Text file: 2666.txt
author: BorisL
downvotes: 4
end consideration date: 2012-04-26
id: '2666'
number comments: 3
number views: 3001
proposal type: Competent authority response
response: "Response from the Ministry of Infrastructure and Spatial Planning\nIn draft\
  \ 2666, the petitioners propose to add a provision to the Law on Real Estate Transactions\
  \ (Official Gazette of the Republic of Slovenia, No 72/06-UPB1 and 49/11), according\
  \ to which the legal transaction for the transfer of ownership rights could be carried\
  \ out exclusively by a professional, licensed by the State and insured for liability,\
  \ which would ensure that the transfer of ownership rights would be legally secure\
  \ and would not require various lawsuits and court actions in the future, thus incurring\
  \ additional costs for buyers and sellers. In fact, the law stipulates that when\
  \ the transfer of ownership is carried out by a real estate company with licensed\
  \ real estate agents, the real estate company must ensure that the contract or all\
  \ the documents are drawn up by a lawyer with at least a Bachelor's degree, whose\
  \ signature guarantees the legal validity of the contract, which also means that\
  \ he/she must first double-check any legal obstacles to the conclusion of the transaction.\
  \ The estate agent also ensures that the buyer has access to all the necessary documents,\
  \ as well as verifying the identity of the contracting parties. Thus, it cannot,\
  \ or very rarely, happen that a property is sold which is not in the undisputed\
  \ ownership of the seller. However, if it does happen, the real estate company's\
  \ liability insurance guarantees reimbursement of damages to the injured parties.\n\
  According to the petitioners, such an arrangement would also result in a significant\
  \ increase in the amount of VAT paid to the State by the real estate company for\
  \ each invoice issued in the transfer of ownership. The petitioners also propose\
  \ that the tax on the turnover of immovable property be raised to 3,5 %.\nHaving\
  \ examined the proposal, we reply that we do not agree with the proposed solution,\
  \ which we justify below.\nThe Law on Real Estate Business (Official Gazette of\
  \ the Republic of Slovenia, No 50/2006, 72/06-UPB and 49/11) sets out the conditions\
  \ for both real estate companies and real estate agents to carry out brokerage activities\
  \ and lays down rules for safe and diligent conduct of real estate brokerage business.\
  \ However, in the event that the property is sold by an investor who is a legal\
  \ person or a sole proprietor building for the market, the law expressly provides\
  \ that the investor must ensure that the sale is made by persons who meet the conditions\
  \ for carrying out the business of brokerage.\nThe fundamental purpose of the Law\
  \ is to enable real estate brokerage to be carried out as carefully as possible\
  \ and, above all, safely. Certainly, the individual who enters into a brokerage\
  \ contract with a real estate company is assured of the security of the transaction,\
  \ especially since the law expressly provides that both the real estate company\
  \ and the broker must take care to protect the interests of the principal and to\
  \ verify the legal and factual situation of the property for which they are brokering.\n\
  It is left to the free will of each individual to decide whether he or she wishes\
  \ to conclude a transaction through a real estate company or a broker registered\
  \ in the directory of brokers or to carry out the transaction himself or herself.\n\
  In our view, any change in the rules to the effect that legal transactions in the\
  \ transfer of ownership may be carried out exclusively by a professional licensed\
  \ by the State and insured for liability would constitute an excessive interference\
  \ with the individual's free will to choose. We also consider that such an obligation\
  \ would also have an impact on property prices.  \nResponse from the Ministry of\
  \ Finance\nThe legislation on real estate transactions or brokerage, as you yourself\
  \ have indirectly noted, allows sellers and buyers of real estate to freely choose\
  \ whether to sell or buy a property through a broker or otherwise. By making their\
  \ own choice, individuals naturally accept all the risks that may arise, which is\
  \ why we believe that such a regime is appropriate and fair, as it always allows\
  \ the parties to have a choice and thus to be able to adjust the transaction costs\
  \ to the specific situation.\nFrom the point of view of the tax rules, we would\
  \ like to clarify that the taxation of the transfer of title in a specific case\
  \ depends on a number of factors, in particular the type of property involved (land,\
  \ buildings, etc.) and whether or not the seller is subject to VAT. Depending on\
  \ this, VAT is charged on the sale value or the seller is liable to pay real estate\
  \ turnover tax. Any VAT on the services of the estate agent (if the estate agent\
  \ is of course liable for VAT) represents only a small part of the taxable income\
  \ of the real estate transaction, as VAT on the services is only payable on the\
  \ amount of the agent's commission. The real estate turnover tax in Slovenia is\
  \ 2%. The rate is considered appropriate. The desire is to maintain a low rate which\
  \ does not encourage concealment of the tax base while still ensuring adequate tax\
  \ revenues. A possible increase in the rate of the real estate turnover tax is not\
  \ considered in the current circumstances."
response date: 2012-06-15
response due date: null
sent date: 2012-03-28
title: Real estate - transfer of ownership
upvotes: 19
url: https://predlagam.vladi.si/predlog/2666
