Karanovic & Partners
Can anyone (including foreigners) own and occupy real estate in your jurisdiction (including shares in property owning companies)? Are there any restrictions?
Citizens of and
legal entities from EU, OECD and EFTA member countries can own real estate in
Slovenia without restrictions. Citizens of and legal entities from EU candidate
countries (Albania, North Macedonia, Montenegro, Serbia) can acquire real
estate by first obtaining a decision on establishing the reciprocity between Slovenia
and the respective foreign country. Citizens of and legal entities from all
other countries can only inherit real estate in Slovenia, under the condition
of reciprocity, but they cannot acquire real estate on any other legal bases
(e.g. contract). No restrictions apply for holding shares in property owning
Are there restrictions on lending for the purchase of real estate by foreign companies? If so briefly give an outline?
There are no legal restrictions for foreign companies to obtain lending for the purpose of purchasing real estate. Nevertheless, the banks may refuse to grant loans to foreign companies if restrictions in relation to acquiring of ownership described in the previous paragraph apply or if the countries of their registered seat are deemed as “high-risk” countries under the Slovenian AML laws. Such companies may be subject to special procedures and following an individual assessment the bank may reject the financing.
Please provide a short summary of the fees and costs (including tax) relating to buying real estate in your jurisdiction.
The seller shall pay real estate transfer tax (2% of purchase price), except if the sale is subject to value added tax (VAT) at the rate of 22% or 9.5 %. Sale of real estate prior to its first occupation or before the expiration of 2 years from the first occupancy, and of building land is subject to VAT.
The seller (being individual) shall pay the income tax on capital gains. The tax base is difference between the disposal value and acquiring value of real estate. The tax rate decreases every five years (after five years the rate is 20%, after ten years 15%, after fifteen years 10%), and after 20 years of ownership the seller is tax exempted.
The amount of court fees for the registration of ownership in the land register depends on the value of the real estate and ranges between 5 to 5.000 EUR.
Are there taxes applicable to owning real estate and can the burden of the taxes be passed to someone else (e.g. a tenant or an occupier - not being the owner)?
The owner of real estate is
obliged to pay property tax unless the owner or his family members reside in
the property and it does not exceed 160m2. The tax cannot be passed
to another person and it depends on the value and type of the property.
Charge for the use of building land is charged to the direct user of the property (owner, tenant, holder of a specially protected tenancy). The amount determined by municipalities is calculated based on the size of the vacant building land or, in case of a developed building land, the residential/business floor area.
Are there tax breaks or other incentives for foreigners to buy real estate in your jurisdiction? If so what are they?
There are no special tax breaks or other incentives for foreigners to buy real estate.
How is the ownership of Real Estate evidenced in your jurisdiction?
Ownership of real estate is evidenced in the Slovenian land register, which is managed by local courts (Slov. okrajna sodišča), responsible also for deciding on entries in the land register. The land register is publicly available in electronic form and contains information on rights and legal facts relating to immovable properties, such as ownership rights, encumbrances (mortgages, easements, etc.) and notices on pending actions (Slov. plombe). An entry in the land register is required for the acquisition of an ownership right through a legal transaction and it is effective as of the date of proposal for registration of title to land.
Is it possible to keep the identity of owners of real estate confidential in your jurisdiction?
No, there is no possibility to keep the identity of real estate owners confidential. When a company acts as a real estate owner, the company name, business seat and registration number are evident from the land register, together with information on the ownership share, possible encumbrances, and notices of pending action. If the owner is an individual, their name, surname, permanent address, and only the first seven numbers of their personal identification number (Slov. EMŠO) constituting their birthdate are evident, whereby the last six numbers of EMŠO are hidden.