In general terms, property ownership in Slovakia gives someone an unrestricted legal right to hold, use and dispose of land or buildings as he sees fit. The law acknowledges and protects this right provided it does not violate human health, nature, cultural monuments or the environment. An owner can voluntarily accept limits on his rights or, exceptionally, they can be imposed on him (for example, where he has agreed to sell or has given up residence in Slovakia).
In principle, there are no restrictions on foreigners acquiring land in Slovakia, with certain exceptions in relation to agricultural and forest land.
The construction of buildings on land requires a valid planning and building permit from the building office of the local municipal authority. Under the Slovakian Civil Code, a building is not treated as part of the land. In other words, the ownership and other rights over a building may be held separately from the ownership and rights over the land on which it is erected.
When constructing a building on someone else’s land, there is usually an agreement or future purchase agreement to sell the land or building to the other party based on its present or future value. It is also possible for the land owner to grant the building owner a lease over the land for a fixed or indefinite period, sometimes with an obligation to purchase the land at the end of the lease. Alternatively, the land owner may be granted a lease of the building - very often, with an obligation to purchase the building at the end of the lease.
Taxation
Individual and corporate income tax is payable on any rental income and on the [proceeds of/gain from] sale of real estate. There is also a local tax on real estate collected by the local municipal authority.
Assignment and transfer of ownership title
Ownership title can be assigned by agreement or transferred by operation of law (e.g. by inheritance, by order of a state authority or by statutory provision). The new owner’s title must then be registered at the Real Estate Registry. This takes effect, in the case of assignment, from the date permission is granted by the Cadastral Administration and, in the case of transfers, when a record is entered in the Real Estate Registry.
Leasehold titles
The Civil Code regulates leases over land or buildings. There are special rules for leases over particular types of property, including:
- a flat or part of a flat (including sub-leases)
- residential spaces in facilities earmarked for permanent housing
- non-residential premises (including sub-leases)
Under the Civil Code, flats are not treated as separate property from the building they occupy but there are rules regulating the relationship between flats and providing for joint access to common parts, common facilities and, usually, the land on which the building is erected.
Flats can be the subject of what are known as protected leases, which give increased protection to the lessee (e.g. limiting the lessor’s right to terminate the lease, requiring the lessor to provide a replacement flat in specified circumstances).
Leases (and sub-leases) of non-residential premises are invalid unless they are in writing and state the subject and purpose of lease, the amount and due date of rent, the method of payment and, if for a fixed term, the term of the lease.
It is also possible to enter into financial leasing (hire purchase) agreements with leasing companies under which a lessee assumes certain risks and responsibilities (e.g. for maintenance and repairs) relating to the land or building during the lease period and, at the end of the lease, will [automatically] acquire ownership title. This can also be done as a reverse lease, where property is sold to the leasing company, leased back again under a financial lease and then reacquired at the end of the lease period.
Operational leases allow the lessee short-term or medium-term use of a property without having any investment risk or responsibility for property damage or for dealing with common ownership issues. These risks and responsibilities are borne by the lessor. Operational leases do not tie the lessee to the property in the long term and therefore allow the flexibility of regular change – perhaps to follow fashion trends or the latest in technology.
Restitution
When acquiring agricultural or forest land, it is necessary to check with the land offices whether a restitution claim has been filed (this must have been done by the end of 2004). Restitution claims can still be made by churches and parishes in respect of agricultural and forest land, farm buildings and interests in common land. These claims must be filed by the end of April 2006.
Registration
Most rights to real estate must be registered in the Real Estate Register, including:
ownership title
- easements or other rights over land or buildings
- mortgages or other encumbrances
- options to acquire land or buildings
- leases over land or buildings for a term of at least 5 years
- rights arising from the administration of state or municipal property.
Proceedings at the Real Estate Registry (known as cadastral proceedings) are much quicker than they used to be: applications to register rights in the Real Estate Register can now be fast-tracked within 15 days for a special fee of SKK 8,000. Ordinary applications for registration are supposed to take 30 days but usually take longer (fee SKK 2,000). There are three kinds of record in the Real Estate Register:
- An entry - made to create, or remove a right (e.g. ownership title or an easement)
- A record – made not to establish rights but to register information, such as the facts giving rise to the creation, change or extinction of a right or interest
- A note – made to record a certain fact about a right or interest over real estate.
Easements
The owner of a building erected on land owned by someone else will only be able to access and use the building if he is granted an easement (a restricted right to use the land) by the land owner – usually in return for payment. The easement also needs to be registered at the Real Estate Registry.
Encumbrances
Encumbrances are third party rights over land or buildings which are registrable in the Real Estate Registry and transfer with the ownership title. They can be acquired in various ways, including by law, court order, contract, inheritance or by prescription (unchallenged use or possession over time).
Charges
A charge is a right over property given to a creditor as security for performance of an obligation or repayment of a debt. Charges are regulated by the Civil Code and enforceable through the courts. However, special rules apply to charges securing borrowings from mortgage lending businesses, which are enforceable by a judicial executor, not by a court.
Charges are not enforceable until registered in the Notarial Register of Pledges (if over personal property) or the Real Estate Registry (if over real estate).
