Tax on property income in Slovenia
Taxation Researcher | October 18, 2019
Effective Tax Rate on Rental Income
|Click here to see a worked example|
Nonresident foreigners are taxed on their Slovenian-sourced income. Married couples are taxed separately.
Residents of EU member states who file income tax returns in Slovenia can claim some allowances.
Rental Income Tax
Nonresident foreigners´ income is taxed at a flat rate of 25%. Taxable rental income may be computed by:
- Deduct actually incurred income generating expenses, such as maintenance and repair costs, management fees (supporting documents must be presented)
- Claim standard deduction of 10% of gross rentto account for maintenance costs
Rental Income Considered as Income from Business Activities
Nonresident foreigners can opt to consider their rental income as income from business activities. In this case, they must register at the Agency of the Republic of Slovenia for Public Legal Records and Related Services to be considered as a sole trader.
Under this case, taxable rental income may be computed by deducting actually incurred income generating expenses, such as maintenance and repair costs, management fees (supporting documents must be presented) from the gross rental income.
CAPITAL GAINS TAX
Capital gains realized from the sale of properties are taxed varying rates, depending on how long the owner held the property prior to the sale.Taxable capital gains are computed by deducting acquisition costs and incidental costs from the gross selling price, which is at least the market value of the property.
CAPITAL GAINS TAX 2017-2019
|HOLDING PERIOD||TAX RATE|
|Up to 5 years||25%|
|5 years - 10 years||15%|
|10 years - 15 years||10%|
|15 years - 20 years||5%|
|Over 20 years||0%|
|Source: Global Property Guide|
Capital gains derived from the disposal of immovable property acquired before 1 January 2002 are not subject to capital gains tax.
Capital gains on immovable property which was used as a permanent home of the owner for at least three years preceding the disposal are tax exempt.
Property tax is levied on property owners. The tax is levied on the property value as determined by law. Property tax is levied at progressive rates and is set by local municipalities.
The tax rate for dwellings or residential properties varies from 0.10% to 1.00%. The tax rate for premises used for rest and recreation varies from 0.20% to 1.50%. The tax rate for business premises varies from 0.15% to 1.25% and it is increased by 50% for vacant business premises.