Why invest in Croatia Real Estate?
Tourist stats show why Croatia is so popular: 6.000km of beautiful Coastline, 1100 Islands, around 300 days of sunshine are definitely inviting reasons to spend holidays or live in this Mediterranean country. Aside of natural beauty, nice weather and charming people, Croatia is considered as one of safest countries in Europe. Numbeo shows that crime rate Very low, 18.36 out of 100. Croatia has population of 4 million people and around 20 millions tourist visits per year (except 2020. – due to Covid19 pandemic) and constant growth of numbers in tourism which will keep raise Real Estate prices and increase returns on those assets which are renting or leasing. Projected growth of tourism and real estate will depend on world and EU economy, but is projected to have stable and constant growth on a long-term period considering business climate, economical and financial background, as well as political integrity with EU and Balkan countries.
Croatia is part of EU from 2013. and will become part of Schengen zone till 2023. as negotiations are finalizing. Official currency is still Croatian Kuna (HRK), but together with joining Schengen zone, Croatia will accept Euro as official currency which will make easier all financial transactions. Croatia is also part of NATO, to keep it sovereignty and protects its borders in case of possible interventions. Political structure inside Croatia is stable and democratic. Investments in Croatia can be considered safe on a long-term investments without worrying about political destabilization which can effect on complicated structure of investments. Surrounded by all EU/Schengen countries on the west and north, Croatia has non-EU border between Bosnia and Herzegovina, Serbia and Montenegro.
Croatian GDP is growing, mostly due to Tourism and Construction. Tourism is around 20% of total GDP and is becoming the most important sector in Croatia. Government is investing more than 10 Billion Euro in infrastructure projects to maintain good trends in Tourism and Real Estate. Investments in Croatia are connected with tourism and high returns on investments in Hotels, Villas and Luxury resorts. With positive trends, especially in the past 5 years, investments in Croatia seem like an perfect choice. Following tourism, construction and real estate markets are following and leading the Country’s economy. As one of the most popular countries in the world to live and work, real estate development is constantly growing.
Location and infrastructure
Croatia is Mediterranean country considered to be in Central Europe, or South-Eastern part of Central Europe. Croatia has longest border to Bosnia and Herzegovina. Considered to be getaway to 500 million potential consumers living in Europe. With popular airports in Zagreb, Split and Dubrovnik, with more than 3 million passengers per year, Croatia is considered to be border between Western and Eastern Europe. With long coastline and ports in Pula, Rijeka, Zadar, Split, Ploce and Dubrovnik Croatia is extremely well connected for transporting people and cargo overseas. Roads are well maintained and Highway A1, connecting Zagreb with Dubrovnik (Dalmatia) is considered as one of the best in Europe.
Business climate and taxes
Croatian government is working a lot to become more attractive to investors with 0% profit tax in designated free trade zones, customs free for EU members, avoidance for double taxation with 55 countries and cash incentives for new employees. There is no Real Estate tax, only except when you are buying your Real Estate from private owner, which is 3% only once. Croatia has access to 1 Billion Euro worth projects and investments through EU funds. and is actively working to get more projects and develop local communities and economy in general. Croatian VAT is 25% and is considered as one of highest in EU, but real estate taxes are on of the lowest in EU.
Private type of investment
Buying Real Estate in Croatia has higher returns and constant rise of prices with both combined has ROI of around 8 – 10% Depending on type of investment and location investors won’t have ROI below 5% which is pretty high comparing other European countries. Most of investors are buying real estate to close few weeks for private enjoyment and rent rest of the year to tourists and have decend earnings.
Buying, holding and selling real estate will have lower earnings, but can still brinig significant profit on long term.
Renovation business is extremley popular amoung real estate in old towns, and can bring 30% profit in process of buying, renovating and selling real estate.