suffered somewhat on the international scene from its parting from the
on 1st January 1993 as the famous city of
Prague took the headlines with
its tourist, business and property investment attractions. Since then,
the country has established itself in the international community and as
a stable economic force in the region.
Bratislava, has been the focus of much development and has managed
to attract the attention of the international business community, but
the advantages of buying property in
Slovakia extend far beyond the
city. There are established resorts for summer and winter activities in
the High Tatra Mountains, and although
Slovakia is landlocked, there are
plenty of lakes and rivers to provide aquatic adventure.
The development of Slovakia as an independent force has seen it become a
member of NATO and the OECD, and in May 2004 it joined the European
Union as a full member. On 1st January 2008,
Slovakia formally joined
the Eurozone, replacing all currency with the Euro.
Slovakia and the EU includes links to Slovak government sites and
Slovakia is dominated
by the mountainous terrain of the Carpathian Mountains, which stretch
right across the northern half of the country. Among these peaks are the
national parks of the
High and the Low Tatra Mountains, which give the country some of the
leisure destinations used by Slovaks for holidays, and are now coming to
the attention of the international tourist community. This, in turn, is
leading the overseas property market to the region, and many people are
now investing in some of the off-plan and mid-construction properties
that are on the market.
High Tatras offer skiing for a good winter season, as well as a
well-developed range of summer activities for outdoor enthusiasts.
Walking and climbing are ideal in the mountains, but there are more
mountain bike, paragliding and paramotor facilities available all the
time. In mountains like the Tatras, this is an ideal activity given the
ruggedness of the terrain and the relative lack of urban development.
The buying process:
Buying property in
Slovakia is a simple and
the process even for overseas buyers is easy to understand and complete.
Once you have found the property that you want to buy, the first stage
is to make an offer and have it accepted. Once your offer has been
accepted, a 10 per cent deposit is due from you to secure the property,
take it off the market and allow the legal processes to begin.
You need to appoint a good English
speaking lawyer who is experienced in representing foreign buyers.
lawyer will prepare an official pre-contract agreement which needs
to be signed by both parties. This sets out the terms of the deal, as
well as locking both the buyer and seller into the deal. Should you
change you mind about buying after this, you will have to pay any
agent’s costs incurred as a penalty, which will be deducted from your
deposit. If the seller pulls out of the deal, they must return your full
deposit and cover any agent’s fees incurred.
A surveyor’s report is arranged and you should make sure you have the
survey carried out by an independent surveyor and sent to the solicitor
in order that the sales contract can be compiled. All of the
documentation should be translated into English to make sure you know
what you are buying ahead of signing.
For legal certainty, buyer
should never pay cash before the transfer of property ownership is
Once both parties are happy with this contract, it is signed and the
remaining money paid over to the vendor. Before becoming the full and
legal owner of the property, the buyer must register the deal with the
Kataster, a process that takes around four weeks.
Mortgages for foreigners
are available in Slovakia. Terms and conditions are pretty much the same
as European standard and Slovak banks have no problem with lending money
to foreign investors. The application requires documentation such as
your passport, proof of address, six months of bank statements and a
proof of income and employment.
Usually, the bank lends
percent of the property’s market price and the interest
rates are around 5-7%. Some buyers use to purchase real estate mortgage
financing and as security for loan they use the property itself.
Terms are quite
standard, and Slovakian banks will lend to a wide range of foreign
investors. All you need to apply are documentation such as your
passport, proof of address, six months of bank statements and a proof of
income and employment. Loans are usually granted for up to 85 per cent
of the purchase price or property value, with interest rates starting at
3.55 per cent.
Many buyers prefer to finance their property from their country of
origin by re-mortgaging an existing property in order to raise the funds
for their overseas purchase. This has the advantage of keeping
transactions in the currency of your native currency and allowing you to
track economic developments more easily, but you may at times lose out
on lower interest rates in Europe. The advice of an independent
financial adviser who specialises in overseas
property can be invaluable in deciding how to pay for your property
Fees and other Costs:
than the property price itself the fees and taxes are relatively low:
- Expenditures on sales contract
may vary according to which lawyer or agent you hire, generally
around 500-600 EUR.
- Administrative fees for
cadastral office (application for entry into the cadastre, extract
from the property ownership document) 300 EUR
- Registration with tax
authorities + local taxes – 100 EUR per year
- Property tax and other small
taxes – 30 EUR per year
- Property sold within five
years after construction is subject to 19% VAT.
buyer plans to let the property, he/she will need to allow for the costs
of a managing agent. Buy-to-let management can cost about 200 EUR
per year plus 19% tax on rental profits. At resorts, the property
management prices vary a lot.
is no property transfer tax in
Slovakia. Therefore the purchase of the
property is not financially burdened, but there is the income tax of
19%. The tax liability is calculated as the difference between the
acquisition property price and the selling price. The Income Tax Act,
however, allows many options where the seller is not required to pay tax
or the tax base can be reduced (for example, permanent residence in the
property for more than 2 years).