Aug. 22, 2016
Slovakia is the second East European country included in the Euro-zone. According to the level of income per 1 inhabitant it is after the Czech Republic, but above such countries as Hungary, Poland, Greece and Portugal.
Despite strong economic growth over the last 20 years, Slovakia continues to be the unknown direction. Sometimes, however, choosing between a large number of countries, customers stay in Slovakia. Someone is attracted by the tranquility of this area or an excellent location in the heart of Europe. For other the decisive factor is the presence of a huge number of excellent ski resorts, healing thermal springs, water parks, enchanted forests, caves and other natural beauties.
A small digression on the real estate market of Slovakia will hold for us Ivan Slaninka, co-owner of the company Tatranet Real.
The crisis of 2008 and its consequences in Slovakia
The real estate crisis in Slovakia began six months before the USA. The bubble was caused by the accession of Slovakia to the EU and the Schengen area and the unrealistic expectations of sellers and buyers that very soon "all will be as in Europe." After 2009, prices began to fall, slowly but surely, and in 2011 -2013 years they've reached their bottom.
From 2013 to 2015 there was a gradual recovery of the market. Now, from the beginning of 2016, there has been a rapid and steady growth in property prices in Slovakia. This time, it is associated with practically zero rates of the European Central Bank.
Primary credit rate for one of our customers who bought an apartment in Bratislava (which is the most expensive region), amounted to -0,183%. Thus, the credit in Slovakia is very affordable. With the support of the state young couples with low incomes can get a mortgage with a rate of 2%. The high demand stimulates an increase in the cost per square meter.
In Slovakia is common the combined interest rate – first is established a fixed percentage for 3-5 years, after this period it becomes floating. The percentage varies in each case, both for the local population and foreigners.
As for foreigners, they can get a mortgage on almost the same terms as the locals. The only condition is that you must provide evidence that you have a constant flow of money. For persons living or working in the European Union, it will be more complicated.
The range of prices for residential and commercial properties
The range of prices for real estate in Slovakia is significant. The closer to West is situated the object, the more expensive it is. The cheapest property is in the East and South. Studio apartment in Bratislava (in the West) can be found for €60 000. In the Eastern part of Slovakia the same object will be sold for €15 000.
According to the latest data of Eurostat, Bratislava was ranked 6th in terms of welfare, behind only London, Luxembourg, Brussels, Hamburg, Groningen and ahead of Stockholm, Prague, Vienna, Bremen, Stuttgart, Paris.
The geography of sales
The main demand for residential property in Slovakia forms the local population. Foreign customers account for about 15%. Among them are the British, the Poles, the citizens of the CIS countries, Austrians, Swiss, Dutch, etc.
Poles often choose a property located in the Northern part, as Slovakia is bordered with Poland on the North. Ukrainians often choose the closest big city - Košice.
In the sector of commercial real estate 95% of buyers are citizens of Slovakia. In addition to Slovak investors on the market there are Poles, Ukrainians and Czechs.
The process of buying
The purchase procedure starts with the signing of the contract and paying the deposit (5-10% of the total amount). After that, lawyers of the real estate companies check the object for the presence of encumbrances, debts and loans.
The moment of transfer of ownership is the solution of Cadastre that comes to the new owner after 15 or 30 days after submission of the documents. Regular stamp duty is €66. In the accelerated procedure (15 days) you need to pay €200 more, €266.
Other costs during the transaction – certification of the signatures on the contracts (5 to 25 signatures) and payment to the notary or the Bank for temporary storage of payment until the receipt of the decision of the Cadastre (from €100 to €500 depending on the amount).
In Slovakia there is no tax on purchases, as in Germany. The former owner pays the sales tax (19%), and only in the case when the property was in his ownership at least 5 years.
Property owners pay annual municipal tax, the amount of which depends on the area and the location of the apartment, the average is €80-150 per year.
To obtain a residence permit in Slovakia there are several reasons, among them there is an entrepreneurship. This method is the easiest for property owners.
It is necessary to open the firm and become its CEO. The Executive Director can be only the person who lives in Slovakia and has a permanent address (owns real estate or leases it). The cost of opening a company and preparation of documents for residence permit will amount to approximately €4 000.
The firm must make a profit sufficient for the maintenance of the recipient's residence permit. For the business owner it is 20-fold subsistence minimum (€3 800). The income of the legal person must be at least €11 400 (a 60-fold subsistence minimum).
The residence permit is issued for a period of 1 to 3 years depending on the decision of the migration service in the future it must be renewed.
Text – Alena Eliseeva, ee24