State-supported rental housing
Amendment to the Act on State Support for Rental Housing – extension of the definition of rental housing and amendments to certain acts
The National Council of the Slovak Republic (“SR”) adopted Act No. 77/2025 Coll., which amends Act No. 222/2022 Coll. on State Support of Rental Housing (“Act on Support of Rental Housing”) as well as other acts, including the Act No. 222/2004 Coll. on Value Added Tax (“VAT Act”). The amendment introduces several significant changes aimed at applying the system of state-supported rental housing to a wider range of properties, but also at increasing the availability of the supported rental housing for employees in the SR.
Extension of the definition of rental housing
The amendment allows the inclusion also of buildings the function of which has been changed from a non-residential building to a residential building by its reconstruction in the system of state-supported rental housing. At the same time, the definition of “block of flats” and “rental flat” is expanded to include non-residential premises intended for accommodation and housing in the system of state-supported rental housing. For example, the size limit of at least 20 flats in a block of flats is abolished, which allows smaller projects to be included in the state support system.
Changes in the VAT Act
Changes in the VAT Act allow a reduced 5% VAT rate to be applied also to the supply (or reconstruction) of rental flats, which are non-residential premises intended for housing or accommodation subject to the decision of the building authority. Prior to the adoption of the amendment, the reduced 5% VAT rate only applied to the supply of a building within the state support system, excluding non-residential premises. At the same time, the rental of such a rental flat will be exempt from VAT, without the VAT payer being able to opt to tax such a rental.
The aim of this amendment is to encourage the conversion of unused non-residential buildings into residential buildings, thus expanding the offer of affordable housing and making efficient use of existing premises, particularly in larger conurbations.
Changes to the Labour Code
The amendment also introduces changes to the Labour Code in order to make state-supported rental housing more accessible to employees by increasing the maximum amount of the employer’s contribution to state-supported rental housing to 5.23 € per m² per month. This contribution amount will be automatically indexed annually according to the rate of inflation. The contribution should cover employee’s housing costs more effectively, taking into account rising costs and inflation.
The adopted amendment responds to the need to expand affordable rental housing and make efficient use of existing properties. The extension of the reduced 5% VAT rate also to flats created from non-residential premises intended for housing or accommodation has the potential to accelerate reconstructions and boost the supply of rental flats.
