Guide to Property Taxes in Slovakia

Nonresident individuals are taxed on their income from Slovakian sources. Married couples are taxed separately.

Income Tax

Income is classified into the following categories:

1. Employment income
2. Business, professional, and rental income
3. Income from capital
4. Other income

Income and capital gains are taxed at a flat rate of 19% for income up to €48,441.43, and at a flat rate of 25% on income exceeding that amount.

Rental Income Tax

Rental income is taxed at 19% - 25%, after deductions. Generally, necessary expenses incurred to generate, ensure, and maintain rental income are deducted before arriving at the taxable income. Deductions can include depreciation costs, interest and finance charges, real estate taxes, repairs, maintenance, and other types of rental expenses. Alternatively, the taxpayer can make a general expense claim of up to 60% of the rental income instead of itemizing deductions.

Rented buildings qualify for depreciation and are usually depreciated over 20 years. Buildings can be depreciated either through the straight-line or accelerated method.

Capital Gains

Capital gains realized from the sale of real estate are taxed at 19%. Gains from the sale of properties used in business are considered business or professional income. Gains from the occasional sale of properties not used in business are considered as other income.

Exemptions from capital gains tax:

1. Properties that have been the taxpayer’s permanent residence for at least the two-year period prior to the sale, unless the property was used for business in the last five years.
2. Properties held for more than five years, unless the property was used for business in the last five years.

Value Added Tax (VAT)

In Slovakia, the standard VAT rate is 20%.

There is also a reduced rate of 10%, which applies to certain goods and services such as books, some pharmaceuticals, selected foodstuffs, and accommodation services.

In addition, Slovakia has a temporary reduced VAT rate of 5% on certain goods and services (like some types of food and beverages served in restaurants), introduced as part of support measures in recent years.

Corporate Taxation in Slovakia

A 10% corporate income tax rate, reduced from the previous 15%, applies to legal entities whose taxable income does not exceed EUR 100,000 in the tax period. For taxable income between EUR 100,000 and EUR 5 million, the applicable rate is 21%. If taxable income exceeds EUR 5 million, a higher rate of 24% applies. Income-generating expenses are deductible when calculating taxable income.

Property Buying and Selling Taxes/Costs

Property Taxation in Slovakia

There are three kinds of real estate tax: (1) land tax, (2) building tax, and (3) apartment tax. There are general rates for these taxes but municipal authorities may increase or decrease the tax rates applicable in their municipalities.