Here we give you the answers to FAQ concerning purchase of real estates in the Republic of Croatia. In Croatia we have plenty of legal acts and laws concerning traffic of real estates and in connection with real estates in general. It is not our intention to bore you with the local legislation, but to give short and simple answers on issues that might be of interest to you. In case there is questions that are not contained here, feel free to contact our agency directly.
WHICH DOCUMENTATION IS TO BE PRESENTED BY THE CUSTOMER WHEN PURCHASING REAL ESTATES IN CROATIA?
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.
ARE FOREIGN CITIZENS ENTITLED TO PURCHASE REAL ESTATES IN CROATIA?
Yes, but after 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 first a sales contract is to be signed with the selling party. At this phase the contract does not have to be verified before a public notary jet. 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. Foreign citizens that establish, or already have an established company in Croatia, can purchase real estates on behalf of this company.
ARE FOREIGN CITIZENS ENTITLED TO SELL REAL ESTATES IN CROATIA?
Foreign natural or legal persons can without any problems sell real estates in Croatia.
WHAT IS THE REAL ESTATE PURCHASE TAX IN CROATIA?
The Republic of 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, tax on purchase of real estate is paid by the customer or the seller on behalf of the customer, if the parties agree upon this.
WHAT IS THE TAX IN CASE OF EXCHANGE OF REAL ESTATE?
The same, 5%, but here each of the real estate owners pays 5% of the value of his real estate as tax.
WHEN MUST THE REAL ESTATE PURCHASE TAX BE PAID?
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 are charged for every day of delayed payment.
DOES THE SELLER HAVE TO PAY TAXES WHEN SELLING HIS REAL ESTATE?
No. Only in case 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.
MUST THE CUSTOMER (ALONG WITH THE SELLER) HAVE TO VERIFY HIS SIGNATURE ON THE SALES CONTRACT?
He may, but doesn't have to.
HOW MUCH DOWN PAYMENT SHOULD BE PAID AT THE CONCLUSION OF A SALES PRE-CONTRACT OR CONTRACT?
Usually the down-payment is 10% of the sales price or different if agreed so between the contractual parties.
IS IT POSSIBLE TO CONCLUDE AND VERIFY A SALES CONTRACT ABROAD?
Yes, 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.
IS IT POSSIBLE TO PAY THE REAL ESTATE PURCHASE 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.