Slovenian Constitution in Article 68 says “that foreigner can get ownership rights for real estate under conditions provided by law or a treaty ratified by the National Assembly”.
Since Slovenia entered EU in 2004, EU citizens may buy properties or real estates in Slovenia without restrictions. Here are some basic rules for buying a property depending on where you come from:
- As mentioned, members of the EU are allowed to purchase properties under the same conditions as Slovenian citizens;
- Iceland, Liechtenstein and Norway were granted the right to purchase properties without restrictions in the European Economic Areas Agreement;
- US citizens may purchase without restrictions due to the Treaty on Trade and Navigation;
- Swiss citizens may purchase real estate only if the buyers possess a valid Permit C, or permanent settlement permit;
- EU candidate countries may submit an application to the Ministry of Justice to request permission to purchase property in Slovenia;
- Other countries may acquire property in Slovenia only if they have a business registered in Slovenia, obtain Slovenian citizenship through marriage, or obtain property through inheritance, provided the condition of reciprocity is met.
Foreigners must be aware of the fact that in the case of certain countries, Slovenia applies the principle of reciprocity. This means that a citizen of a certain country may purchase a property here only as long as the legislation in his or her home country grants the right for Slovenian citizens to purchase a real estate property there (this is applicable for countries such as Montenegro, Albania or Macedonia).
LEGAL PROCESS OF BUYING A PROPERTY IN SLOVENIA
Anyone who wants to buy a property has to follow a very specific purchasing procedure:
- the seller is legally required to provide an actual land registry extract;
- in the situation in which the property is purchased in Slovenia through a bank mortgage, it is necessary to obtain from the bank that has approved the mortgage a declaration concerning the allowance of the respective credit/a deletion of mortgage at the moment when the debt is repaid;
- the notary public writes the contract, but it is strongly recommended to have the respective contract drafted by a specialized lawyer,
- both parties, represented by the seller and the buyer, sign the contract, and after signing the contract, the seller delivers a deposit;
- the seller must register with the competent tax authorities by filling an application for assessment of 2% tax on real estate sales within 15 days and must pay the tax within 30 days;
- when the Tax Administration confirms the payment of the tax, the seller has to provide a copy of the document to the Slovenian notary who is in charge with the property transaction;
- after the notary has obtained this document, the buyer may pay the rest of the price of the property transaction.
In the next step, the buyer is obliged to submit an application regarding the ownership of the property with the Land Registry. This is done in order to complete the ownership transfer of the real estate property and later for the new buyer to sign new utilities contracts.
The procedure of purchasing a property implies the payment of certain taxes. Although tax obligations are available for both the seller and the buyer, the buyer can be exempt from paying some taxes.
- The seller is required to pay a tax representing 2% of the value of the selling price of the respective property and a tax on capital gains if he/she is not eligible for exemption.
- Further on, if the property is categorized as new construction, the buyer must pay the value added tax (8,5% for apartments that have less than 120 sqm and houses with up to 250 sqm, and 20% for larger apartments and houses).
- After the purchase, the buyer becomes liable for the payment of the tax on property and the compensation for the use of building land (NUSZ).
- Besides that, the property transaction includes some other types of taxes: such as registration fee, which is applicable to both the seller and the buyer.
- Moreover, the buyer has to pay the notary fees.
REAL ESTATE AGENTS
Hiring a real estate agent in Slovenia is basically a mandatory procedure. He/she will be in charge of contacting the seller and present the buyer’s offer. Once the offer is accepted, the next step is to draft the sale-purchase contract. A proper contract has to include information regarding the rights and the obligations of the seller and the buyer, detailed information about the property, the value of the property and the procedures for completing the financial transactions. If applicable, the contract must contain information regarding mortgage.
As the last step the real estate agent needs to prepare a copy of the land registry entry, a community confirmation proving that no communal rights have been claimed against the property and an official evaluation in order to correctly pay the taxes. After all the documents are in order, the buyer needs to make the final payment to the seller.