Hello there, welcome to UrgentDigital.com! In this article, you will find all the details on how to buy a property in Slovakia as a foreigner (non-EU). I am sure you haven’t been so optimistic about purchasing a home in Slovakia as you are an outsider (legal aliens!). But believe me, this is possible with the help of the best mortgage assistance company around, Hypomo!
In this informative article, I will be guiding you through the whole process and also provide you with an honest Hypomo review. So grab yourself a cup of your favourite drink and start reading! 🙂
Unfortunately, due to misinformation that is spread around mostly by foreigners, most people think foreigners who have moved to these countries will never be able to buy properties. However, it is far from the truth!
Can foreigners buy property in Slovakia?
Foreigners can definitely purchase properties and real estate in Slovakia regardless of having a residence or not. The only exception is that foreigners can not buy and own agricultural land, forests and other property of special interest to the Slovak state, as specified by law. So to sum up, yes, foreigners can buy real estates such as flats, houses as well as garages, gardens and lands.
Before I was informed that this would never be possible, I had also believed that unless I have all the cash I need in my bank account, I would never be able to buy a flat. But in a couple of months, after I initiated my mortgage and real estate application with Hypomo, I became an owner and have been living in my humble flat in beautiful Dubravka!
Can foreigners get a mortgage in Slovakia?
Yes, absolutely! As I have just mentioned above, I thought this was impossible due to misinformation and lack of self-research. As a non-EU resident, I was told that I might be able to apply for a mortgage only when I acquired my permanent residence.
I started thinking about this but couldn’t really take any action, as I would never be able to save enough for a downpayment due to increasing real estate prices and having not-so-great salaries.
Also, your choice of bank when you first come here and open an account may impact your thinking and planning along your journey to purchasing your real estate in Slovakia. On my second day in Bratislava, I directly visited a Tatra Banka branch next to my office building and got my account ready in half hour. They helped me to set up my account and they were able to speak English (that was the reason I preferred this bank).
However, later on, when I was thinking about buying a property, I contacted them several times but they clearly told me until I got my permanent residence, I would never be able to get a mortgage!
If this is what you are experiencing, don’t worry! Here I am, a real example of going through all these hurdles and already bought my property!
How do I get a mortgage in Slovakia?
In the past, banks were allowed to provide mortgages up to 100% that would cover the whole price of a flat. Unfortunately, this is not going to happen anymore.
At the moment, banks can provide mortgages up to 90% of the flat price. Meaning, that in the best-case scenario, you will need the downpayment that will cover at least 10%.
This was another thing that put me off from buying my property as I thought I would hardly save this amount with my current salary in 5 years, let alone increasing flat prices that would also impact the downpayment amount I would have saved until I get my permanent residence.
However, you should not worry about this either! 🙂 If you have a stable job and a clean financial background, chances are you will be able to get your mortgage and a loan including some extra cash that you may use for your new property.
What is the maximum amount of mortgage I can get?
Before I learnt all these details in the mortgage process, I used to think that I could get any kind of mortgage amount and would pay it back in a very long duration. So I even started looking for flats that would cost around €150000 to €175000. But I was wrong!
I did some research on this and then also got the results from my mortgage application. You can take the below numbers as a reference and you may be able to kind of guess what the possible scenario would be like for you.
So basically, if your salary is €1000 (net), you simply multiply this number by 12 and then by 8.
Potential maximum mortgage amount = €1000 X 8 X 12 = €96000
Now, this number as we discussed above may only cover up to 90% of the flat price. Let’s assume, you are eligible to get a mortgage for 90% of the flat price and the flat price is €110000.
If we calculate 90% of the flat price, we end up with €99000 meaning that the amount of mortgage you can get in the best-case scenario can not cover the full 90% of the amount.
So basically, you will need to cover the rest of the amount meaning you will need €14000! Now, that may sound demotivating as saving this amount in Slovakia is not an easy task unless your salary is pretty high and you have been very careful with your spending.
That was what exactly put me off for some time as I would never be able to save that amount in years. Mind you, I’m just giving you a very basic example with pretty low flat prices. In reality, flat and house prices are increasing regularly and you will probably need to do your own research and estimate the scenario for your own needs.
I would highly recommend you check out the best website for real estate properties in Slovakia here, this way you can get a good grasp of the current real estate market and adjust your expectations based on your own personal income reality! 🙂
But don’t be discouraged! I was in the same situation, I had almost no money for a downpayment! However, I have become a flat owner. 🙂
How do banks determine the mortgage amount?
As you may know, banks need to calculate their risks while lending money to us. One of the most important aspects of it is that you have a stable job and a stable income that you can prove.
What they require from you is that you have to prove your income in the last 6 months and they will take the average of it.
A quick tip: If you work in a corporate company where you may be eligible for bonuses, try to plan your mortgage application within that time frame.
If you asked me “Did you plan this in advance and apply for a mortgage?“, I would say no! 🙂 But I was very lucky!
Once I signed up for Hypomo and initiated the mortgage process, they informed me that the bank needed to know my income for the last 6 months. Luckily, we had a nice bonus for the first time within that time period.
I immediately got the income confirmation from my company. This unexpected bonus caused a huge peak in my average salary per month which also signalled the bank that I would be able to make enough to cover a solid range of monthly payments.
How do banks determine flat prices?
As you may guess, banks need to get expert advice on flat prices. Since the real estate market is usually on the rise, sellers can easily adjust the flat prices based on the market.
In order to be sure, banks require you to get the flat you’re interested in checked by respected evaluators. As evaluators are also humans, they are prone to making errors and mispricing flat prices, thus altering the risk to banks.
For these reasons, evaluators have to be really careful with their pricing of properties meaning that in case they fail to price flats multiple times and cause issues, they may get banned from the system.
Therefore, you should only be working with the best evaluators around. Hypomo will provide the best option for you, so you don’t need to worry about that.
If you want to find out more details about the process steps, please read on! 🙂
Hypomo Review
As I mentioned at the beginning of this article, I got the mortgage and real estate assistance service from Hypomo company. Hypomo is a very young and dynamic company founded by Mark Flores Martin and Monika Bereczova. Their fame has been spread around by their happy customers!
Now, this is crucial. If you know about marketing, you are probably aware that the word of mouth is one of the strongest parameters you should be looking at to determine a successful brand. Almost all the people I know who bought properties recommend Hypomo to one another with extremely positive comments!
Hypomo is a registered financial agent of the National Bank of Slovakia and they got their first investment from MKB Bank Hungary.
Believe it or not, Hypomo is 100% free if you are OK with dealing with regular real estate processes on your own. They work with banks on a commission basis, so you don’t have to pay them anything.
However, they also offer basic and full services that include every process step with regard to buying a property.
Now, this is where Hypomo shines. If you are like most of the foreigners in Slovakia, chances are your Slovak still sucks. Most of the outsiders I met could only get by with their Slovak language skills, let alone visiting a bank branch and discussing financial terms as well as going through all the challenges while buying a property.
Since I was in the same situation and pretty worried about how I could achieve these on my own, I requested their full service.
Their full service costs 1.5% of the flat price you will purchase. In my case, I got my flat for €133000 and I was going to be charged €1995.
For some people, this may not make sense as it is a huge amount of money, but if you are a foreigner who can not communicate well in Slovak, you should definitely consider buying their full service.
I will be providing you with my full experience with the company and all details you need to know here below, however, the best thing to get started is simply to visit the Hypomo website and then roughly enter the estimated flat prices and monthly payments range you are aiming for.
Urgent action: You are free to enjoy the article and find out all the details about this process. However, I urge you to take immediate action and already create your account at Hypomo as the real estate market is extremely fast moving and usually, it’s not in your favour!
Once you have completed this step, you will be asked to provide your basic details so you can initiate contact with Hypomo.
After this step, you will be asked to upload supporting documents as well as fill in some information about your profile.
Even though you may prefer to complete all these steps and wait for their response, I will tell you what I did. I just simply signed up with Hypomo, then sent them an email, that was it!
They immediately got back to me and I was invited to an online session where I met with Hypomo and then they simply required me to fill in some information and upload some of the documents to my Hypomo account.
Since I wanted to benefit from their full service, I had to sign a contract with them and we got this done really quickly by digitally signing it, very cool! 🙂
Wait, my bank told me I wouldn’t be able to get a mortgage until I get my permanent residence?
Now, if you remember what I mentioned above, your current bank may not allow you to apply for a mortgage. This was exactly my case and I was worried about it. However, Hypomo quickly reviewed the situation and found the best rates at VUB Banka.
Later on, I was invited to their office and had a quick session with them, basically filling in some documents from the VUB Banka along with my already shared proof of income.
From this moment, the fun part began! I was then asked to fill in a questionnaire and indicate some basic information regarding the flat I would prefer. In a couple of days, Hypomo started adding potential flats based on my input on my Hypomo account where I could check all the details, and comments from Hypomo.
After a few attempts and one apartment view arranged, I didn’t want to go with the current options. Eventually, I got one small flat in Dubravka and immediately arranged a view.
We met the seller’s real estate agent along with Hypomo representatives. I must say even though the apartment was old, my flat was pretty well-renovated and maintained.
You have found your flat, what’s next?
From this moment, the most important thing to do is to show how serious you are with your purchase. While I was checking my flat, there had been already five people viewing it on the same day and there would be another person who was willing to check it after me.
Urgent action: As you will gain a pretty solid benchmark of prices, locations and conditions of different flats, I urge you to take immediate action when you feel like this is the flat you want to buy! Once you get this feeling and decide, you shouldn’t even waste a couple of hours to take action and secure your interest in the flat!
Basically, when there’s too much demand for a particular flat, chances are the flat will be taken by the fastest responder. So the first thing I did was to send the reservation fee to the seller with an initial contract.
Get Your Flat Checked by a Trusted Evaluator
Within the same week, I was suggested to get my flat evaluated by an expert. Hypomo also provided me with a trusted evaluator who was able to communicate in English. I paid €160 to the evaluator and he got back to me in a week or so, informing me about the parameters he checked.
Note that, the evaluator’s fee is paid to evaluators directly and Hypomo doesn’t have any control over this and they don’t profit on this payment.
Luckily, the price set by the seller exactly matched what my evaluator calculated. This means that when this information is shared with the bank, it’s another good signal to the bank that the buyer is going for a reasonable option that is aligned with market conditions.
While I was arranging the price evaluation, I also checked the estimated flat price on Nehnutelnosti.sk. I must say the estimated price that was calculated on the website was a bit lower than the reality, however, you can use this to get a general idea.
Mortgage Approval
In the meantime, Hypomo already initiated the mortgage at VUB Banka for preapproval along with the evaluator’s shared pricing.
In about three weeks, I got a message from Hypomo that my mortgage and consumer loan were approved! 🙂 It was exactly how I wished it to be!
Hypomo helped me get the mortgage for 90% plus a solid consumer loan that would allow me to pay the rest of the flat fee and also invest in my new place!
I visited VUB Banka with Hypomo and they helped with everything from setting up my account to understanding all the documents that I signed (many documents to sign, be prepared!).
As the mortgage money is not something that is transferred to your account, I was expected to pay the rest of the money lent to me. So I transferred the amount directly to the seller. During these steps, I visited VUB Banka several times with Hypomo, the seller and his real estate agent to sign the last contract so the mortgage amount could be cleared.
Once all the payments and mortgage were transferred to the seller along with the ownership change application, the only thing I needed to do is to arrange the handover with the seller.
Ownership Change
While I was completing most major steps in the process, there was also an ownership change process which we had applied. So basically this means, the seller and the buyer agree to sign a document for cadastre changes indicating the ownership would be transferred to the buyer.
Now, this usually takes a bit longer time than the rest of the process. Even though I had already moved to my new place and started to settle, then went for a holiday, I was still not the owner. 🙂
At this stage, you can track the ownership change at Kataster Portal
Property Handover
Once we cleared all the payment-related steps, I was ready to arrange the handover with the seller. I was so lucky that the seller turned out to be an English teacher that helped me a lot. There are a couple of things to manage here at this stage.
Apartment Management
First, we met at the apartment management company’s office and dealt with the handover. If you have no idea why you would need to deal with an apartment management company, here are some useful information.
In Slovakia, all the apartments you see are managed by private companies. This basically means those companies manage everything about the apartment blocks and you pay them a fee per month in advance. These payments usually cover your hot/cold water, heating, apartment electricity, lift maintenance, cleaning, waste management and many more items.
When this was handed over to me, I started taking on the payment responsibility and started sending them that upfront monthly fee. The cool thing about this upfront payment is that if you are not overconsuming these resources, you will get reimbursement at the end of the year!
Expect to pay around €100 to €200
When I was just about to get my keys and start moving to my new flat, we noticed that there were some stains caused by some water leakage in my bedroom. Unfortunately, while I was viewing the flat, I couldn’t spot this as there was a bed next to the wall. If that happened in my country, I would just investigate and find someone to get this fixed. However, as in Slovakia apartments are managed by private companies, and they need to investigate and take action if necessary.
Fortunately, the seller was a super helpful person and he had competent people from his family who could fix these. Once we got the approval from the management company, they spotted the issue and took immediate action! 🙂
Electricity
The subscription for electricity is also managed by private companies in Slovakia. The company that was providing electricity to my apartment was ZSE, we simply visited their branch with the seller and quickly completed the handover.
Expect to pay around €20 to 30€
Now, I’m not 100% sure if the same system mentioned above applies to electricity because, in the beginning, we set up a monthly fee to be withdrawn from my bank account. I will update this part in case I will get reimbursement or have to pay extra! 🙂
Gas
The subscription for gas is managed by another company called SPP. Taking over the gas subscription was a bit problematic, we couldn’t really do it together with the seller so I kept contacting the company online. But usually, these companies can not serve you in English.
Expect to pay around €5
However, I attempted to arrange an online session with them and forgot to join the meeting (accidentally set that up too early in the morning), and they kindly called me to join the session. So I used to opportunity to ask for help in English and got an email address of an employee. He kindly helped me to complete the transfer and provided me with the details to set up automatic payments.
Internet
As there was no internet connection at my flat, I had to start a new contract with UPC company. Even though there are many complaints about internet providers here, I quickly checked the whole Wi-Fi connection in my apartment and noticed that people used UPC exclusively.
Expect to pay around €20 to €30
That at least meant they have a solid connection here in Dubravka. However, once or twice per year, I got an issue for a day with the connection, and then they somehow fixed it! 🙂
How to Submit Real Estate Tax in Slovakia?
As you may already guess, once you become an owner of a property, you are required to declare ownership and pay the real estate tax. It’s actually pretty simple to do, but at first, you may feel like you are lost with the process.
There’s a single PDF file around that you need to fill. In order to make your life easier at this stage, here I’m sharing it with you along with the instructions on how to fill this in properly. You can download the Slovak real estate tax form and the instructions here.
Tax authorities will calculate the amount based on the floor area and send you an email with payment instructions. For a small flat like mine (42 square meters), I paid €37 per year.
The whole process took me around 3 months to complete. Given the fact that one should also evacuate their current flat, arrange all the relocation and deal with every step I have mentioned above, it was pretty much lightning fast! Without Hypomo, I would never dare to do this on my own! I definitely recommend anyone Hypomo with 100% confidence, they will never let you down!
I hope this has been a helpful and detailed article for you. I wish you the best of luck on your quest to purchase your real estate property as soon as possible!
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Good luck! 🙂