Frequently asked questions

Buying property in Croatia can be a great investment opportunity for its tourism potential. It is a very attractive spot for expats, real estate investors, entrepreneurs, and retirees from all around the world. Croatia is a really safe place to live. Croatia's picturesque landscape is dotted with beautiful islands, sun-kissed beaches, lush green countryside, and historical monuments, making it a preferred real estate investment destination.

Anyone from other EU countries can purchase and own Croatian property provided it is in a designated building zone. Private EU individuals have all the same rights as local purchasers.

Citizens outside the EU are allowed to buy with these same rights with the consent of the Ministry of Justice, provided the country (or state - if from the United States) has a reciprocity agreement between the Republic of Croatia and the country in question.

• Buying property as a private person:

This option is available to all EU nationalities without restriction.

Other nationalities may be allowed to buy, providing that their country is on approved list, in case of which they will be able to register ownership after getting a consent from Croatian Ministry of justice. The process of application may begin once you sign and fulfil the sale-purchase contract, not the precontract. If you are of non-EU nationality, please contact us to find out whether you can buy property in Croatia this way.

There is no capital gains tax, unless you sell the property within 2 years from the date you bought it.

• Buying property through Croatian company:

This option is available to all nationalities. It is also the only possible way for nationalities not belonging to EU or not being on approved list to get a consent from Croatian Ministry of justice. In some cases buyers may decide to continue this route nevertheless, especially if they are planning to develop a property or rental business in Croatia. Setting up limited liability company is an easy process and will cost you around 2.500 EUR for incorporation capital, 500 EUR for the notary public and the court plus service fee for the lawyer. You will be appointed as an owner and director of the company, but do remember that the property will be owned by your company – being a legal entity, it will be subject to corporate laws and taxes. In addition, an accounting service will have to be contracted.

The seller’s lawyers will usually collate all information relating to the property and send it to the buyer’s lawyers together with a draft sale and purchase agreement (contract). The buyer’s lawyers will undertake thorough due diligence of all legal documents relating to the property and will provide their own comments on the draft sale and purchase agreement.

If financing is not in place or there are identified issues with the property that the seller has to remedy before the transfer occurs, the parties may first enter into a pre-agreement, undertaking an obligation to enter into a final sale and purchase agreement once the identified issues have been cleared/financing has been approved.

After all of the sale and purchase terms/conditions have been agreed and there are no further issues between the parties, the execution of the agreement can occur. A sale and purchase agreement with reference to real property has to be executed in writing – usually it is a single document signed by both parties. Additionally, the signature of the seller has to be certified before a Notary Public so that the agreement may be registered at the Land Registry.

Following the execution of the sale and purchase agreement, the buyer’s lawyers are required to register the transfer at the Land Registry. Real estate transfer tax needs to be paid.

It is really important to gather expertise of the experience professionals.

Checking the records on a piece of real estate is a vital step in the purchase of property. Doing so can help you avoid a messy negotiation or inheriting burdens that have nothing to do with you. Check how the real estate is zoned (residential or agricultural), as the the zoning information is not included in the public information.

Before foreigners can finalize the purchase real estate in Croatia, they must get permission from the Ministry of Justice to buy the property. EU/EEA citizens can skip this step as they do not require consent from the Ministry of Justice.

In Euro, as this currency has been introduced in 2023, January the 1st.

For private (individual) sellers, provided that the property has been owned for more than two years, then the seller does not pay tax on any profit.

Should the property be sold within the first two years, then a ‘Capital gains tax’ of 20% is paid on the profit.

This tax is not payable within the two years, if the property was sold, and had been used solely as a private residence by the seller or his close family, throughout this time.

If the property was bought ‘off plan’ it is the land which is being bought/sold then the time starts when the ‘certificate of occupancy’ is issued, rather than when the purchase was made.

There are also tax liabilities for developers where three or more similar properties are sold within a five year period. We can put developers in touch with accountants who will examine individual developments to assess the likely tax implications.

Please note that for companies selling the property different tax rules apply.

For more on this please contact us and we will introduce you to relevant tax and accounting experts.

• All advertised property prices represent values wanted by the sellers. If particular property is in the VAT system, VAT is already included in the asking price, unless stated otherwise. When buying a property in Croatia, every buyer should be aware of additional costs on the top of the finally agreed price - our brokerage commission, lawyer's fee and real estate transfer tax. Those costs may vary from 5% to around 8% of the property price, as described below. Please make sure to calculate them in your total budget to avoid unpleasant surprise.
• Brokerage commission – 3%+ VAT
• Legal fees – 1%+VAT: Legal fees include the work performed by the lawyer to investigate the title, legality, draw precontract and/or contract and apply for the ownership registration in your behalf. The fee is 1%+VAT from the finally agreed property price. Half of the lawyer's fee is paid upfront (before the precontract is made) and the other half when the application for the ownership registration has been submitted.
• Real estate transfer tax – none or 3%: Real estate transfer tax (equivalent to stamp duty) is 3% and paid by every buyer (domestic or foreign). Notary public will send the tax application automatically when the sale-purchase contract is notarized. You may expect to receive Tax payment order quite quickly which you will need to pay within the following 15 days. Property sold by private entity (person out of VAT system) or property built before the implementation of VAT (1 January 1998) will be taxed with 3% rate. Property sold by VAT-registered entity, built between 1 January 1998 and 31 December 2014, will be taxed with 3% rate. However, the basis of tax assessment shall not be the entire value of the property, but only its smaller portion related to the value of the land and infrastructure contained in the price. This is because the construction itself has been taxed with VAT (which you will pay through the property price). Property sold by VAT-registered entity, built after 1 January 2015 will be entirely taxed with VAT (which you will pay through the property price). Therefore, no real estate transfer tax will be applied.