Structures for investment include:
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Donation tax and inheritance tax were abolished from 1 January 2004. Real estate transfer tax was repealed from 1 January 2005.
Therefore, generally speaking, real estate owners in Slovakia are subject to income tax, real estate tax, and VAT. Real estate tax is “local” because it is set by the municipality and is charged to owner as at the first day of the calendar year.
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A VAT rate of 23% applies to real estate. A decreased 5% VAT rate applies to building or part of building, including building land under the building, if such building meets specific conditions concerning state supported rental housing.
Building or part of building, including building land under the building, are exempt from VAT, if the delivery takes place more than five years after the issue of the first occupancy permit or after five years from the date of first usage of the building or part of it or after 5 years after change of use following reconstruction with costs of at least 40% of value of the building before commencing the reconstruction works. However, the VAT payer can also opt for the transaction to be subject to VAT; this does not apply in the case of supply of a residential property, supply of an individual flat and supply of an individual apartment in a residential building. Flats and non-residential premises shall be deemed for the purpose of VAT exemption as parts of the property.
Land, other than building land, is always exempt from VAT.
VAT can be recovered if the VAT payer uses the real estate for taxable business purposes (but only to the extent that the real estate has been used for taxable business purposes).
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There is a fee of EUR100 for the registration of the new owner in the Land Register (EUR50 for registration by electronic means). This fee rises to EUR300 if the applicant applies for an accelerated registration which is then carried out within 15 days (EUR150 for registration by electronic means). In addition, all of these fees are reduced by EUR15 if a notice of an intended registration is filed. The notarial fee for the verification of a signature is EUR4 plus VAT per one signature. Responsibility for paying these costs depends on what the parties have agreed.
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Real estate tax consists of taxes on land, buildings, flats and non-residential premises. The tax on land is imposed on plots recorded in the real estate cadastre and is payable (subject to certain statutory conditions) by the person who owns, uses or rents the property.
The annual tax rate for land is 0.25% of the land value. This can be varied by the tax administration authority (ie the relevant municipality).
The basis for tax on arable land, hop yards, vineyards, meadows, pastures and orchards is the land value. This is defined as the size in square metres multiplied by the value per square metre. This is also the basis for calculating tax on commercial forests and ponds used for fish farming, as well as for gardens, built-up areas, courtyards and other grounds.
The building tax rate is EUR0.033 per each even initiated square metre of built-up area.
The annual tax rate on buildings can be increased or decreased by the relevant tax administration authority. They can also levy a supplement for every floor situated above first floor level, although the maximum amount of the supplement shall not exceed EUR0.33 per each additional floor except for the first (ground) floor.
The tax administration authority sets different annual tax rates for particular types of buildings. The maximum annual tax rate on any class of building is 10 times the lowest annual tax rate on buildings set by the tax administration authority.
The annual tax rate on flats and non-residential premises is EUR0.033 per each even initiated square metre of the floor area of the flat or non-residential premises. This can be varied by the appropriate tax administration authority. The maximum annual tax rate on flats and non-residential premises is 10 times the lowest annual tax rate on flats and non-residential premises set by the tax administration authority.
Rates in the Slovak Republic vary according to the type of real estate and its locality. Bratislava, for example, has generally the highest rates of taxation per square metre
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Not applicable.
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Income from leasing or subleasing the real estate. Income of the use of real estate depending on the type and business scheme.
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Since a partnership is considered to be transparent for income tax purposes, any profits generated by the partnership are deemed to be the profits of each individual partner and are therefore treated as personal income.
Tax is payable on rental income, less any tax-deductible expenses (for example depreciation, administrative costs and financial charges).
The tax rate is 19% (but 25% on that part of the income which exceeds 176.8 times the current subsistence level as prescribed by the government). Where the partner is a legal entity, a tax rate of 21% applies; 10% for a taxpayer who has earned income (revenues) for the tax period not exceeding EUR100,000 and 24% for a taxpayer who has earned income (revenues) for the tax period exceeding EUR5,000,000.
Tax is payable on rental income, less tax deductible expenses (for example depreciation, administrative costs and financial charges).
The corporate income tax rate is 21%. The corporate income tax rate is 10% for a taxpayer who has earned income (revenues) for the tax period not exceeding EUR100,000 and 24% for a taxpayer who has earned income (revenues) for the tax period exceeding EUR 5,000,000.
The tax base can be reduced by what is known as “book depreciation”.
With the exception of land, most tangible assets are depreciable. The basis for depreciation is generally the original acquisition cost, and the depreciation rate is usually based on the normal useful life of the asset. Tax depreciation rate is specific for different type of assets and may differ from accounting depreciations. Tax depreciations are deductible up to the amount of received rent, in case of real estate used for lease.
Slovak tax legislation also allows for “interruption” of tax depreciation.
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If the foreign investor has invested through a Slovak partnership (which is treated as transparent for income tax purposes) income will be taxed as part of the partner's income.
Income can be transferred by the distribution of dividends to shareholders. As of 1 January 2017, dividends paid to individuals or paid to legal entity that are tax residents of non-cooperating states are subject to income tax, in cases when the profit shares are paid for the tax period starting as of 1 January 2017 and later. The tax rate of 7% or 35% depends on to whom the dividends are paid. The rate also depends on the location (non-cooperating state, other state or the Slovak Republic) of the entity paying the dividends or receiving the dividends.
A dividend having source in a state regarded as non-cooperating state is taxed with a tax rate of 35%. Dividends paid to foreign taxpayers of non-cooperating states are also subject to taxation. This dividend will be paid to the foreign shareholder subject to withholding tax of 35%.
If the recipient of the dividends is a tax resident of a state with which the Slovak Republic has concluded a Double Tax Avoidance Treaty or a Treaty on Exchange of Information for Tax (contracting state), it takes precedence over the Income Tax Act, thus withholding tax with beneficial rate may be applicable. The right to taxation of dividends is determined on the basis of the provisions of the international treaty.
Under double-tax treaties dividends may be taxed either in the country where the company is based or in the shareholder's country of residence.
Where a Slovak company pays out the dividends (for the tax period starting as of 1 January 2017) to individuals who are residents of another Member State or contracting state, the dividends will be taxed in accordance with the specific Double Tax Avoidance Treaty.
Profit shares paid between legal entities except from or to non-cooperating states are exempted from the income tax. That means that dividends paid by a Slovak company to Slovak legal entities or to companies from a cooperating state shall not be subject to income tax in Slovakia. Similarly, dividends are not taxed in Slovakia, when Slovak companies receive the dividends from the company from a cooperating state or from Slovakia.
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No.
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If the shareholders or partners or owners are natural persons compulsorily health insured in Slovakia, they are obliged to pay health insurance contributions to the respective health insurance company also from the income received from an investment in real estate. This does not concern income from lease of real estate excluded from business, tax exempted income and dividends (except for tax years between 2011 and 2016).
The obligation to pay health insurance contributions in Slovakia does not apply to foreign shareholders or partners who are not health insured in Slovakia.
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Real Estate Transfer Tax was abolished from 1 January 2005. No transfer tax therefore applies to the purchase of a real estate asset. Income gained from the sale of real estate is subject to income tax and, in some cases, to VAT. In the case of the sale of real estate by a natural person, Slovak tax legislation provides for certain income tax-exemptions (eg if the real estate was not part of a business or 5 years after excluding it from business). Costs of acquisition are generally tax deductible at sale or with depreciations.
Last modified 13 Mar 2025
There is a fee of EUR100 for the registration of the new owner in the Land Register (EUR50 for registration by electronic means). This fee rises to EUR300 if the applicant applies for an accelerated registration which is then carried out within 15 days (EUR150 for registration by electronic means). In addition, all of these fees are reduced by EUR15 if a notice of an intended registration is filed. The notarial fee for the verification of a signature is EUR4 plus VAT per one signature. Responsibility for paying these costs depends on what the parties have agreed.
Last modified 13 Mar 2025
How can investment in real estate by an individual/organization/company be set up?
Structures for investment include:
Last modified 13 Mar 2025