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Chapter 7

Acquisition or Tenure of Property

In this section we consider only an ownership interest in land and/or buildings. In the same way as in some other jurisdictions, the land on which a building stands is regarded as being entirely separate from the building itself.

Under Slovak law, all transactions involving land (sale, purchase, pledge, restrictions on use, encumbrances, etc.) are required to be in writing and then, in order to be effective and enforceable, recorded in the Cadastral Register. Recent changes in the process have considerably accelerated registrations, with the Register now being accessible through the Internet. Even so, it is advisable to seek professional advice, especially as regards investigations into title, zoning status, etc.

Prior to Slovak accession to the EU on 1 May 2004, the ownership of property by foreigners was not possible. Now, however, the law does allow foreign nationals to acquire property in the country, except for agricultural land and forests. Again, it is recommended that appropriate professional advice be sought, since there is a procedure whereby EU citizens who have used agricultural land at least three years from the date of accession to the EU will be allowed to purchase such land. The restrictions for EU citizens should cease to exist in 2011.

The State continues to have powers of compulsory purchase of property, although both Slovak and foreign owners are equal in the eyes of the law in this respect and receive the same treatment. Compulsory purchase is, however, only allowed within the strict parameters laid down in the law. If it is in the public interest, only to the extent that is necessary for achieving the objective (e.g., it would not be permissible for the State to compulsorily acquire a complete factory site solely to obtain a few square meters needed to complete a road junction) and if there is no other option, i.e. agreement or other choices. The property owners shall receive fair compensation.

From the viewpoint of the potential investor, it is important to note that the State does have powers to use compulsory purchase for purposes of site assembly for a major and substantial investment into Slovakia.

Generally speaking, current Slovak property law is EU compliant, although there are still changes and amendments coming into force and it is important to ensure that decisions are based on up-to-date information, hence we recommend contacting the professionals.

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©2010 KPMG Slovensko spol. s r.o. , a Slovak limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

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