The centre-left candidate Zoran Janković, a former major of Ljubljana, won a narrow victory in the Republic of Slovenia’s presidential elections on December 2011 for the Positive Slovenia party, but failed to be elected as prime minister. The new government was formed instead by a right-leaning coalition of five parties, led by Janez Janša, president of the second-placed Slovenian Democratic Party.
As a eurozone member, Slovenia's housing market is also suffering from the the euro’s crisis and possible eurozone recession. The housing market, after a rebound, is now rapidly cooling. The main driver of this renewed slowdown is the intrinsic fragility of the banking sector, exacerbated by the euro storm and the likely recession in 2012.
Though the house price index rose 2.13% during the year to the third quarter, according to the Statistical Office of Slovenia (SORS), dwelling prices in Slovenia moved on average 2.4% lower qoq during the third quarter. Transactions are stagnating as the economy worsens, and lending for house purchases are also rapidly slowing Newly built flat prices fell sharply, and newbuild sales went down significantly.
As a eurozone member, Slovenia's housing market is also suffering from the the euro’s crisis and possible eurozone recession. The housing market, after a rebound, is now rapidly cooling. The main driver of this renewed slowdown is the intrinsic fragility of the banking sector, exacerbated by the euro storm and the likely recession in 2012.Though the house price index rose 2.13% during the year to the third quarter, according to the Statistical Office of Slovenia (SORS), dwelling prices in Slovenia moved on average 2.4% lower qoq during the third quarter. Transactions are stagnating as the economy worsens, and lending for house purchases are also rapidly slowing Newly built flat prices fell sharply, and newbuild sales went down significantly.
Analysis of Slovenia Residential Property Market »
RENTAL YIELDS
Last Updated: Jul 20, 2011
Gross rental yields in Ljubljana range from around 4% to 4.6%. These are moderate to low yields, and reflect a downward trend in rents, rather than an increase in prices.
TAXES AND COSTS
Last Updated: Nov 02, 2011
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 tax is levied at a flat rate of 20%. The rate is reduced by 5 percentage points for every 5-year holding period, which effectively means that properties held for 20 years or more are exempt from capital gains taxation.
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 41%.
Capital Gains: Capital gains tax is levied at a flat rate of 20%. The rate is reduced by 5 percentage points for every 5-year holding period, which effectively means that properties held for 20 years or more are exempt from capital gains taxation.
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 41%.
BUYING GUIDE
Last Updated: Apr 10, 2007
Roundtrip transaction costs are around 6.8% - 7.7% 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.
Transaction costs for newly constructed or renovated residential apartment or building is substantially higher because of 8.5% VAT levied in lieu of transfer tax. New apartments intended for rental are considered commercial properties and are subject to 20% VAT.
Transaction costs for newly constructed or renovated residential apartment or building is substantially higher because of 8.5% VAT levied in lieu of transfer tax. New apartments intended for rental are considered commercial properties and are subject to 20% VAT.
LANDLORD AND TENANT
Last Updated: Sep 15, 2006
Rent: 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.
ECONOMIC GROWTH
Last Updated: Jan 06, 2012
Prices drop amid economic expansion
Slovenia, a small open economy within the euro area, was deeply affected by the global crisis due to its dependence on exports. As a result, the economy shrank 8.13% in 2009. However, it rebounded in 2010, growing by 1.21%. Consumer prices dropped 1.14% month-on-month in July, the steepest decline in 10 years. Annual inflation, on the other hand, stood at 0.93%.
Slovenia’s economy is forecast to grow 0.3% this year by the OECD; earlier forecasts of 2% growth this year have now been scaled back.
In July, Slovenia’s two largest banks, Nova Ljubljanska Banka (NLB) and Nova Kreditna Banka Maribor (NKBM) passed the EU-wide stress test. The NLB barely passed with a Core Tier 1 ratio of 5.3% in 2012 while the NKBM is adequately capitalized at 8%. The former was in the “danger zone” as its core capital ratio was close to the 5% benchmark under the adverse scenario.
Slovenia’s unemployment rate fell to 11.59% in May 2011 from 12.30% in January, but this is strongly up from 5.89% in 2009.
Slovenia’s economy is forecast to grow 0.3% this year by the OECD; earlier forecasts of 2% growth this year have now been scaled back.
In July, Slovenia’s two largest banks, Nova Ljubljanska Banka (NLB) and Nova Kreditna Banka Maribor (NKBM) passed the EU-wide stress test. The NLB barely passed with a Core Tier 1 ratio of 5.3% in 2012 while the NKBM is adequately capitalized at 8%. The former was in the “danger zone” as its core capital ratio was close to the 5% benchmark under the adverse scenario.
Slovenia’s unemployment rate fell to 11.59% in May 2011 from 12.30% in January, but this is strongly up from 5.89% in 2009.
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