How to buy property in Croatia
How to buy property in Croatia
Guide about the Croatia property market
The natural charm and a unique way of living in Croatia attract numerous foreign real estate buyers each year. They often come for vacation purposes and fall in love with the destination or recognize a good investment opportunity. That is why the properties on the islands and along the Adriatic coast are an absolute hit.
To those considering buying in the Croatian real estate market but still have some doubts, we suggest gathering information from a reliable source.
Here you can read more about why it would be a great idea to invest in Croatia real estate.
This blog post will cover a few frequently asked questions about buying a property in Croatia and briefly explain the whole process.
Can foreigners buy property in Croatia?
Foreigners are allowed to buy property in Croatia. However, there are different rules for EU and non-EU citizens.
The only types of property that are not available for foreign buyers are agricultural land and forests. The law is expected to last until 2023.
Buying property in Croatia for EU citizens
If you come from any EU country, the same laws as for Croatian citizens apply to you, and you do not have to get any special permits.
Buying property in Croatia for non-EU citizens
For foreign buyers outside of the EU, the process is a bit different.
Citizens of the countries that are not a part of the European Union use the Principle of reciprocity. The non-EU country makes a Reciprocity agreement with the Republic of Croatia, using that protocol to regulate interstate affairs. One of the being property purchases.
The Ministry of Justice and Public Administration has to check the reciprocity and the laws before permitting the purchase finalization.
Can I pay in foreign currency when buying real estate in Croatia?
In Croatia, the main currency is the Kuna and has to be used in all transactions by the law. Although the property prices are often expressed in Euros, Croatia is still not a part of the Euro payment zone. It is expected that Croatia will replace Kuna with Euro by the end of 2023.
There is only one incidence under which is allowed to pay in foreign currency. That can happen if both the buyer and the seller are foreign citizens. Also, the purchase must be made outside of the Croatian borders.
How to buy a property in Croatia?
You have researched everything about the area where you want to buy a property but are not exactly sure about how to do it?
The process of buying a property in Croatia regularly goes in four phases.
The pre-contract agreement is going to be your first step towards owning real estate in Croatia. The contract specifies the price and the date of purchase, as well as the main information about the buyer and the seller. The buyer usually pays about 10% of the agreed price as a safety deposit. The safety deposit is not refundable in case of withdrawal of the purchase, only if it is stated differently in the contract.
Applying for consent
This step is related to the paragraph about the citizens of countries outside of the European Union. As you already read, the Ministry of Justice has to approve the purchase.
The application can be submitted in person or by email and has to contain:
- Legal basis for the acquisition of ownership
- Proof of ownership of the seller/estate agent of the mentioned real estate (not older than six months)
- The certificate of the legal status from the office where the real estate is located (not older than six months)
- Proof of the citizenship of the acquirer or legal status of the legal person
- If the buyer is represented by a legal representative, then the power of attorney is needed
- Proof of payment of an administrative fee (35 kn) and for the decision on the acquisition of the real estate (70 kn)
The ministry has 60 days to accept or deny the request.
Registry of contract
After the accepted request, the next step is preparing the full contract and finalize the payment of the remaining balance.
Next comes the registration of the property purchase with the Land Registry. You submit your purchase documents and pay a fee of 250kn.
You must know that all of your documents have to be accurate! Otherwise, you can get a high penalty.
The contract details must be registered in the Municipal Cadastral Department’s Land books and the purchase tax must be paid.
Among the many questions one may have, this one is surely the most frequent.
What taxes I have to pay when buying real estate in Croatia?
In Croatia, the tax rate for buildings and lands is 5% of the property price.
This tax has to be paid within 15 days of getting the real estate transfer tax certificate. In case you miss the due date, there is a penalty of 17.5% interest rate that will be charged for each day until the payment has been made.
The most important thing when thinking about how to buy property in Croatia is: working with trustworthy people. Having a great lawyer by your side and a reliable agency will save you lots of time and money. Ask your friends for recommendations if they had a positive experience!
Always keep an eye on the documents and always double-check them. Some of the institutions have strict rules and do not tolerate any mistakes that may happen.
While looking for your perfect home, pay special attention to zoning information and the previous ownership. Usually, the buildings in the city core can not be altered externally without the architect’s approval.
The process of buying real estate in Croatia can be exciting and taxing at the same time. Although there are many online resources that you can use to buy a property, the safest route would be a real estate agency. Do not hesitate to contact us for help or any additional questions you might have!