As those who have bought and sold a property in Slovakia will know, the Slovak tax system distinguishes between three scenarios when it comes to taxing proceeds from property sale. Income tax (19%) is payable on capital gains except in the following cases:
a) the property has been used as principal primary residence for at least 2 years prior to sale
b) the property has been owned for at least 5 years (not used as PPR)
The main obstacle for a property investor has however been a condition to point b) above, based on which the exemption after 5 years of ownership does not apply if the property has been used to generate income – including from letting. This has meant investors (who have been letting their property) were always liable for tax on profits from capital gains upon sale. The exemption could only be applied 5 years after the income generating activity had ceased.
Now for the news all investors will certainly appreciate: Effective 2007 the restriction on rental property has been abolished. What it means is after 5 years of ownership all sellers are exempt from tax on capital gains!
Note: the above applies to properties held in individual name; companies are always liable to pay (19%) corporation tax on profits from capital gains.
Provided by: http://www.slovakiainvestmentproperty.com