The most well-known tax we encounter when selling real estate is property transaction tax. As the name suggests, property transaction tax (Slovenian abbreviation DPN) is a tax that must be paid when property (real estate) is transferred.
In practice, property transaction tax is most often encountered when real estate is sold. Nevertheless, the property tax must be paid not only when the real estate is sold, but also when the real estate is exchanged, when the ownership right is recognised, when the building right is established and when the building right is transferred.
However, there is an exception – the property tax does not need to be paid if the value added tax (VAT) was paid at the time of the transfer of ownership. The latter is calculated at the first sale of a new building. Thus, when selling real estate, we are obliged to either pay VAT or pay VAT.
The process from the conclusion of the sales contract to the payment of the tax
Within 15 days after the conclusion of the sales contract, the seller is obliged to submit a declaration for the assessment of property transaction tax, together with the documentation on the basis of which the ownership right is transferred to the regional financial office. The Financial Administration is obliged to assess the tax within 30 days at the latest. The tax must be paid within 30 days of the service of the tax assessment decision.
Therefore, a maximum of 75 days can elapse from the conclusion of the sales contract to the payment of the tax. In practice, this time is usually shorter, as the seller (or his real estate agency) submits the tax assessment notice earlier than 15 days after the conclusion of the sales contract. Also, the tax payment is usually made earlier than within 30 days.
The person responsible for paying the tax is the seller, but the buyer and seller can agree on who will actually pay the tax in the sales contract.
The tax is assessed from the sale price of the property at a tax rate of 2%. If the property was sold for EUR 200,000, the property transfer tax will amount to EUR 4,000.
Without proof that real estate sales tax has been paid, it is not possible to verify the signatures on the sales contract. Without verification of the signatures on the purchase agreement, it is not possible to register the property right of the new owner in the land register. As a result, the tax will necessarily be paid before the real estate sale process is completed.
When concluding a sales contract, you will always have to pay property transaction tax in the amount of 2% of the contractually determined value of the real estate.
In only certain cases, the seller will also be obliged to pay another tax – income tax on capital gains when selling real estate.