Slovak Republic Home Europe Slovak Republic Overview Property in Slovak Republic More SK × Slovak Republic Financial Overview Overview House Prices Market in Depth Rental Yields Income Tax et al Tax Example Taxes if Resident Buying Guide Landlord and Tenant Property Inheritance Country Statistics Property Investments Where to Buy Survey of Slovak Republic Bratislava Presov Trnava Zilina Key Contacts Accountants Lawyers Real Estate Agents Mortgages On This Page: Market in Depth Rental Yields Taxes and Costs Buying Guide Landlord and Tenant Market in Depth House prices are rising strongly in Slovak Republic September 01, 2017 House prices in Slovakia are now rising strongly, with demand buoyed by low interest rates. The average residential property price rose by 7.04% to €1,369 (US$1,437) per square metre (sq. m.) during the year to Q2 2017, an acceleration from last year’s 4.75% y-o-y rise, according to the National Bank of Slovakia (NBS). When adjusted for inflation, property prices rose by 6.02%. During the latest quarter, property prices rose by 2.78% (2.4% in real terms). Despite this, Slovakia’s house prices are still 11.6% below their Q2 2008 peak (-21.6% in real terms). In Bratislava region, which has the country’s most expensive housing, residential property prices rose by 6.7% y-o-y to €1,904 (US$2,283) per sq. m. during the year to Q2 2017, up from y-o-y rises of 6.3% a year earlier and 2.6% in Q2 2015. All the other regions also saw strong house price increases during the year to Q2 2017. Trencin experienced the biggest rise of about 15.9% y-o-y to €744 (US$892) per sq. m. In Nitra, house prices surged 15% y-o-y to €668 (US$801) per sq. m. In Presov, house prices rose by 10.3% y-o-y to €838 (US$1,005) per sq. m.In Trnava, house prices rose by 9% y-o-y to €937 (US$1,124) per sq. m. In Kosice, house prices increased 7.4% to €990 (US$1,187) per sq. m. over the same periodIn Zilina, house prices rose by 5.7% y-o-y to €866 (US$1,038) per sq. m. In BanskaBystrica, house prices increased 4.6% y-o-y to €768 (US$921) per sq. m. he housing boom in Slovakia lasted from 2006 to Q2 2008, with house price rises ranging from 14% to 35% per annum. The surge stopped in late 2008, and prices either fell or only increased a little in following years. In 2009, house prices fell by 12.31% (-12.66% in real terms)In 2010, house prices fell by 2.08% (-3.16% in real terms)In 2011, house prices fell by 2.68% (-6.86% in real terms)In 2012, house prices increased by 0.89%, but in fact fell by 2.55% when adjusted for inflationIn 2013, house prices fell by 2.57% (-3.01% in real terms)In 2014,house prices increased by a meagre 0.25% (0.25% in real terms)In 2015, house prices rose by 1.15% (1.62% in real terms)In 2016, the housing market started to grow stronger, with house prices rising by 5.84% (6% in real terms) from a year earlier Slovakian house prices are expected to continue rising during the remainder of this year and until 2018, amidst a continued surge in property demand both from local homebuyers and foreign investors, according to local property experts. Slovakia registered economic growth of 3.3% in 2016, from real GDP growth rates of 3.8% in 2015, 2.6% in 2014, 1.5% in 2013, 1.7% in 2012, and 2.8% in 2011. The Slovakian economy is projected to expand by 3.3% this year and by another 3.7% in 2018, according to the IMF. here are no legal restrictions on foreigners buying buildings in Slovakia. Analysis of Slovak Republic Residential Property Market » Rental Yields Rental returns are moderate in Bratislava, Slovakia How much will you earn? Gross rental yields on apartments are moderate in Bratislava, at around 4.5% to 5.4%. To define terms, the gross rental yield is the rent the landlord will earn - before taxation, vacancy costs, and other costs - compared to the purchase price of the property. The gross rental yield in the Old Town is about 4.5%, with smaller apartments earning more. Returns are not much different in Ruzinov and in the New Town. The Airbnb market is thriving, but expect damage to your property. How much do apartments cost? Apartments in the Old Town of Bratislava cost on average EUR 2,900 per square metre (sq.m.). In the nearby areas of Ruzinov and in the New Town, apartments tend to be cheaper, selling for around EUR 2,400 per sq. m. You can 'get into the market' for EUR 120,000 to EUR 350,000. How easily will you rent your property? Anecdotally, properties can be quite hard to let. Bratislava is a small place. Few people absolutely need to live in the centre of Bratislava (unlike in other larger cities). The number of expatriates, embassies, and international companies in Bratislava is small, which again restricts the supply of tenants. Round trip transaction costs are very low on residential property in Slovakia. See our Slovak property transaction costs analysis and our Slovakia transaction costs compared to other locations. Read Rental Yields » Taxes and Costs Rental income tax is moderate in Slovak Republic Rental Income: Rental incomeis taxed at a flat rate of 19% for income up to €35,022.31, and at a flat rate of 25% on income exceeding €35,022.31. Capital Gains: Capital gains realized from the sale of real estate are taxed at 19% to 25%. Capital gains realized from selling properties held for more than five years may be exempted from capital gains tax, subject to certain conditions. Inheritance: Inheritance taxes were abolished as of 01 January 2004. Residents: Income and capital gains are taxed at a flat rate of 19% for income up to €35,022.31, and at a flat rate of 25% on income exceeding€35,022.31. Read Taxes and Costs » Buying Guide Roundtrip buying costs are very low in Slovakia Total roundtrip buy-sell costs are very low, between 4% and 7.60% of property value. The buyer pays for the notary and registration fees, and legal fees. The seller pays for the real estate agent’s fees. Read Buying Guide » Landlord and Tenant Slovak law is neutral between landlord & tenant Rent: Rent control was abolished in Slovakia from 2007, and previously did not apply to individually-owned apartments. Tenant Security: The tenant can break the contract at any time by giving three months’ notice without needing to give a reason, while the landlord needs substantial reasons to break an ongoing contract. Read Landlord and Tenant » ECONOMIC GROWTH Higher economic expansion; falling unemployment Slovakia is one of Eastern Europe’s most successful transition countries. Born in 1993 after seceding amicably from the Czech Republic (the two countries were formerly known as Czechoslovakia), it has a stable polity and liberal market economy. Slovakia benefited from eight years’ reform under the centre-right coalition led by MikulasDzurinda (1998-2004) whose reforms won praise from international organizations, and who oversaw EU and Nato entry. The economy’s rapid growth facilitated the country’s membership of the Organization for Economic Cooperation and Development (OECD) and the European Union (EU) in 2004. In December 2007 Slovakia became a full member of the Schengen Zone, allowing passport-free travel in the 24-member European nations. Real GDP growth reached an impressive 10.8% in 2007, following 8.5% for 2006, 6.8% for 2005, and 5.3% for 2004. Kia, Volkswagen, and Peugeot Citroen all have built large car plants in Slovakia. Since then, Slovakia has had two terms under the socialist and populist leader Robert Fico, of the Smer party (prime minister 2006-2010, and 2012 to present). Fico’s stewardship has been marked by tension with Hungary, populism towards Slovakia’s Roma population, and weaker economic growth. In 2008 there was 5.6% growth, and then a collapse with the crisis and a 5.4% GDP contraction in 2009. Slovakia’s economy recovered quickly with GDP growth of 5% in 2010, but this was followed by 4 weak years, with 2.8% GDP growth in 2011, 1.7% in 2012, 1.5% in 2013 and 2.6% in 2014. In the past two years, the economy bounced back somehow, recording a 3.8% expansion in 2015 and another 3.3% in 2016. The Slovakian economy is projected to expand by 3.3% this year and by another 3.7% in 2018, according to the IMF. In 2016, the central government budget deficit stood at €980 million (US$1.18 billion), down by almost half from a year ago and the lowest deficit in the past eight years, according to the Ministry of Finance of the Slovak Republic. As percent of GDP, the budget deficit fell to just 1.68%, down from 3% in 2015 and 2.7% in 2014. In the government’s three-year fiscal plan, the country is expected to record its first budget surplus of 0.16% of GDP in 2019. Slovakia’s gross public debt will fall slightly to 51.5% of GDP this year and to 49.8% of GDP next year, from 51.9% in 2016 and 52.5% in 2015, according to the European Commission. The country had an annual inflation rate of 1% in June 2017, up from -0.8% in the same period last year, according to the Statistical Office of the Slovak Republic. Consumer prices are expected to increase by 1.4% this year, after falling by 0.5% in 2016, 0.3% in 2015 and 0.1% in 2014, according to the European Commission. In June 2017, nationwide unemployment fell to 6.9%, from 7.4% in May, 7.7% in April, and 8% in March 2017, according to the central bank. The IMF expects the unemployment rate to fall to 7.9% this year, from 9.7% in 2016 and an annual average of 13.3% from 2009 to 2015. “We have the lowest deficit ever, the lowest debt in five years. We’re pleased about the developments on the labour market, and we also have the lowest unemployment rate ever. None of that can be taken for granted. The results are better than we expected,” said Slovak Finance Minister Peter Kazimir.