Published on and written by Cyril Jarnias
Moving to Slovenia is attracting an increasing number of expatriates from within and outside Europe. A Eurozone country and member of the EU and OECD, Slovenia combines quality of life, institutional stability, and a still relatively accessible real estate market. But when it comes to taxation, things quickly get complicated, especially if you have a mix of employment income, investments, and real estate holdings.
This article details income tax and real estate taxation in Slovenia for expatriates, explaining current rules and upcoming reforms. It aims to clarify the amounts to be paid, methods to avoid double taxation, and the tax implications of buying, renting, or selling real estate.
Tax Residency: The Essential Starting Point
Before discussing tax rates, a key element must be clarified: are you a Slovenian tax resident or a non-resident in the eyes of the administration, the Financial Administration of the Republic of Slovenia (FURS)?
In Slovenia, tax residency does not depend on nationality but on a combination of criteria. A distinction is mainly made between residents, taxed on their worldwide income, and non-residents, taxed only on their Slovenian-source income.
How does one become a Slovenian tax resident?
You are generally considered a tax resident if one of the following conditions is met:
To be considered a tax resident in Slovenia, you must meet at least one of the following conditions: have a permanent residential address officially registered in the country or a habitual home there; concentrate the center of your personal and economic interests there (family, primary employment, investments); or be physically present there for more than 183 days, consecutively or not, during a calendar year.
The administration may consider that tax residency is established before reaching 183 days if your personal and economic ties with Slovenia become clearly predominant (marriage or family reunification on site, purchase or long-term rental, stable employment, etc.).
Conversely, a stay of less than six months without lasting attachments in principle leads to a non-resident status, unless other criteria (family, home, center of interests) lean towards Slovenia.
Practical Consequences for Expatriates
The tax residency status determines the scope of taxation:
A tax resident in Slovenia is taxed on all worldwide income (salaries, pensions, dividends, interest, rental income, capital gains, etc.) but may benefit from a tax credit for taxes already paid abroad thanks to tax treaties. Conversely, a non-resident is taxed only on Slovenian-source income, such as rental income from an apartment in Ljubljana, capital gains realized on real estate located in Slovenia, or certain income related to a director role in a Slovenian company.
In practice, an expatriate who obtains a long-term residence permit, lives and works in Slovenia, or moves their family there is highly likely to quickly become a tax resident.
Upon arrival, it is recommended to file a residency status determination form with FURS. Similarly, upon final departure, a request for recognition of non-resident status must be formalized to avoid undue taxation after leaving.
Personal Income Tax: A Demanding Progressive Scale
Slovenia applies a progressive income tax with five brackets and a high top marginal rate. Both residents and non-residents are subject to the same scale for so-called “active” income (wages, professional profits, etc.), but non-residents are taxed only on their Slovenian-source income.
Income Tax Scale: Current Brackets
For employment and activity income, the progressive scale is structured as follows (representative example of recent scales):
| Annual Taxable Income Bracket (€) | Tax Calculation Formula | Applied Marginal Rate |
|---|---|---|
| Up to 9,210.26 | 16% | 16% |
| 9,210.26 – 27,089.00 | 1,473.64 + 26% on the amount above 9,210.26 | 26% |
| 27,089.00 – 54,178.00 | 6,122.11 + 33% on the amount above 27,089.00 | 33% |
| 54,178.00 – 78,016.32 | 15,061.48 + 39% on the amount above 54,178.00 | 39% |
| Above 78,016.32 | 24,358.43 + 50% on the amount above 78,016.32 | 50% |
For a high-income expatriate employee, the 50% marginal rate can therefore apply to the top portion of their income.
Taxable income is determined after deducting mandatory social security contributions and certain deductions (basic allowance, family expenses, supplementary pension, disabilities, etc.).
Overall Tax Burden on Labor
OECD data shows that the overall tax burden on labor is high in Slovenia:
| Indicator (recent year) | Slovenia | OECD Average |
|---|---|---|
| Overall tax rate on the average worker | 42.8% | n/a |
| Share of gross wage kept net by the employee | 66.3% | 75.2% |
| Share of social contributions in total tax revenue | ~40% | 26% |
Social contributions alone represent about 15.2% of GDP and nearly 40% of total tax revenue, which reinforces the tax and social pressure on labor income. For an expatriate employee, it is therefore essential to analyze not only income tax but also mandatory social contributions.
Tax Returns, Calculations, and Procedures
Slovenia operates with an annual taxation system with prepayments and preliminary tax calculation:
The Slovenian tax administration (FURS) generally issues a **preliminary calculation** of income tax for the previous year by the end of March or end of May. The taxpayer has **30 days** to contest it. If not contested, this calculation becomes final. If no calculation has been received by **June 15**, the taxpayer must file their **annual tax return** no later than **July 31**. Any difference between the tax due and the prepayments made must be settled (or is refunded) within **30 days** of receiving the final tax assessment notice.
Income from activity, professional profits, agriculture and forestry, or certain income from rights (transfer of property rights, etc.) are included in this annual return.
Capital income (interest, dividends, capital gains) and rental income are taxed at separate proportional rates and require specific tax returns.
Capital Income, Rental Income, and Real Estate Capital Gains: A Separate Regime
For expatriate investors, Slovenia is particularly interesting on two points: rental income taxation and real estate capital gains taxation. These incomes are in principle taxed separately from the progressive scale, at fixed or degressive rates depending on the holding period.
Unfurnished Rental: Taxation of Rental Income for Individuals
In Slovenia, rental income received by an individual is generally subject to a proportional (final) rate:
– in the most recent texts, the standard rate mentioned is 25% for individual rental income;
– some older documents cite a rate of 27.5%, but the regime currently discussed in reforms clearly centers around 25%.
The calculation of the tax base can be done in two ways:
– either a flat-rate deduction of 10% (or 15% in some earlier sources) is applied to gross rental income, with the remainder taxed at 25%;
– or the owner opts for the deduction of documented actual expenses (maintenance work, repairs, management fees, etc.), when these are significant.
For a non-resident expatriate receiving rental income in Slovenia, a final tax rate of 25% applies. This rental income is not included in the progressive income tax return. An exception has existed since 2022 for residents, who can opt to aggregate this rental income with their other income (activity and capital), but this choice is not automatically advantageous.
When rental income is paid by a Slovenian entity to a non-resident, a withholding tax may be applied, in particular:
– a 22% withholding is mentioned on certain rental payments to non-residents;
– a specific 15% withholding of a corporate tax type may apply on rental payments to a non-resident company, unless it has a permanent establishment in Slovenia.
Bilateral tax treaties can reduce these rates.
“Professional Activity” Option for Non-Residents
Interesting peculiarity: a foreign non-resident may choose to treat their rental income as business income by registering as a sole trader with the AJPES agency. In this case:
The rental income received is considered business income. The tax base is calculated by deducting all actual professional expenses (maintenance, repairs, management, etc.) from gross rental income. Taxation is then carried out within the framework of professional income tax, with the possibility to opt for a flat-rate expense regime, and no longer at the fixed 25% rate.
This option makes sense for highly indebted owners, those undertaking major renovation work, or managing a large rental portfolio.
Real Estate Capital Gains: An Attractive Long-Term Degressive System
Slovenia stands out with a very clear and rather favorable real estate capital gains regime for long-term investors. For individuals, capital gains tax depends on the property’s holding period:
| Real Estate Holding Period | Capital Gains Tax Rate |
|---|---|
| Less than 5 years | 25% |
| Between 5 and 10 years | 20% |
| Between 10 and 15 years | 15% |
| More than 15 years | 0% (full exemption) |
The taxable capital gain is calculated as the difference between the sale price and the acquisition cost (purchase price, possibly increased by certain costs and improvements).
Several income tax exemption schemes are particularly advantageous for individuals residing outside France.
Income received from abroad (salaries, professional income) may be fully exempt from French tax under certain tax residency conditions.
Capital gains realized on the sale of real estate located abroad may be exempt, according to tax treaties.
Pensions paid by a foreign scheme may benefit from full or partial exemption in France.
Dividends and interest received from foreign sources may be exempt according to international treaty terms.
– capital gains on property acquired before January 1, 2002 are exempt;
– the sale of a property used as the owner’s primary residence for at least the three years preceding the sale is also exempt from capital gains tax;
– after more than 15 years of ownership, the capital gain is fully exempt.
For companies, there is no separate real estate capital gains regime: the capital gain on a property is included in the company’s result and taxed at the corporate income tax rate (19% in principle, 22% temporarily for 2024‑2028).
In terms of formalities, taxpayers must declare a real estate capital gain within 15 days of the property transfer. For other capital gains (securities, etc.), the annual declaration generally must be filed by February 28 for the previous year.
Social Security Contributions: An Aspect Often Underestimated by Expatriates
Beyond income tax, an expatriate employee or self-employed person must factor in another important aspect: social security contributions. These fund pension, health, unemployment, maternity, and workplace accident insurance schemes.
The overall burden reaches 38.2% of gross salary, distributed as follows:
| Type of Contribution | Employee Share | Employer Share |
|---|---|---|
| Pension and Disability | 15.00% | 8.85% |
| Health Insurance | 6.36% | 6.56% |
| Unemployment Insurance | 0.14% | 0.06% |
| Workplace Accident Insurance | 0% | 0.53% |
| Parental Insurance (maternity, etc.) | 0.10% | 0.10% |
| Total | 22.10% | 16.10% |
There is no strict contribution ceiling on salaries, which keeps the social burden high for high incomes. Self-employed individuals and sole traders must pay all these contributions themselves on their professional income base.
For some expatriates, such as US nationals, bilateral social security agreements allow avoidance of double contributions in the country of origin and Slovenia, while being subject to the Slovenian social security system.
Property Tax in Slovenia: The Current System and the Announced Reform
Slovenian real estate taxation is in transition. Today, two main levies apply to real estate ownership: the property tax and the building land use fee. The government has also presented a draft new tax on residential housing which could change the game for expatriates owning second homes.
The System in Force: Property Tax and Building Land Use Fee
Currently, Slovenian property taxation consists of two instruments:
1. The property tax, due by the owner of a building, apartment, garage, or second home. 2. The building land use fee, levied on both built and unbuilt land, charged to the direct user (often the owner or sometimes the tenant).
Property Tax: Scale and Exemptions
The property tax is calculated on the property’s taxable value, determined according to administrative criteria. Rates are set by municipalities, within progressive ranges:
| Type of Real Estate | Annual Rate Range (on value) |
|---|---|
| Housing (residential use) | Approx. 0.10% to 1.00% |
| Professional/Commercial Premises | Approx. 0.15% to 1.25% |
Some essential rules are particularly relevant to expatriates:
By default, the liable party is the owner registered in the land register. No tax is due if the residential area of the primary residence is less than 160 m². First owners of new homes may benefit from a 10-year exemption, upon application filed before January 31.
This architecture partly explains why property tax revenue is low in Slovenia: it represents only 0.6% of GDP, compared to an average of 1.8% in the EU and up to 4% in France. In absolute value, this corresponds to about 280 million euros per year, largely concentrated in urban areas.
Building Land Use Fee
This fee applies to both unbuilt developable land and already built land. It is set by municipalities, which determine the scales.
– For vacant land, the fee depends essentially on the area (m²).
– For built land, it is calculated based on the building’s usable floor area.
– The liable party is the direct user of the property: owner, long-term tenant, or holder of certain real rights.
A five-year exemption may be granted, upon application, for a new construction or purchase of a new apartment. Furthermore, some municipalities offer specific reductions or exemptions for low-income individuals.
The amounts of property tax and the fee are collected by FURS on behalf of the municipalities, via dedicated municipal tax accounts.
The Draft New Tax on Residential Housing
Faced with weak property taxation and pressure on the housing market, the Slovenian government has presented a major project: a new housing tax mainly targeting second homes and unbuilt land.
The main outlines of this reform, approved as “starting points” in the cabinet, are as follows:
Main features of the proposed tax on residential housing, aimed at addressing the housing shortage and funding labor cost reductions.
Would apply to all residential housing (houses, apartments, building land) located in Slovenia. All natural and legal persons owning property, including non‑residents, would be liable.
The primary residence actually occupied by its owner would be fully exempt, subject to proving actual occupancy (utility consumption, etc.) and not just a declared address.
A rate of 1.45% of the property’s market value, as estimated by the Surveying and Mapping Authority (GURS), is envisaged.
The tax would explicitly target second homes and unbuilt land, aiming to free up housing and address the shortage and rising rents.
Expected revenue is around 600 million euros, allocated to the state budget to fund reductions in labor costs.
The project plans for the new tax to replace the current property tax, while maintaining the building land use fee. It also includes a tax incentive mechanism for renting: for individuals, the tax would be reduced by up to 25% of the declared rental income, to encourage rental income declaration and formalization of leases. This incentive would not apply to short-term tourist rentals or legal entities.
Finally, in cases of co-ownership, each co-owner would be taxed proportionally to their share.
This project has, however, met with significant opposition, and a similar scheme was already struck down by the Constitutional Court in 2013. Observers therefore consider a rapid entry into force unlikely, even though political pressure to strengthen property taxation remains strong.
For an expatriate owning a second home in Slovenia, the implication is clear: if this reform goes through, the annual bill could increase significantly, as the 1.45% rate on market value is notably higher than most current municipal rates.
Real Estate Transaction Tax: Purchase, Sale, VAT, and Fees
In addition to the annual property tax, Slovenian real estate taxation includes taxes on transactions: purchase, sale, registration fees.
Real Property Transfer Tax
When the sale of a property is not subject to VAT, it is subject to a real property transfer tax:
– standard rate: 2% of the sale price or, in the case of an abnormally low price, a recalculated base (generally 80% of the market value if the price is at least 20% lower than this value);
– liable party: in principle, the seller, unless a contractual clause shifts the burden to the buyer.
This tax typically applies to older properties, especially those beyond a certain age (often 20 years). An expatriate seller must therefore factor this charge into the overall profitability calculation of their investment.
Role of VAT in Real Estate
The sale of a property may, in some cases, be subject to VAT instead of the 2% transfer tax. This is notably the case for:
– the sale of a new building by a legal entity, before its first occupation or within two years following it;
– the transfer of building land.
Applicable rates are:
| Real Estate Transaction Subject to VAT | VAT Rate |
|---|---|
| Standard rate (most properties) | 22% |
| Reduced rate for housing intended for permanent residence (social policy) | 9.5% |
In these transactions, VAT replaces the 2% transfer tax, but does not eliminate other transaction costs (notary, lawyer, agency).
Transaction Costs: What Buyers and Sellers Actually Pay
In addition to taxes, a real estate purchase in Slovenia involves various ancillary costs, as a percentage of the sale price:
| Cost Item | Buyer’s Share | Seller’s Share |
|---|---|---|
| Transfer tax (if no VAT) | – | 2% (in principle) |
| VAT (if new property / land) | Included in price, borne by buyer | – |
| Notary fees | 0.10% – 1.00% | – |
| Lawyer fees | 0.50% – 1.00% | – |
| Agency commission | 1.00% – 2.00% | 1.00% – 2.00% |
| Land register registration fees | €5 – €5,000 depending on value | – |
Overall, the buyer typically bears 3.6% to 6% in costs (excluding VAT on the price) and the seller 1% to 2%, bringing the total “round-trip” cost of a real estate investment to 4.6% to 8% of the property price. For a short- or medium-term expatriate investor, these costs must be factored into the return calculation, in addition to capital gains tax.
Ownership of Real Estate by Foreigners: Access Rules and Absence of Preferential Regimes
In terms of property rights, Slovenia is relatively open to foreigners, particularly nationals of the EU and OECD countries.
Conditions for purchasing real estate vary according to the buyer’s nationality. Citizens and legal entities of the EU, OECD, and EFTA benefit from unrestricted acquisition. Nationals of EU candidate countries (such as Albania, Turkey, or Ukraine) may purchase under a condition of reciprocity, following an administrative decision. Nationals of other third countries can generally only acquire property through inheritance (subject to reciprocity), but may hold shares in property-owning companies without restriction.
To date, there are no preferential tax regimes specifically designed for foreigners buying property in Slovenia. In other words, an expatriate is taxed like a Slovenian on the ownership, rental, or sale of a property, as long as they are in an identical situation.
Corporate Income Tax and Real Estate Holding via a Structure
For expatriates investing via a company (Slovenian or foreign), Corporate Income Tax (CIT) applies to real estate income and capital gains.
The base rate is 19%, but a specific law related to reconstruction after the 2023 floods provides for a temporary increase to 22% for the 2024 to 2028 tax years. Companies can deduct all their actual expenses and benefit from several incentive regimes (R&D, productive investments, green and digital transition, etc.), but these schemes mainly concern economic activity and not specifically passive real estate holding.
For an expatriate, the comparison between direct ownership and ownership via a company must take into account:
Direct tax rate on rental income for an individual, before deduction of expenses.
In many cases, for a long-term expatriate investor, direct ownership remains more advantageous thanks to the capital gains exemption after 15 years (or use as a primary residence), while a company may be relevant for more intensive operations (development, intensive furnished rentals, etc.).
Tax Treaties and Double Taxation: An Essential Safety Net
Slovenia has signed over fifty bilateral tax treaties, including with France, Belgium, Luxembourg, Switzerland, many EU states, but also Canada, the United States, China, and Gulf countries. These treaties have several objectives:
– to avoid double taxation on the same income or capital;
– to allocate the taxing rights between Slovenia and the country of residence / origin;
– to combat tax evasion and facilitate information exchange;
– to provide dispute resolution procedures.
For a Slovenian tax resident, tax paid abroad on income may be credited against the Slovenian tax due on that same income, up to the corresponding Slovenian tax amount. Furthermore, tax treaties set ceilings for withholding taxes applicable to dividends, interest, and royalties.
For non-residents receiving Slovenian-source income (salaries, fees, rent, dividends, etc.), treaties can reduce the withholding taxes applied by Slovenia. In this case, it is often necessary to request a certificate of tax residence from the administration of one’s country of residence and file an application to benefit from the treaty with FURS.
According to the OECD principle, income derived from real estate in Slovenia (rental income and capital gains) is taxable in Slovenia. The owner’s country of residence may then apply a tax credit or exemption according to its own national rules.
Key Takeaways for an Expatriate in Slovenia
Combining income tax, social charges, and property taxation, Slovenia presents a nuanced fiscal landscape for expatriates.
For an employee or self-employed individual:
– the progressive scale peaks at 50%, reinforced by high social contributions, which can increase the burden for high incomes;
– however, many allowances and exemptions exist (family expenses, disability, supplementary pensions, allowances, professional expenses, posted worker statuses);
– “talent” expatriates may benefit from limited-time tax reduction schemes, particularly for new highly qualified residents.
For a real estate investor:
The current tax regime has competitive aspects: rental income taxed at a fixed 25% rate with possible deductions, capital gains exempted after 15 years of ownership, and a moderate property tax. However, a proposed new 1.45% tax on residential housing based on market value could radically increase the tax burden for second homes and unbuilt land, including for expatriates.
In all cases, the key for an expatriate remains to: adapt to the local culture and build ties with the community.
For a successful real estate investment in Slovenia, it is crucial to: clarify your tax residency status with FURS from the outset; check the provisions of the tax treaty between Slovenia and your country of origin; anticipate the ownership structure for your investments (direct or via a company) considering long-term capital gains; and monitor the evolution of the property tax reform project, which will condition the net profitability of holding second homes in the years to come.
Disclaimer: The information provided on this website is for informational purposes only and does not constitute financial, legal, or professional advice. We encourage you to consult qualified experts before making any investment, real estate, or expatriation decisions. Although we strive to maintain up-to-date and accurate information, we do not guarantee the completeness, accuracy, or timeliness of the proposed content. As investment and expatriation involve risks, we disclaim any liability for potential losses or damages arising from the use of this site. Your use of this site confirms your acceptance of these terms and your understanding of the associated risks.
Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.
On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.
Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.
