Real Estate Transactions

in Slovakia
 INTRODUCTION
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:

▪ after the end of the above-mentioned transitional period (May

2014); from June 2014, a new set of rules is effective for acquiring
an agricultural land which apply to any purchaser regardless of
the residency or corporate seat (the details are described below),
▪ no new rules were introduced with respect of the transferee of
forests; therefore, foreign nationals and companies are able to
directly acquire forests in Slovakia.

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

a) Against the payment of an administrative fee (in the amount of

EUR 8); or
b) On the website www.katasterportal.sk (available also in English
language), free of charge, however this extract can not be used
for legal acts. This online registry is updated on weekly basis.

2 | Real Estate Transactions in Slovakia

CONTENTS
Introduction 2
GENERAL INFORMATION ABOUT REAL ESTATE TRANSFER PROCESS 4
Execution of a written agreement ........................................................................................................ 4
Registration of the ownership title in the Real Estate Registry ............................................................ 5
USUAL SCENARIO OF THE REAL ESTATE TRANSACTION AND FEES 5
LIMITATIONS OF THE ACQUISITION OF THE REAL ESTATE 6
Transfer of an agricultural land only to specific transferee .................................................................. 6
Prohibition of tillage of land .................................................................................................................. 7
REAL ESTATE TRANSFER TAXATION 7
Real estate transfer tax ........................................................................................................................ 7
Real estate tax ..................................................................................................................................... 7
Value added tax ................................................................................................................................... 7
Income tax ............................................................................................................................................ 8
OTHER ASPECTS 9
Specificity ............................................................................................................................................. 9
Legislation .......................................................................................................................................... 10

3 | Real Estate Transactions in Slovakia

GENERAL INFORMATION ABOUT REAL ESTATE
TRANSFER PROCESS
The acquisition of real estate in Slovakia requires two obligatory steps:

I. execution of a written agreement,

II. registration of the title in the Real Estate Registry.

I. Execution of a written agreement

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.

4 | Real Estate Transactions in Slovakia

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.

II. Registration of the ownership title in the Real Estate

Registry
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.

USUAL SCENARIO OF THE REAL ESTATE

TRANSACTION AND FEES
In line with the established practice

I. Parties conclude a purchase agreement, the signature of the transferor shall be verified
II. Parties regulate how the payment of the purchase price should be “secured” (from the signing
of the agreement to the registration of the new ownership), for example:

▪ Purchase price can be deposited in the notarial custody for the benefit of the
transferor,
▪ Purchase price can be deposited on escrow account administrated by a bank for the
benefit of the transferor, and the purchase price will be paid to the transferor once the
respective Resolution of the Real Estate Administration is issued.

III. Application is submitted to the respective Real Estate Administration. The Administration
decides on the Application for the registration of the ownership title within 30 days, the fee is
in the amount of EUR 66. The parties of the agreement can apply for registration in
accelerated proceedings, in this case the fee is in the amount of EUR 266 and the registration
is completed within 15 days.

5 | Real Estate Transactions in Slovakia

LIMITATIONS OF THE ACQUISITION OF THE REAL
ESTATE

Transfer of an agricultural land only to specific transferee

The owner of the agricultural land may in general, without further restrictions, directly transfer the
agricultural land only to (regardless the permanent residency or registered seat):
a. An agricultural company or farmer, both of them performing agricultural activity for at least
three years prior to the transfer in the municipality where the agricultural land is situated;
b. An existing co-owner of the agricultural land; or
c. persons related to the owner (in case that the owner is a natural person).

If the buyer does not fulfil any one of the conditions stated above, the seller must follow following
procedure:
▪ owner of the agricultural land is obliged to publish an Offer, which shall inter alia include the
requested price for transfer; in (i) Register of Publication of Offers kept by the Ministry of
Agriculture and (ii) also on the Official Municipality Board in the municipality where the
agricultural land is situated
▪ law requires the owner to transfer the agricultural land only to a buyer with permanent
residency or a registered seat in Slovakia for at least 10 years prior to the transfer. In addition,
the owner is obliged to give preference to interested buyers in the following order:
1. buyer who is a farmer in the municipality where the agricultural land is situated for at least
three years,
2. buyer who is a farmer in a neighboring municipality for at least three years,
3. buyer who is a farmer anywhere in Slovakia for at least three years,

6 | Real Estate Transactions in Slovakia

 4. any other buyer (of course meeting the condition of the residency or of the seat in
Slovakia for at least 10 years,
always for a price that is not lower than the price published in the Offer.

The fulfilment of these conditions must be confirmed by the respective District Authority, otherwise the
transfer will not be registered in the Real Estate Registry (and thus, the ownership will not be
transferred).

Prohibition of tillage of land

It is prohibited to tillage the (i) agricultural land under the area smaller than 2 000 m2 and (ii) forest
land under the area smaller than 5 000 m2.

REAL ESTATE TRANSFER TAXATION

The table below provides a brief overview of fees and taxation with respect to the real estate transfer
in Slovakia.

Seller Buyer
Taxation
Individual Company Individual Company

Real estate transfer

As from 1 January 2005 a real estate transfer tax is not levied in Slovakia.
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
Real estate tax following the year in which the property is acquired and ends on 31 December of
the year in which the ownership ends.

The general rate of the land tax is 0.25% of the value. The general rate of the
building tax and the apartment tax is EUR 0.033 per m2. The municipalities may
increase or decrease these rates in accordance with the local conditions.

The delivery (sale) of construction or a part thereof in Slovakia, including the supply
of building land, on which the structure is constructed, VAT is exempt by a taxable
Value added tax person 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 building land is supplied along with the construction, the above-
mentioned rues applies.

7 | Real Estate Transactions in Slovakia

 Seller Buyer
Taxation
Individual Company Individual Company
Tax residents are subject Tax resident Upon payment of Upon payment of
to Slovak personal company is subject purchase price for purchase price for
Income tax income tax on their to Slovak corporate the Slovak real Slovak real estate,
worldwide income, income tax on its
estate, generally generally no
including income from worldwide income,
real estate. including income no withholding tax withholding tax
from real estate. applies. Some applies. Some
If real estate qualifies the exceptions may exceptions may
activity as business The income of apply if the apply if the
income, capital gains corporations is to be recipient of the recipient of the
from selling the real regarded as income is a income is a
estate would be fully business income in
foreign person foreign person
taxable. If the activity is any case,
not qualified as a regardless of the from other than from other than
business activity, the sale nature of the EU Member State EU Member State
of real estate within a income (e.g. income or from outside or from outside
period of 5 years is from real estate). the EEA. the EEA.
taxable.
Capital gains from If the purchased The acquisition
The tax base is the selling the real real estate will costs must be
difference between sales estates are taxable.
become part of generally
price and acquisition The 21% flat tax
costs (note: a loss cannot rate applies. The the business capitalized and for
be claimed). A sale after loss upon a sale of assets, the buildings such
expiration of the five-year some buildings and acquisition costs acquisition costs
holding period is not land cannot be must be generally can be according
taxable. claimed. capitalized and for to the Slovak
buildings such Income Tax Act
The 19% or, as the case For non-residents,
may be, the 25% tax rate income from acquisition costs depreciated over
applies. transactions can be according the period of 20 or
For non-residents, concerning to the Slovak 40 years (20
income from transactions domestic real estate Income Tax Act years period
concerning domestic real is considered to be depreciated over applies e.g. for
estate is considered to be a Slovak sourced the period of 20 or industrial
a Slovak sourced income income and thus,
40 years (20 buildings, 40
and thus, they have to file they have to file tax
tax returns. returns. The 21% years period years’ period
tax rate applies. applies e.g. for applies e.g. for
The 19% or, as the case industrial administrative
may be, the 25% tax rate buildings, 40 buildings, hotels).
applies. years’ period Land plots are not
applies e.g. for depreciable.
administrative
buildings, hotels). Similar rules
Land plots are not applies for non-
depreciable. residents as for
tax residents..
Similar rules
applies for non-
residents as for
tax residents.

8 | Real Estate Transactions in Slovakia

OTHER ASPECTS

Specificity
I. Ownership of a land does not include ownership of a building located on it.

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.

II. Due diligence

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.

9 | Real Estate Transactions in Slovakia

 Legislation
▪ The Act No. 40/1964 Coll., Civil Code, as amended
▪ The Act No. 162/1995 Coll. on the real estate cadaster and entering of ownership and other
rights to real estates, as amended (Cadastral Act)
▪ The Act No. 140/2014 Coll. on acquiring the ownership of agricultural land, as amended
▪ The Act no.180/1995 Coll. on some measures for land ownership arrangements, as amended

Disclaimer

Please note that our publications have been prepared for general guidance on the matter and do not represent a
customized professional advice. Furthermore, because the legislation is changing continuously, some of the
information may have been modified after the publication has been released. Accace does not take any responsibility
and is not liable for any potential risks or damages caused by taking actions based on the information provided
herein.
10 | Real Estate Transactions in Slovakia
Author

Karol Ďuriga

Senior Associate

Karol.Duriga@accace.com

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11 | Real Estate Transactions in Slovakia