[BUYING AND SELLING REAL ESTATE IN SLOVAKIA]
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Finally, owing to the historical developments, especially agricultural/forest lands are quite often owned or co-owned by so-called “unidentified owners,” i.e. persons who are either not sufficiently identified, deceased, or not known at all. The acquisition of such lands may require tracking down the current successors in ownership (heirs) and/or liaising with the competent authorities (e.g. Slovak Land Fund) that represent such unidentified owners. VII. Agents The buyer or seller can both use the services of a real property agent. Currently there are several renowned firms on the market providing services for the intermediation of retail premises and industrial areas. The agent commission is determined by agreement of the parties without specific limitations (except for general requirement to adherence to good morals). Caution is recommended when using local agents as the legal-technical quality of the documents used by them is generally not at a level ensuring clear distribution of rights and obligations among the seller, buyer, and the agent in case an issue should arise. VIII. Donations Real property can be donated by means of a donation agreement. Please note that given the specific nature of the donation, the return of a gift can be demanded only if the beneficiary commits a gross violation of good morals against the donor or the members of their family. IX. Financing The usual way of financing real property is a bank loan/mortgage which is mostly connected with insisting on collaterals by the banks. Typically, the banks do not provide 100%
coverage (in any case in the area of mortgages taken by individuals) and a buyer has to pay a certain portion of the purchase price from their own sources (the use of such financial resources is usually a condition precedent to drawing the loan). For large development projects banks usually require multiple security by establishing a pledge over the real property, shares in the buyer-legal entity as well as a pledge over receivables (both current and future ones). 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 must bear the costs of deleting of existing mortgages (e.g., securing the seller’s debts) from the land register. There is no real property transfer tax, i.e. specific tax applying on transfers of real property, currently applied in Slovakia. However, the transfer of real property may involve other tax aspects, particularly when a VAT regime applies. Whether a taxpayer's income from the sale of real property is taxable depends on an assessment of the conditions for exemption under the applicable provisions of the legislation. The real property tax, i.e. tax imposed on owners of the real property, 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
ILN Real Estate Group – Buying and Selling Real Estate Series
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