Intro
The beginning of the real estate market in Slovenia (as it is organized today) started in the early years of the nineties (of the 20th century), coinciding with Slovenia declaring the independence. Since then, Slovenia enforced major significant changes on the RE market: changing the concept of the ownership, customizing legislation, modernizing (land) registers and never the less simplification of the procedures in various areas of activities related with RE.
Today, the process of changing legislation, in this field, is still not finished. New improvements/simplifications are expected.
Now, let’s suppose you are interested to have your own piece of this beautiful country.
Who can..?
While there are no restrictions when wishing to rent RE, you could stumble wanting to buy one. The main question is not “how to”, but “who can”. In not so distant past, only Slovenian citizens were able to buy a RE in Slovenia. But, everything has changed in the year 2004. This was the year Republic of Slovenia entered the European Union. With that act, all citizens of EU countries (Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxemburg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Spain, Sweden and United Kingdom) got the right to buy RE in Slovenia. According to agreement with EEA (European Economic Area), also citizens of Iceland, Liechtenstein and Norway can buy RE in Slovenia. Further then, citizens of Switzerland and United States are also capable of buying RE in Slovenia without any additional restrictions. The last group of countries, whose citizens can purchase a RE without any additional restrictions, are the EU candidate countries (Croatia, FYR Macedonia, Iceland again, Montenegro, Serbia and Turkey).
So, citizens of 37 listed countries can buy RE in Slovenia under the same conditions as Slovenian citizens can. How about citizens of other almost 200 countries? They have chances too, but the procedure is a bit longer and more complicated. According to the law, the Ministry of Justice have to recognize if “the Existence of reciprocity” is established between Slovenia and that certain country. If so, there is no obstacles more to overcome, if not, well, …, there are some alternatives.
Namely, also foreign-owned companies, who are listed in the Slovenian registry of companies, can buy a RE in Slovenia. Maybe, this is the (easiest) way, to purchase the desired piece of property.
How to.. ?
The person, who would like to rent or buy a RE, have to be “full aged” (at least 18 years old) and legal competent. Next, the person who would like to purchase a RE, have to obtain a Slovenian tax number and EMŠO number (from Central Registry of citizens of Republic of Slovenia).
When fulfilling all the above mentioned conditions, the focus can be turned to the more entertaining part of purchasing the RE. There are some useful web-portals with a large base of available RE in Slovenia and abroad. It should not be too complicated to find something appropriate. Still, it is strongly recommended to ask a RE agent for assistance. (You can find a list of licensed RE agents on the web page of Ministry of Agriculture and Environment: http://www.nepremicninsko-posredovanje.mop.gov.si/imenik/index.php). The agent will spare you some time and money. A good agent will help you with a lot of useful information about the certain locations, some local deviations and/or hidden faults and bonuses of the property, prices, trends, etc.
After you have found the One – the biggest, the cheapest, the most quality, with the most spectacular view – negotiations can start. Yes, it is understandable if you try to barging for the price and any other conditions regarding the process of purchase of RE. Again, the assistance of a good RE agent is priceless (a good agent will provide also the exact prices of recent-purchased RE in the neighbourhood).
After all the details of agreement are settled, a “paper work” can start.
A contract of purchasing the RE must be prepared by a law office or Public Notary Office (PNO). Some types of RE requires a special form of contract, which could be prepared only at the PNO. When the contract is prepared, both parties can sign it. Ara – deposit (10% of the value) – should be paid on the owner’s (of the RE) bank account.
A standard procedure is the following:
- Owner (seller) is obliged to pay Tax and after that, the Tax Administration (TA) of Republic of Slovenia will confirm the tax payment with a stamp on the original copy of contract. Usually the whole “tax procedure” last a few days or a week –despite the fact that by the law TA is obliged to resolve the case within 30 days of receipt of the application form.
- When the owner (of RE) gets back the TA-stamped (original) copy of contract, and the whole amount of the value of purchased RE is paid, the last step should be done – to go to the Public Notary Office (again) and authenticate signatures on the contract and citizenship of the buyer. A PNO will prepare the last and most important application. It is time to register the contract at the Land/Property registry (so called Zemljiška knjiga) at the Court of Justice of Republic of Slovenia.
- It takes a few months usually, that the new owner receive a certificate of the ownership of the purchased RE. However, it is assumed that the buyer of RE can freely and fully enjoy the RE with the day, when application for Zemljiška knjiga was filled.
Some types of RE requires special treatments and special procedures. While those cases are in minority, they are not relevant at this point and we are not going to give them any further attention.
What are the whole costs? How much has to be paid additionally during the procedure?
During the procedure of “hunting” and purchasing of RE, some costs will appear. Most notably are taxes, stamp duties and agency fee.
Services of the Public Notary Office are regulated by the law.
The cost for preparing the contract of purchasing RE depends on the value of the purchased RE. The expected cost will be in a range from 104 € (contract value up to 9.180 €) to 861 € (contract value more then 688.500 €) for the contract in a specific notary record form. That cost could be cut off by 50%, when the form of the contract could be a simpler one.
The simpler form of the contract for purchasing the RE can be provided also by private law office. The price for that service should be a bit more expensive then the one from the PNO.
At the PNO the authentication of the signatures on the contract and citizenship of the buyer will be done. The cost will not be higher than 69 € (per person/signature).
The application form for Zemljiška knjiga can be also prepared by the PNO. Cost, together with the stamp duty, will be somewhere between 100 and 200 € (for values between 70.000 € to 500.000 €).
This service can also be provided by the private law office, but again, you can expect a bit higher price.
Price list of PNO services can be found here (unfortunately in Slovene language only): http://www.uradni-list.si/files/RS_-2008-094-03968-OB~P002-0000.PDF).
The RE agency can offer two main service packages:
– intercession between two parties,
– and/or representing only one of them.
While the agency fee for the intercession is restricted by law and could not be higher then 4% (+20% VAT) of the value of the purchased RE, an agency fee for representing only one party (in the case) is not upward limited.
Despite which service package (intercession or representation) is chosen, the RE agent is obliged to care for both parties. However, there are significant differences of what can the RE agent do for his client.
A usual RE agency service package is pretty much standardized and it will provide all the necessary works for purchasing the desired RE, including: general introduction into the RE market in Slovenia, preparing a list of interesting RE, organizing to see them, helping through the process of the bargaining and conducting the whole “paper works”, etc. There are some minor deviations between the RE agencies, but in general, the service packages among the agencies are quite the same. (The main difference you will find will be in so called “human factor”.)
Taxes, NPO services, services of the private law offices and stamp duties are not included in the price of agency fee.
The third and most important group of additional expenses (through the process of purchasing) are taxes. However, those costs do not concern the buyer directly, but the owner (seller) only. He is the one who is obliged to pay taxes for the transaction. Still, the law allows, that both parties in the process can agree differently.
When the contract of purchasing RE is signed and deposit (10% of the value) is paid, the seller (owner) has 14 days to report the contract to the Tax Administration. TA will charge a “tax for RE transactions” with 2% of the value of the RE, but only, if RE is not new one or the seller (owner) is not registered as a company. In cases, when the chosen RE is a new one, or the owner is registered company, VAT (value added tax) will be charged by the normal rate of 20%. A lower VAT rate (8,5%) will be charged when residential RE is a subject of transaction. (But only, if the apartment is not bigger than 120 sqm or the house has no more than 250 sqm.)
Also “the capital gain tax” could be charged by TA. These are the cases when the owner does not posses the purchased RE for at least 20 years or more. The rate scale is selective in dawn-falling (depending on the years of ownership).
Author: SIBIZ d.o.o. all rights reserved