Slovak Republic’s parliament is considering a draft bill to amend the Income Tax Act concerning capital gains tax exemptions on the sale of immovable property for individuals. This proposed legislation aims to reduce the minimum holding period for tax exemption from income from the sale of real estate, from five years to three years.

The same reduction is proposed for selling real estate acquired through inheritance (successive inheritance) in a direct line or by one of the spouses.

Currently, individual income tax exemptions apply to capital gains from selling immovable properties, such as personal residences or apartments, including any associated land, provided the property has been owned for over five years.

The new draft bill suggests reducing this requirement to three years.

If individuals sell real estate within less than five years of acquisition, they must pay tax on the difference between the selling price and the price at which the property was acquired. This tax rate is 19%, and for that portion of the tax base that exceeds 176.8 times the current subsistence minimum, a tax rate of 25% is applied.

The five-year period is particularly disadvantageous for young families, who are more likely to move because their property becomes too small after some time, requiring them to move to larger spaces. The three-year period is adequate for addressing investment purchases intended for resale at a profit.

If approved, the bill will take effect on 1 January, 2025.

To become law, the draft must be passed by parliament, signed by the President, and published in the Collection of Laws.