[BUYING AND SELLING REAL ESTATE IN SLOVAKIA]
223
Typically, a buyer has to pay a certain portion of the purchase price from its own sources (the use of such financial resources is usually a condition precedent to drawing the loan). For large development projects banks usually require establishing a mortgage over the real property, shares in the buyer-legal entity as well as a pledge over all kinds of possible claims the buyer is expected to possess in the future in connection with the real property such as rent, insurance payment, etc. For special transactions, such as large individual properties or real property portfolios, a common alternative to a bank loan is the use of capital market products, for instance, bonds, receivables, or credit derivatives. X. Costs and Taxes The costs associated with the registration of the transfer are typically borne by the buyer. However, the seller usually has to bear the costs of deleting of existing mortgages (e.g., securing the seller’s debts) from the la nd register. The real property tax is a local tax the amount of which is determined by the respective local municipality for different types of land and premises. The real property tax is paid for a tax period of a calendar year in advance. The purchaser shall report the acquired real property within 31 January of the following calendar year. The tax is payable upon receipt of the decision of the local municipality containing the calculation of the tax (within 15 days of the decision becoming final). The transfer of real property may also involve many other tax aspects, particularly when a VAT regime applies. We strongly advise that tax advisors are involved in order to ensure that these aspects are dealt with comprehensively.
XI. Acquisitions Real property can be acquired by way of an asset or a share deal. In the case of a share deal, the legal entities used for these purposes are mostly organized as limited liability companies or joint stock companies. 1. Limited Liability Company – s.r.o. The most widely used legal form owing to its high flexibility, low capital requirement and relatively few obligations. a) Legal Entity • A legal entity acts autonomously, represented by executive director(s); • Independently subject to taxation; • The particular rights and
obligations of an s.r.o. exist autonomously from those of the shareholders and the executive directors; The company's statutory body is one or more executive directors. The executive directors act in all matters on behalf of the company in the way of acting that is registered in the Commercial Register. The Foundation Deed (the Memorandum of Association, see below) may state that the executive directors constitute a collective body. The internal restriction of the executive directors' powers is not effective against a third party. Under Slovak law, a violation of these duties by an executive director will not (alone) affect the validity of a contract with a third party,
•
ILN Real Estate Group – Buying and Selling Real Estate Series
Made with FlippingBook - professional solution for displaying marketing and sales documents online