the particulars required by the Civil Code and must also comply with the requirements of the Cadastral Act specifying more precisely its content.
The purchase agreement must be in Slovak language (or Czech language). Any other language version must be translated into Slovak by a certified translator, making it eligible to be registered in the Real Estate Registry.
Prior to the execution of the purchase agreement, the parties may conclude a preliminary agreement in which they undertake to enter a purchase agreement within the agreed time period. Based on the preliminary agreement, either party can sue for the performance of the purchase agreement if the other party breaches the obligation to enter in the purchase agreement.
The title to real estate is acquired by the registration in the Real Estate Registry upon the Resolution of the competent Real Estate Administration.
The registration process starts by the submission of the Application to the respective Real Estate Administrator and should be completed by the Resolution of the Real Estate Administration.
In line with the established practice
It is prohibited to create a new land as a result of the splitting up of existing land with an area of less than 3 000 m2 in the case of agricultural land and less than 5 000 m2 in the case of forest land.
The table below provides a brief overview of fees and taxation with respect to the real estate transfer in Slovakia
| Taxation | Seller | Buyer | ||
| Individual | Company | Individual | Company | |
| Real estate transfer tax | As from 1 January 2005 a real estate transfer tax is not levied in Slovakia. | |||
| Real estate tax | Real estate tax is levied on Slovak property, which comprises land, buildings and flats (apartments). In all cases, the tax liability arises on 1 January of the year following the year in which the property is acquired and ends on 31 December of the year in which the ownership ends. | |||
| Value added tax | The delivery (sale) of construction or a part thereof in Slovakia by taxable person, including the supply of building land, on which the structure is constructed is subject to 20% VAT rate. Reduced VAT rate of 5% is applicable from January 1, 2023 in case of delivery of construction of a part thereof if special conditions for state-assisted rental housing are fulfilled. Exemption from VAT applies, if the delivery is carried out after laps of five years from the first use of the building. The VAT registered person may opt to charge the VAT. The seller is only entitled to a full input VAT deduction for services received related to the acquisition of real estate and the acquisition costs when the sale is subject to VAT. If input VAT was deducted, a VAT-exempt sale within 20 years leads to a pro-rata reversal of input VAT deduction. Supply of land except for supply of building land by a taxable person is tax exempt. As long as the land is supplied along with the construction, the rules for the sale of construction applies. | |||
| Income tax | Tax residents are subject to Slovak personal income tax on their worldwide income, including income from real estate. If real estate transaction qualifies as business activity, capital gains from selling the real estate would be fully taxable. If the activity is not qualified as a business activity, the sale of real estate within a period of 5 years is taxable. The tax base is the difference between sales price and acquisition costs (note: a loss cannot be claimed). A sale after expiration of the five-year holding period is not taxable. The 19% or, as the case may be, the 25% tax rate applies. For non-residents, income from transactions concerning domestic real estate is considered to be a Slovak sourced income and thus, they have to file tax returns. The 19% or, as the case may be, the 25% tax rate applies. | Tax resident company is subject to Slovak corporate income tax on its worldwide income, including income from real estate. The income of corporations is to be regarded as business income in any case, regardless of the nature of the income (e.g. income from real estate). Capital gains from selling the real estates are taxable. The 21% flat tax rate applies. The loss upon a sale of some buildings and land cannot be claimed. For non-residents, income from transactions concerning domestic real estate is considered to be a Slovak sourced income and thus, they have to file tax returns. The 21% tax rate applies. | Upon payment of purchase price for the Slovak real estate, generally no withholding tax applies. Some exceptions may apply if the recipient of the income is a foreign person from other than EU Member State or from outside the EEA. If the purchased real estate will become part of the business assets, the acquisition costs must be generally capitalized and for buildings such acquisition costs can be according to the Slovak Income Tax Act depreciated over the period of 20 or 40 years (20 years period applies e.g. for industrial buildings, 40 years’ period applies e.g. for administrative buildings, hotels). Land plots are not depreciable. Similar rules applies for non-residents as for tax residents. | Upon payment of purchase price for Slovak real estate, generally no withholding tax applies. Some exceptions may apply if the recipient of the income is a foreign person from other than EU Member State or from outside the EEA. The acquisition costs must be generally capitalized and for buildings such acquisition costs can be according to the Slovak Income Tax Act depreciated over the period of 20 or 40 years (20 years period applies e.g. for industrial buildings, 40 years’ period applies e.g. for administrative buildings, hotels). Land plots are not depreciable. Similar rules applies for non-residents as for tax residents. |
Slovak law does not recognize the principle according to which the ownership of a land includes the ownership of a building located on it. Consequently, the owner of a land may be different form the owners of the buildings on it.
The real property ownership is registered in the Real Estate Registry. A Resolution of the respective Real Estate Administration approving an entry in the Real Estate Registry and the registration of the transfer in the Real Estate Registry may not be considered as a guarantee that the ownership title was validly transferred, as there are several circumstances under which the transfer was in compliance with law.
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