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Last Updated: Apr 10, 2014




Slovenia’s property market is still in the doldrums, though house price-declines are slowing. The crisis is now concentrated in the capital, Ljubljana, where existing flat prices plunged by 12% (-12.9% in real terms) during 2013.

This is a dramatic contrast with the rest of Slovenia, where the price of existing flats rose by 3.3% (2.2% in real terms).  Slovakia's nationwide house price index fell by only 2% (-3% in real terms) in 2013, and during the fourth quarter of 2013 house prices rose nationally by 1%, or 1.1% when adjusted for inflation, based on figures from the Statistical Office of the Republic of Slovenia.  Existing dwelling prices fell by 2.9% in 2013 (-3.9% in real terms), but new-builds were nominally stable (- 1.1% in real terms).

Nationwide, dwelling transactions in Slovenia fell by around 29.1% from 6,226 in 2012 to 4,490 units in 2013.   According to the Bank of Slovenia, outstanding loans for house purchase rose by only 0.9% to €5.31 billion during the year to December 2013.

Although dwelling transactions dropped, the number of dwelling permits issued for residential building improved, increasing by 7.5% to 2,553 permits by end of 2013. The floor space of dwellings authorized also increased by 4.3% to 450,620 square metres (sq. m.).

slovenia house pricesThe economy is expected to contract in 2014 by 1.4%, due to weak demand, which is not favourable for the housing market. The economy is expected to slightly recover by about 0.9% in 2015.

Rents are going down. The recent credit rating cuts pushed up the price of mortgage loans, while the difficulties of the banking sector reduced the banks’ willingness to make loans for house-purchases.

Analysis of Slovenia Residential Property Market »


RENTAL YIELDS
Last Updated: Jul 08, 2014



The average price per square metre (sq.m.) of apartments in Ljubljana is around EUR 2,500. This means that a 60-sq. m. apartment costs around EUR 138,000 to buy, while a bigger 120-sq. m. apartment can cost as much as EUR 340,000.

The gross monthly rental income per sq. m. ranges from around EUR 9 to EUR 10.50. For property owners, this means that a 60-sq. m. apartment can earn around EUR 550 per month, while a 120- sq. m. apartment can earn around EUR 1,270 per month.

The gross rental yield for apartments in Ljubljana, i.e., the gross return on investment in an apartment if fully rented out, ranges from 4.37% to 4.84%.

Round trip transaction costs are low in Slovenia.  See our Property transaction costs analysis in Slovenia and Round-trip property transaction costs in Slovenia, compared to the rest of Europe.

Read Rental Yields  »



TAXES AND COSTS
Last Updated: Jul 17, 2014



Rental Income: Nonresident foreigners earning rental income are generally taxed at 25%. A standard deduction of 40% of gross income is available for all taxpayers earning rental income, for income-generating expenses.

Capital Gains: Capital gains realized from the sale of properties are taxed varying rates, depending on how long the owner held the property prior to the sale.

Inheritance: Inheritance of spouses and direct descendants are not taxed in Slovenia. Other heirs are liable to inheritance tax and the applicable progressive rates vary depending on the relationship between the donor and the recipient, and the value of the property.

Residents: Residents are taxed on their worldwide income at progressive rates, from 16% to 50% for 2014.

Read Taxes and Costs  »



BUYING GUIDE
Last Updated: Jul 18, 2014



Roundtrip transaction costs are around 4.434% to 8.26% of the property value. The 2% Transfer Tax is paid by the seller while the real estate agent’s fee at 4% (plus 20% VAT) is typically split between buyer and seller.

Read Buying Guide  »



LANDLORD AND TENANT
Last Updated: Sep 15, 2006



slovenia house for rentRent: Rent and rent increases can be freely negotiated but must be based on the market rate. In theory, rents must not be 50% higher than average rents in the same local municipality. In practice, this is not followed; landlords can draw contracts and change it as they wish.

Tenant Security: If the contract is for a definite period of time, the landlord has no obligation to renew the contract. If there has been no renewal 30 days before contract expiration, the tenant has to vacate the apartment at the day of expiration.

Read Landlord and Tenant  »



ECONOMIC GROWTH
Last Updated: Apr 10, 2014


2014: another year of economic contraction for Slovenia

slovenia GDP inflationSlovenia economy, which is export-dependent, has been sluggish since the beginning of the Euro zone crisis. The IMF projects that Slovenia's economy will contract about 1.4% in 2014, as weak domestic demand keeps slowing economic activity.  The "adjustments in the banking sector will likely continue to weigh on private sector", notes the European Bank for Reconstruction and Development (EBRD). Slovenia’s central bank expects a rather a lower contraction of about 0.7% in 2014.

The economy slightly recovered in 2010 and 2011 by 1.3% and 0.7%, respectively, after shrinking 7.9% during the financial crisis in 2009. However, in 2012 the economy shrunk 2.5%, followed by another 2.6% economic contraction in 2013.

Slovenia’s economic situation has been aggravated by political uncertainty. Prime Minister Janez Jansa was ousted by a no-confidence vote on February 28, 2013, amidst economic gloom, a banking crisis, and allegations of corruption.

He was replaced by centre-left opposition leader Alenka Bratusek, the first female premier of Slovenia. Her priorities are to “kick-start growth, balance public finances without hampering growth, protecting and developing the public sector and restoring people’s trust in the institutions of the state".  However, survival of her coalition government is seen as unlikely

Slovenia’s government deficit in 2013 amounted to €5.178 billion (US$ 7.09 billion) or 14.7% of GDP, according to Statistical Office of the Republic of Slovenia. The high deficit was due to capital injections into banks of about €3.633 billion (US$ 4.98 billion).

In 2014, the budget deficit should be 4.2% of GDP, still higher than the EU’s limit of 3%, according to Slovenia’s statistical office.  Public debt is expected to rise from 71.7% of GDP in 2013 to about 80.9% of GDP in 2014.

Unemployment rose to 10.1% in 2013, up from 8.9% in 2012. Inflation at 0.6% in March 2014, was much lower than the 2% recorded during the same period last year.

Slovenia, with a population of about 2 million people, joined the EU in 2004 and the euro in 2007.







  • Pro-landlord rental market
  • Low transaction costs
  • Strong post-transition economy
  • Low to moderate yields in Ljubljana
  • High rental income tax
  • Minor issues w/ ownership
RESIDENTIAL PROPERTY FACTS
Price (sq.m): €2,843 For a 120 sq. m. property, usually an apartment.
Rental Yield: 4.46% For a 120 sq. m. property, usually an apartment.
Rent/month: €1,268 For a 120 sq. m. property.
Income Tax: n.a. Assumptions: Owners are a non-resident couple drawing US$ / €1,500 per month in rent, with no other local income.
Roundtrip Cost: 6.92% The total cost of buying and then reselling an apartment. Includes:

* all transaction taxes and charges:
* lawyers' and notaries' fees
* agents' fees

Assumptions: The buyers are non-resident foreigners. The apartment cost US$250,00 / €250,000.
Cap Gains Tax: 10.00% Assumptions: The property was bought for US$250,000 / €250,000, and sold 10 years later, after a 100% appreciation.
Landlord and Tenant Law: Pro-Landlord Rating is based on a detailed study of each country’s law and practice.

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