Real estate in Slovakia

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Buying property in Slovakia, you’ll be able to not only enjoy the beauty and the sights whenever you want, get acquainted with the country and its people, study language and cultural peculiarities of this place, but also to move to Europe. Why is it so popular nowadays to buy property in Europe?

There are several objective reasons:

  • Firstly, the possibility to be a part of new culture, history and traditions. Quite a wide range of real estate items: from modest houses in rural area to luxury villas in the Tatras and apartments in historic buildings of Bratislava.       
  • An important factor is security – a very important parameter when selecting a place to live.
  • Absence of any national, religious and territorial conflicts, of which many other countries, unfortunately, are full, which makes Slovakia a country with one of the lowest crime rates in the EU countries.
  • Real estate is first of all an investment and property in the EU is one of the best investments. Your own housing in Slovakia along with a long-term financial plan will allow you not to worry about decent and stable income.
  • Investment that brings stable income; you can rent your property out, which will be an additional source of your income.  

Legal basis of real estate acquisition by foreigners

         There aren’t many restrictions concerning property in Slovakia. For example, you don’t need to get permission to buy an apartment or house in Slovakia. The restriction applies to foreign citizens without permanent residency in Slovakia or to foreign legal entities and acquisition by them of the title to real estate in the form of agricultural and forest land if such land is located outside the built-up area of settlements.

The acquisition of such property by foreigners is prohibited, except if this property is a matter of inheritance.

The EU citizen with residence permit or permanent residency in Slovakia can buy agricultural land if he has used it for at least three years. It follows that foreign citizens can without any restrictions buy, for example, apartments, commercial premises and dwelling houses with adjacent plot or any land plot within the limits of a settlement.

           Taxation of real estate  

           In Slovakia there are two taxes regarding real property, namely income tax and real estate tax. In case of legal entities there is also VAT.

The real estate tax in Slovakia is one of the property taxes and is annually paid by a property owner. The real estate tax is a local tax and, therefore, its amount is defined by local self-governments and is different in different regions of Slovakia. The tax doesn’t go to the state treasury, but is income of local self-government. The real estate tax in Slovakia is one of the lowest in the European Union, and the EU often talks about increasing it. The amount of tax does not depend on the property value but on its size, i.e. square meters. After the acquisition of property, a new owner must inform the local self-government about the purchase of new property within 30 days after its acquisition. The same obligation arises in case of the sale. The tax liability arises on January 1 of the reporting period of the year following the period, when a taxpayer became a property owner and ends on December 31 of the year, when a taxpayer loses the real estate title. A tax return should be filed no later than January 31 of the reporting period, during which a taxpayer’s tax liability arose. A tax return for the next reporting periods is filed only in case of changes affecting the tax amount, such as, for example, purchase of new property, sale of a part of existing property, change of property type (for example, from residential to non-residential).

If you own only one property item without any changes, you file a tax report only once after its acquisition and do not file any tax reports in subsequent years. The procedure is as follows: after filing a tax return, the local self-government calculates the tax amount and sends you a cash or bank order with the indication of the tax amount by registered post for payment. You must pay the tax within 15 days upon its receipt.

         The individual tax charged on the property sale is paid in case of selling property in Europe or renting it out. In case of renting out property in the EU, a non-taxable base is applied, that is 500 EUR per year. A taxpayer is also entitled to reduce a tax base by all expenses connected with property or by the tax deduction amount, which is 40% of income specified by law; such deduction is called lump-sum expenses.

         When selling property in Slovakia, a tax base is reduced by the amount of expenses connected with the purchase of the property. When selling property, owned by a taxpayer for more than five years, the exemption in full from individual tax for such income is applied.  

The tax on property received by gift was cancelled 10 years ago. In case of the property acquisition, VAT taxpayer uses the possibility of VAT refund, included in the purchase value of the acquired property, but only when it is necessary to buy property in Slovakia for the purpose of its use for entrepreneurial purposes and not, for example, for the residence of the director general in this property. The sale of buildings or their parts (including apartments), including plots on which the buildings being sold are located, owned by the seller for more than five years, or five years after commissioning, is VAT-exempt for VAT taxpayers. VAT taxpayers, at their discretion, may not exempt the sale of such property from VAT. The sale of all types of plots, except for the plot with building permit, provided there is no building on it, is carried out ex VAT.