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Feb 25, 2013

Buying costs are moderate in Slovenia


How high are realtors’ and lawyers’ fees in Slovenia? What about other property purchase costs?

Transaction Costs

Who Pays?
Registration Fees 0.01% - 0.50% buyer
Notary fees 0.01% - 0.40% (+ 20% VAT)
0.01% - 0.40% (+ 20% VAT)
buyer
seller
Real Estate Agent’s Fee 1 - 2% (+ 20% VAT)
1 - 2% (+ 20% VAT)
buyer
seller
Transfer Tax 2% buyer
Costs paid by buyer 3.222% - 5.38%
Costs paid by seller 1.212% - 2.88%
ROUNDTRIP TRANSACTION COSTS 4.434% - 8.26%
See Footnotes
Source: Global Property Guide

How difficult is the property purchase process in Slovenia?

Following accession to the EU in 2004, EU citizens may now buy properties in Slovenia without restrictions. However, there are special procedures pertaining to the acquisition of agricultural land applicable to all foreign nationals.

Foreigners have been able to buy property since February 2003, on a reciprocal basis. Reciprocity is a principle verified by the Ministry of Justice (MoJ) on the basis of the Law on Reciprocity (Official Gazette No 9/99), and any attempt by a non-EU citizen to buy property requires a new application for the establishment of reciprocity to the MoJ, accompanied by

  1. a notarized copy of passport;
  2. a statement of the purpose of acquiring property (primary residence, secondary residence, activity);
  3. a document containing details of the real estate issued by the Surveying and Mapping Authority;
  4. an administrative fee of SIT4,250 (1 Euro = 229 SIT).

Before purchasing property in Slovenia, the buyer should obtain a tax number and EMSO number (comparable to a social security number) from the local authority where the property is located. This takes about three days.

Even if the buyer has decided on a particularly property, hire a real estate agent. The status of Estate Agents (nepremicnine) is regulated by a new law (2003). Estate Agents must now be licensed and registered, and pass exams. In theory, the quality of their work is now insured.

The buyer’s agent will then contact the seller and present the buyer’s offer. If accepted, the realtor will arrange for a contract to be procured and translated. A 10% deposit is paid upon signing.

A title search is then conducted. The Land Registry in Slovenia employs a modernized system and performing due diligence can be a breeze, and may be accomplished in just two working days! Whether the buyer decides to do this personally or have the agent do it for him, make sure that all the documents get translated to avoid any pitfalls.

For the final process, the agent must prepare a new copy of the land registry entry, community confirmation that no communal rights are being claimed against the property, and an official evaluation for proper payment of taxes. When all this is in order, the buyer just has to settle the remaining balance with the seller.

It takes an average of 95 to 124 days to complete the five procedures needed to register a property in Slovenia.



Footnotes to Transaction Costs Table


The round trip transaction costs include all costs of buying and then re-selling a property – lawyers’ fees, notaries’ fees, registration fees, taxes, agents’ fees, etc.

Registration fees:
Registration fees include payments to the Land Registry and translation costs. These costs are minimal and are not expected to exceed 0.50% of property value. Land Registry registration fee is 0.5% of the property value with a maximum of €80 (SIT 19,000). Slovenian law requires translation of the purchase contract and other pertinent documents (by a court translator) to ensure that the buyer has full understanding of their contents.

Notary fees:
According to the Property Act, signatures on the registration clause must be verified by a notary public. Each party pays for their own notary. Notary fee is calculated based on the following schedule, plus 20% VAT.

NOTARY FEES

VALUE OF PROPERTY (€) Rate (including 20% VAT)
Up to €4,590  €5.51
€4,590 - €20,655 €16.52
€20,655 - €36,700 €27.54
€36,700 - €68,850 €44.06
€68,850 - €84,915 €55.08
Over €84,915 €82.62

Real Estate Agent’s Fee
Estate agent´s fees are controlled by law, and the permitted maximum is 4%, plus 20% VAT. It is usual practice for buyer and seller to equally split the bill.

Transfer Tax
Real estate transfer tax of 2% is charged for purchase of second-hand properties, otherwise, VAT is levied.

Value Added Tax (VAT)
Value Added Tax (VAT) of 8.5% is levied when selling a newly constructed or renovated residential apartment or building, otherwise 20% VAT is charged. Apartments intended for rental purposes are considered commercial properties and are subject to 20% VAT.
 

VAT is levied also in cases when the vendor is a company and registered under the VAT




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