Subsidies for renting real estate

Subsidies for renting real estate

Dated: 16.11.2020

The Government of the Slovak Republic, through the Ministry of Economy of the Slovak Republic, will provide subsidies for the lease of real estate and market places. The subsidy will be provided to such tenants who have been prevented from using the leased object as a result of extraordinary measures taken in connection with the spread of COVID-19 (by concluding the leased object, interrupting teaching in schools and school facilities) or substantially restricted by banning the public from being present (catering services, discos).

The landlord shall lodge an application for a subsidy on behalf of the tenant for the period of "difficult use"

Period of difficult lease during 1 wave – addition

Type of Operation

The Beginning 

The End

Mass events over 1000 people

01.08.2020

30.09.2020

Mass events over 1000 people indoor

10.09.2020

30.09.2020

Swimming pools and water parks (presence of more than 1000 people at the same time)

18.09.2020

30.09.2020

Discos, dance parties, etc. in restaurants, bars, nightclubs, etc.*

18.09.2020

30.09.2020

* weddings, funerary and christening parties up to 150 people allowed

The amount of the subsidy can reach up to 50% of the rent. However, its amount directly depends on the discount provided to the tenant by the landlord.

If the landlord provides the tenant with a 50% discount, the remaining 50% will be paid by the state and the tenant will not pay anything. If the landlord provides only a 20% discount, the state will contribute the same share and the remaining 60% can be paid by the tenant in installments spread over 48 months. If the landlord does not discount the tenant, the tenant can pay the rent spread over 48 months.

The motivation for landlords to provide a discount is the fact that the same amount will be paid to them sooner through a subsidy. Otherwise, they will have to accept the payment of rent spread over 48 months, during which time they will not be able to terminate the lease or increase the rent. Therefore, if the landlord provides a maximum 50% discount, he will receive the other 50% from the state, but will not be bound by the protection of the lease for another 48 months. 

If the tenants have already paid the rent in the meantime, they will be able to draw the subsidy for the same period as they paid the rent. For example, if tenants have paid rent for 6 weeks, they will be able to claim the subsidy for rent for 6 weeks after the law enters into force. The first installment of the repayment schedule shall take place on the 15th day of the relevant calendar month, starting on the 15th day of the calendar month following the calendar month in which the emergency situation ended (unless they agree on a different due date).

Rent-related payments (for energy supply and other services) will not be included in the rent subsidy. If the amount of rent depends on turnover, the turnover component cannot be included either. If the rent also includes payments for services related to the rent, the rental subsidy will be reduced by 5% of the amount of the rent. Value added tax payers cannot consider VAT as an eligible expenditure if they can claim a deduction of VAT. It will be possible to provide the subsidy not only for the interior of buildings, but also for related storage and service areas (parking places), as well as for market places.

Eligible applicants are lessors - natural and legal persons, entrepreneurs and non-entrepreneurs. The landlord must have an active electronic mailbox via slovensko.sk.

Procedure for submitting a grant application

It shall be possible to apply for the subsidy only electronically, using an application created for that, which is available on the website of the Ministry of Economy. The application on the form will be submitted by the landlord on behalf of the tenant, but on his own account. Such a form containing the electronic signatures of the landlord and the tenant has the same effects as the agreement between the landlord and the tenant to provide a discount on rent and to waive the performance of the rent subsidy to the tenant in favor of the landlord. The landlord fills in the application and sends it to the tenant's electronic mailbox in slovensko.sk. After the form is signed by the tenant, the application goes to the system of the Ministry of Economy. The tenant is obliged to provide the landlord with the necessary cooperation for drawing the subsidy. 

If the required amount of the rental subsidy exceeds the value of EUR 100,000, the application must contain an indication of the ultimate beneficial owner.

Applications for rental subsidies can be submitted from 24.08.2020 to 30.11.2020. 

At the same time, the Ministry of Economy is working to ensure that the system of rent subsidies can continue even after the end of the current call. The aim is so that entrepreneurs affected by the second wave of the pandemic can also ask for help.

The conditions for the provision of the subsidy also apply to the sublease.

Author:

JUDr. Mária Porubská Tökölyová, advokát