SLOVENIA Law and Practice Contributed by: Blaž Ogorevc, Miha Štravs and Blaž Murko, Odvetniki Šelih & partnerji, o.p., d.o.o.
7.6 Liens or Encumbrances in the Event of Non-Payment Although possible, it is very uncommon for con - tractors and/or designers to hold an encum - brance over the real estate in the event of non- payment by the investor. Such encumbrance would be possible only upon explicit agreement between the contractor/designer and the inves - tor as the owner of real estate and would need to be perfected in the land register. In such case, removal from the land register would be pos - sible based on a deletion permit issued by the contractor/designer. Individual contractors do not usually hold spe - cific securities against non-payment by the investor. On the other hand, construction con - tracts are commonly paid based on progress, in monthly instalments. Both the contracts and the law allow a contractor to stop the works in case of non-payment by the investor. 7.7 Requirements Before Use or Inhabitation Where a building permit had to be obtained before the commencement of the construction project, it is also necessary to obtain a use permit upon its completion. A use permit is a decision issued by the administrative unit authorising the use of the building. In certain more complicated constructions, a successful technical inspec - tion is also one of the conditions for obtaining the use permit. In instances of certain specific commercial uses, additional permits may also be required.
of real estate is taxed with VAT only if the seller is a taxable person identified for VAT purposes. Moreover, VAT may be applied depending on the type of real estate being transferred and whether the parties opt into VAT treatment of the trans - action. As to types of real estate being transferred, the supply of land is exempt from VAT; however, the supply of (empty) building land is subject to VAT. Furthermore, the supply of buildings or parts of buildings and land on which the buildings are located is also exempt from VAT, unless the sup - ply is made before the buildings or parts of the buildings are occupied or used for the first time, or if the supply is made before two years have elapsed from the beginning of the first use or first occupancy. Nevertheless, if the buyer is also a taxable person identified for VAT purposes with the right to deduct input VAT, the parties may opt into VAT treatment of the transaction, even though the supply would otherwise be exempt from VAT. VAT must be paid by the buyer. However, the buyer may deduct the amount from input VAT and demand reimbursement from the state, making the transaction tax neutral. Conversely, if the parties opt into VAT treatment of the trans - action, the reverse charge system applies. The general VAT rate is 22%. A lower VAT rate of 9.5% is applied to supplies of apartments, hous - ing and other buildings intended for permanent residence, and parts of buildings, if they are part of social policy. If VAT is not payable on the sale and purchase of real estate, real estate transactions are subject to real estate transaction tax (see 2.10 Taxes Applicable to a Transaction ).
8. Tax 8.1 VAT and Sales Tax
VAT is payable in certain (but not all) sale and purchases of real estate. The sale and purchase
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