Croatian Real Estate Law

Below are information concerning purchase of real estates in the Republic of Croatia. In Croatia there are plenty of legal acts and laws concerning real estates. This document is to provide some information about Croatian real estate acts and laws - this information is only meant as a guide to provide short and simple answers to most issues concerning Croatian real estate laws. In case there are questions that are not contained here, feel free to contact our agency directly.

Purchasing Real Estate In Croatia

When purchasing real estates in Croatia, you must provide proof of Croatian citizenship, either in form of citizenship certificate, passport or personal identification card. A copy of any of the above is accepted in case the original can be shown simultaneously. Foreigners can also purchase real estate in Croatia if:

1.

They establish, or already have an established company in Croatia, can purchase real estates on behalf of this company.

2.

They got prior consent issued by the Ministry of legal affairs and the Ministry of foreign affairs. These statements on consent are issued to citizens of those countries Croatia signed a contract on reciprocity with and in extraordinary cases, to citizens of other countries as well. The procedure of obtaining the statement on consent is as follows:

When a foreign citizen decides to purchase real estate in Croatia, a sales contract must be signed with the selling party. At this phase the contract does not have to be verified before a public notary. Together with respective documentation, this contract is sent to the Ministry of foreign affairs in Zagreb. When the Ministry issues to the customer its statement on consent, the foreign citizen is entitled to register the real estate onto his name at the Municipal court Cadastry department, and pays the real estate purchase tax.

Selling Of Croatian Real Estate By Foreigners

Foreign natural or legal persons can without any problems sell their real estate property in Croatia.

Real Estate Purchase Tax

The real estate purchase tax in Croatia has a unified tax rate of 5% for all types of real estate and respective transactions. The tax is defined based on the price of the real estate in the sales contract and the value estimate by the authorized tax authority in charge for the area in which the real estate is located. According to the Law, if the seller can pay tax on purchase of real estate on behalf of the customer if the both parties agree upon this.

Tax For Exchange Of Real Estate Property

It is 5%, but here each of the real estate owners pays 5% of the value of his real estate as tax.

Payment Of The Real Estate Purchase Tax

After conclusion of the sales contract the customer is obliged to register the purchase at the authorized tax authority within 30 days from the day of conclusion of the contract. Public notaries do also submit one copy of the sales contract to the tax authorities. The customer is obliged to pay respective real estate purchase tax within 15 days from the day of reception of the decision received from the tax authorities on the exact tax amount. If this tax is not paid within this term, interest on arrears is charged for every day of delayed payment.

Real Estate Taxes

When Selling Real Estate The seller does not have to pay his/her real estate taxes when selling his/her real estate. It is paid only when the real estate is sold prior to the expiration of three years after it has been purchased and if sold at higher price than originally purchased. In such a case the seller has to pay a 35% income tax on the difference in value of the real estate (purchase and sales price) increased for local taxes, different in every municipality.

Verifying Sales Contract Abroad

It is possible to verify the sales contract abroad. In such a case it is the best to have it verified in a Croatian embassy or consulate. If you verify such a contract before a public notary, then this verification has to be translated into Croatian by an appointed courts interpreter.

Payment Of Real Estate Tax In Foreign Currency

The tax is to be paid by bank or post office money transfer. The amount is converted into Kuna at the middle exchange rate by the National bank of Croatia at the day of payment.