Lawyer prepares the sale and purchase agreement
Agency: Lawyer
It is a common practice to hire a lawyer to carry out all due diligence and prepare the sale and purchase agreement of a commercial property transfer between two local companies in Slovenia.
Time and cost: 1 day, EUR 1,500 (Between EUR 1,000 and EUR 2,000.)
Obtain a land registry extract from the Land Registry
Agency: Land Registry
A land registry extract is commonly requested by the seller from the Land Registry as proof of ownership. Information regarding potential encumbrances on the property are a vital part thereof. Most real estate information is available online, therefore it is obtained immediately in the form of a .pdf file and free of charge. In rare instances, however, relevant information has to be physically sought out, thereby taking a bit longer as well as being associated with additional (administrative) costs.
Time and cost: Less than 1 day (online), when obtained online.
Seller presents a tax declaration to the Tax Authority, and the land tax is assessed
Agency: Financial Administration of the Republic of Slovenia (FURS) http://www.fu.gov.si/en/
The seller is principally required to make a land tax declaration to the competent department of the Tax Administration of the Republic of Slovenia within 15 days after the day the purchase agreement was concluded. The Tax Administration is required to assess the land tax within 30 days after the tax declaration was made. The documentation shall include: Filled-in tax declaration Proof of ownership (e.g. land registry extract obtained in Procedure 1) Basis for the transfer of real estate (e.g. contract) For companies acting as buyer – copy of the court registry entry.
Time and cost: 16 days, no charge
Obtain a certificate of land use at the Municipality
Agency: Municipality
According to Art. 38 of the Land Registry Act, a certificate of land use must be attached to the sale/purchase agreement for the notary to authenticate the signature.
This certificate provides information on the classification of the land per the zoning act, on the restrictions on that land in regard to utilities, and whether the municipality has any restriction on that particular land.
Time and cost: 7 days, EUR 22.7
Payment and procedure of the real estate transfer tax or VAT tax at the Financial Administration Office
Agency: Financial Administration of the Republic of Slovenia (FURS) http://www.fu.gov.si/en/
The VAT does not have to be paid if the transaction of real estate is taxed by Real Estate Transfer Tax. VAT is obligatory only for new real estate. The Real Estate Transfer Tax Procedure is as follows: The taxpayer has to insert the tax declaration within 15 days at the Tax Authority, after the deed of sale is signed.
The Tax Authority has to assess the real estate transfer tax within 30 days after receiving the declaration. When the real estate transfer tax is assessed on the basis of the selling price, the tax must be paid at the competent Financial Administration Office within 30 days after the receipt of the decision on tax assessment.
The Act Amending the Implementation of the Republic of Slovenia Budget for 2018 and 2019, according to which, the VAT rate for the transfer of property (obligatory for new real estate) is charged and paid the same as on the basis of Implementation of the Republic of Slovenia’s Budget for 2017 and 2018, at the general rate of 22% of the tax base, except the transfer of apartments, residential and other buildings for permanent living and other parts of buildings as part of social policy, renovation and repair, which is 9,5%.
Time and cost: 1 day, EUR 21,867.74 (2% of property price as transfer tax)
Certification of signatures and submit proposal to Land Registry
Agency: Notary
If the third party wishes to enter his/her right in the land register, the signature on the contract will have to be verified in front of the Notary.The Agency/ Authority in charge of certification of signature is the Notary Public, while the proposal to Land Registry can be submitted by the Notary to the Land Registry.
Time and cost: 1 day, EUR 100
Notary fees for the land registry case are (in Euros) following the fee schedule:
- For a contract value under EUR 4,590, the fee is EUR 5 (+ VAT)
- From EUR 4,590, the fee is EUR 14 (+ VAT)
- From EUR 20,655, the fee is EUR 23 (+ VAT)
- From EUR 68,850, the fee is EUR 46 (+ VAT)
- From EUR 150,000, the fee is EUR 56 (+ VAT)
- From EUR 200,000, the fee is EUR 66 (+ VAT)
- From EUR 250,000, the fee is EUR 76 (+ VAT)
- From EUR 300,000, the fee is EUR 86 (+ VAT)
- From EUR 350,000, the fee is EUR 96 (+ VAT)
- From EUR 400,000, the fee is EUR 100 (+ VAT)
Entry of the proposal by the Land Registry
Agency: Land Registry (Local court)
The land registry court (Local court) initiates the registration process for the entry of title in the land register, on the basis of the land registry proposal. The amendments to the Land Registry Act adopted on 27 March 2009 and implemented on 1 May 2011 have enacted the mandatory submission of proposal with appendixes in electronic form to the courts. The land registry procedure is completely computerized. The submissions should be entered via a notary public or attorneys and real-estate agencies acting on behalf of the applicant. However, the amended Land Register Act still provides some exceptions that registrations may also be submitted directly by the applicant. Simultaneously, the amendments have transferred the responsibility for depositing original documents (e.g. contracts) that were attached to the submissions from the courts to the notary, whereby the notary’s confirmation of authenticity renders the evidence value of the electronic version equal to that of the original. The amendments enable free access via a web-portal to the contents of the land register, including pending notations, and to land register extracts, neither of which were free of cost prior to the reform. The proposal is sent to a central unit of the court which automatically assigns it to the least burdened local court. Once the proposal is filed with the competent land registry court, the registration process is initiated ex officio and the priority of entry is ensured by way of a land registry seal. The seal in the land registry that safeguards the priority order is obtained immediately. The priority order takes effect of the day on which the proposal has been filed.
The buyer can theoretically dispose of the property as soon as the purchase agreement is signed and the (direct or indirect) possession of the property is obtained by the buyer. The possibility to dispose with the property at this stage would depend on the other party to the new contract.
The buyer whose title is not yet entered into the land register but has already obtained the possession of the property enjoys the position of a proprietary possessor in good faith – the presumed owner. The latter has, among others, the right to claim the return of a property in the event of its dispossession from a proprietary possessor in good faith who has the property with a weaker legal title.
In any case the buyer has a possibility to claim the return of the purchase price but has no claims under the law of property until the title is entered into the land register.
Since May 1st, 2011 the proposal has to be filled in an electronic form. The Land registration fee had also changed and fees are not in points anymore.
The documentation shall include:
- Land registry proposal
- Document including the registration clause with certified signature of the seller (obtained in Procedure 5)
- Confirmation of the payment of the tax or taxes (obtained in Procedure 3)
- Purchase contract (if not same as document including the registration clause)
Time and cost: 31 days, EUR 337 (EUR 37 + EUR 9,5 VAT (notary fee for inscription in registry) + Registration court fees according to sliding scale (EUR 300 for property between 1,000,000 EUR and 2,000,000 EUR)
- Court Fees – For property between 1,000,000 EUR and 2,000,000 EUR the fee is 300 EUR. Court fees, reflecting the Act Amending the Judicial Fees Act – ZST-1C (Official Gazette of the Republic of Slovenia, No. 30/16 of 25 April 2016).
- Notary fee for preparation of land register proposal is 37 EUR (Notary Fees including latest Dopolnitev Notarske tarife – Official Gazette of the Republic of Slovenia, No. 15/14 of 28 February 2014).
