In addition to the purchase price, selling real estate in Slovenia also brings tax liabilities to the seller. However, selling real estate does not always lead only to the obligation to pay real estate transfer tax. In certain cases, the sale of real estate also requires paying other taxes. What taxes are these and in which cases is the seller liable to pay them?
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Selling real estate and taxation
If selling a property is in your plan, be it an apartment, a house or a plot of land, learn what taxes and how much you will be required to pay. Real estate transfer is sometimes also not the only tax you have to pay. Also read what to do if you do not have a planning permission for the property you want to sell.
Real estate transfer tax
Real estate transfer tax is the primary tax you have to pay when selling real estate. Not only selling real estate but also some other types of transfer of ownership fall under real estate transactions.
The seller has to to file a return for the assessment of real estate transfer tax within 15 days after the conclusion of the sales contract. The tax rate is 2% of the base. The tax base is the sale price of the real estate, which must correspond to the market value.
Selling real estate and value added tax
In certain cases, real estate transactions are subject to value added tax (VAT). In this case, selling the real estate is not subject to real estate transfer tax. This applies to the selling of building land, buildings under construction or new constructions, the financial lease of new constructions and the establishment / transfer or termination of a building right, if it is performed by a VAT payer.
The sale of a property that was built before 30 June 1999 (before the introduction of VAT) and is still considered new because it has not yet been put on the market is an exception. In this case, the sale is subject to real estate transfer tax and not VAT.
Income tax on capital gains
When the owner – a natural person sells real estate acquired after 1 January 2002, he will also pay personal income tax on capital gains in the event of an established capital gain. In addition to the sale, they also tax the donation and exchange of real estate.
However, you do not pay personal income tax on capital gains in the case of:
- the sale of an apartment or dwelling house (with a maximum of two flats) in which the seller had registered residence and actually lived there for at least the last three years before the sale,
- selling real estate after 20 years of ownership,
- the sale of the property that you acquired before 1 January 2002.
The tax base represents the difference between the value of the property at the time of disposal and the value at the time of its acquisition, minus the standard costs associated with the acquisition and disposal.
The tax rate is 27.5%, but it decreases with each completed five years of ownership. After five years of ownership, it amounts to 20%. After ten years 15% and after 15 years 10%. You do not pay personal income tax on capital gains if the property was taken away from you. After 20 years of ownership, you do not pay personal income tax.
The tax payer has to submit the personal income tax return within 15 days from the day of selling real estate.
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Do you have additional questions about selling real estate? Do you plan to start a business in Slovenia? If you also need more details on business in Slovenia, send us an email to data@data.si. You can also call us on +386 1 6006 270/+386 1 6006 274 (our landline). You can also use our Viber/Whatsapp +386 40 530 718/+386 64 173 023. We are also available on skype data.business7.
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