Our smart guide for buyers and investors with steps and costs.

Foreigners are able to buy a property in Slovenia since 2004, on a reciprocal basis. This means if a Slovenian citizen can buy real estate (a house, an apartment, a land, a property etc.) in a specific foreign country, a citizen of that country can also buy real estate in Slovenia if it is for sale.

How to purchase real estate in Slovenia? To purchase a property is a bold move, to do this in a foreign country can be scary. Here some assistance for this important decision. Often we get these questions from our customers: “How do I buy that property in Slovenia?”, “How much will this process cost?” and “How long will it take?” In this article we will provide an all-encompassing rundown of the question. We’ll explain the process, how to make sure what you are buying and the legal aspects before signing the title deed, taxes and costs involved in the purchase. We cover also the yearly maintenance costs and taxes once the property has been bought.

We will provide practical suggestions if you’re new to property purchase, new to Slovenia or both. However, as every case is different, we strongly advise you to contact a local lawyer who can assist you throughout the process, and who will ensure that your money and your rights are fully protected.

---

Step 1 - Assess Your Budget: What is Possible for me? To be able to select a property you need to assess your budget. You can either buy your property outright from funds you have or with the assistance of external funds: usually a real estate mortgage provided by a bank. Then, to get the asking price of the properties, you should deduct from your budget a sum to fix small things, say at least 10.000€. To initiate new design projects to ameliorate or personalize the property is another story, you can check the article about renovation written by our specialist in Ibiza but can be applied 1 to 1 for Slovenia.

Maybe you will move some or all of your belongings to your new property in Slovenia. In this case you will deduct these costs from your buying budget too. And finally, there are the process costs we discuss in this article. Armed with your resulting budget you are good to start the journey!

Historic facades in the city center of Maribor, second biggest city in Slovenia.

Step 2 - Select your property

For most buyers this is the fun part. We suggest you visit in person the properties at least twice. Consider that there are properties more adapted if you want to rent the property in the Summer or in the Winter to short-term tourists stays. See the properties PURE Real Estate has currently on offer in Europe.

---

Step 3 - Checks

Once your interest in a property is solid, you will draft-in a local lawyer familiar with Slovenian real estate law.

Ask your real estate agent the paperwork of the property:

- a recent extract of the National Property Registry

- a recent extract of the Cadaster

- copy of the last paid property tax

- copy of utility bills : electricity and water to confirm who uses the property and its costs

- for a hotel and for a restaurant : licenses Depending on the requirements of the seller, your real estate agent can ask you to issue a Letter Of Intent (LOI) to allow him to hand-out a copy of the documents. This LOI can be a short and simple email mentioning: the property name, the agent who presented the property to you and your interest to purchase the property in the foreseeable future. In any case, once you have got the documents, you will give these to your lawyer who will check the papers in detail and certify their validity. You can also ask your lawyer to contact the lawyer of the seller, requesting the legal documents of the property. Your lawyer will check: - the title deeds of the seller to confirm, among other things, ownership, charges, and that the property is accurately described. - that the property abides to the planning law, as well as any extensions or amendments built after the original building license.

- any registered debts, charges, liens and encumbrances in the land registry, and the situation of the property with respect to property tax and community fees, and any other running expenses.

- that the seller has presented the last and current receipt for the council tax.

---

Step 4 - Place Your Offer Once your lawyer agrees that your chosen property is legit, you can place an offer towards the asking price, conditions subject to a contract. Fingers crossed the seller will accept your offer!

---

Step 5 - Raising a private contract It is now the time to determine the terms of payment. Your lawyer will raise a private contract that will be signed with the seller. At that time there will be a deposit paid by the buyer. The amount paid upon signing a private purchase contract is normally 10% of the sales price. For this deposit it can happen to use a bank´s escrow account or accounts of the lawyer or of the notary.

The seller must register within 15 days with the competent tax authorities by filling an application for payment of 2% tax on real estate sales price and must pay the tax within 30 days;

Once the Tax Administration confirms the payment of the tax, the seller has to provide a copy of the document to the Notary. Once the notary has obtained this document, the buyer may pay the rest of the price of the property transaction to the Notary escrow account. In Slovenia the remaining final purchase price is paid to the Notary´s account from your Slovenian bank account. It is important that the private purchase and sales contract includes all necessary provisions to preserve your rights as the buyer. The contract normally provides for a term between one to three months for completion and signing of the public deed in a Public Notary, where the balance of the purchase is paid and the vacant possession of the unencumbered property is granted. The payment of taxes and expenses of the purchase are normally done by the Notary´s, who will take care of these payments at the moment of completion of the purchase. Once agreed with you and your lawyer, your contract proposal is sent to the seller´s lawyer for review. There can be some changes requested by the seller, which will be handled by your lawyer. Finally, once the selling party agrees, you have a deal!

---

Step 6 - Banking : Opening a Bank Account The property can be purchased through a bank mortgage. It is necessary to obtain from the bank that has approved your mortgage a declaration concerning the allowance of the respective credit. Also, at the moment of purchase, this bank will request a certification of deletion of any former mortgage on that property.

You the buyer can open a bank account in Slovenia, where you will send the funds for the purchase. Funds coming directly from Banks in Europe are also possible. Note that, as per the European anti-money-laundering process, your bank, your lawyer and the Notary all have a legal requirement to check the origins of the funds for any real estate purchase. A process also known as KYC "know your customer".

---

Step 7 - Finally: meeting at the Notary for the Sales!

Change of Ownership

After a successful signature and payment meeting at the Notary, your lawyer will follow-up to get the owner change registered. Your lawyer will submit an application regarding the ownership of the property with the Land Registry. This is done in order to complete the ownership transfer of the real estate property. With the signed Notary deed, you can close new utilities contracts for the supply of gas, water, electricity, internet and so on. In order to get registration of the public purchase deed, all relevant tax forms must be completed and paid into the Slovenian Tax Authorities.

Here a run-down of the Tax implications and costs for the Buyer :

In the case of a New Construction VAT – Value Added Tax For a new new construction, the buyer will pay VAT with a rate of 8.5% for apartments that have a size of up to 120 square meters and houses up to 250 square meters square; The VAT rate of 20% is applied for apartments larger than 120 meters and houses larger than 350 meters. Property Registration Fee

The property registration fee is a tax that is applicable to both the seller and buyer, and which is imposed on each party at a rate of 0.01% - 0.5% of the selling price of the property.

Notary fees

The buyer has to pay the notary fees, which are commonly imposed at a rate of 0.01% to 0.4%. This will depend on the value of the purchase and the number of pages and complexity of the notarial deed.

Seller´s Taxes

As already mentioned above, the seller is required to pay a tax of 2% of the selling price plus his part of the Registration fee of 0.01% - 0.5% of the selling price. The seller has also to pay taxes on capital gains, when he or she is not eligible for exemption.

---

Step 9 - Yearly maintenance costs and taxes The final step will be to change the utility contracts for services and supplies of the property to your name, as well as the property tax, setting up direct debits of all payments drawn to your Slovenian bank account. Property Taxes

After purchasing the property in Slovenia, the buyer becomes liable for the payment of the Property Tax , and the compensation for the use of building land (NUSZ). The rates depend on the value of your property. These taxes are paid in one annual payment.

Property Insurances Property owners in Slovenia are legally obligated to have home insurance to cover the value of the property. Life insurance is not mandatory but many lenders require borrowers to take out life insurance policies sufficient to pay off the outstanding mortgage balance.

You may also want to consider getting mortgage insurance, which would protect you if you can’t make mortgage payments. Having an active life insurance policy and a mortgage insurance policy before applying for a mortgage may provide access to better interest rates.

City center of Ljubljana, capital city of Slovenia.

The key takeaways are: - Proper legal documentation is key to a successful property purchase in Slovenia

- there are mandatory taxes to buy and keep a property in Slovenia

You should now be ready to confidently go about buying a property in Slovenia. We wish all buyers a smooth process and afterwards lots of happy hours enjoying Ibiza in their new property!

Feel free to contact us for any question we are happy to help. Tip: visit the website of the Slovenian Tourist Board for many useful information about Slovenia!

---

Disclaimer - No Investment Advice

Please make sure that you note the following important information: PURE Real Estate is not an investment advisor. We are not regulated by the Financial Services Authority. Our articles and content are a discussion forum about real estate. We access, publish and discuss public information. This is not a place for the giving or receiving of financial advice, advice concerning investment decisions or tax or legal advice. No content in our articles constitutes - or should be understood as constituting - a recommendation to enter in any financial transactions or to engage in any of the investment strategies presented in our content. For more information about PURE Real Estate please visit our website: www.pureibiza.com