LAW OF OWNERSHIP
Any physical or legal person is entitled to property ownership rights
REAL ESTATE TRANSFER TAX ACT
Domestic and foreign physical or legal persons shall be considered equal regarding the payment of real estate transfer tax if not otherwise stipulated by international contract.
HOW MUCH IS REAL ESTATE TRANSFER TAX?
Real estate transfer tax rate is 4% for all kind property and transaction.
WHO IS TAXPAYER?
A taxpayer of Real estate transfer tax shall be the recipient of real estate. A taxpayer of real estate transfer tax in the exchange of real estate shall be every participant in the exchange and this for the value of the real estate that is acquired. A taxpayer of real estate transfer tax in cases of inheritance shall be the legal heir or legatee A taxpayer of real estate transfer tax in the gift or other acquisition of real estate without compensation shall be the recipient of the gift or other person who has acquired the real estate without charge. If real estate is acquired pursuant to a lifelong support contract or a contract for support until death, the provider of support shall be subject to real estate transfer tax.
WHAT IS THE TAX BASE?
The tax base for real estate transfer tax shall be the market value of the real estate at the moment when the tax liability incurs. The market value of real estate shall mean the price of the real estate that is obtained or can be obtained on the market at the moment when the tax liability incurs. The Tax Administration shall, as a rule, determine the tax base of the real estate transfer tax as the market value of real estate pursuant to the acquisition document provided-Contract.
WHEN MUST THE REAL ESTATE PURCHASE TAX BE PAID?
Tax liability shall incur at the moment of the conclusion of the contract or other legal action which serves as the basis for the acquisition of the real estate property. Public notary will send the contract to the Tax Administration office in the territory in which the real estate is located. A taxpayer must pay the designated amount of tax within a period of 15 days from the date of the delivery of the ruling on the determination of the real estate transfer tax.
DOES THE SELLER HAVE TO PAY TAXES WHEN SELLING HIS REAL ESTATE?
No. Only in case of sale, exchange or other transfer of more than three real estate items or more than three property rights of the same kind within a five year period, and in case of sale, exchange or other transfer of real estate within a three years period from the date of alienation of the real estate. In such a case the seller has to pay a 35% income tax on the difference in value of the real estate purchased and sold.
ARE FOREIGN CITIZENS ENTITLED TO PURCHASE PROPERTY IN CROATIA?
Yes, from February, 2nd 2009, the Republic of Croatia rendered equal both Croatian and EU citizens, in the matter of purchasing real estates. Therefore EU citizens CAN purchase real estates in Croatia in the same way Croatian citizens can. Nationals outside EU can buy real estate in the Republic of Croatia based on the reciprocity principle. Written claim has to be submitted to the Ministry of Justice of the Republic of Croatia with the following documents enclosed to the written claim: legal basis for acquiring property (purchase and sale agreement, donation of property, agreement on maintenance and similar) in the original or a certified copy, evidence of ownership from vendor/alienator of estate, or registered land certificate, in the original or a certified copy, not older than six months, certificate from self-government's administrative body empowered for urbanism and land use planning based on location of the estate, on legal status of the estate (is estate situated within boundaries of construction area defined in the urban development plan), evidence of acquirer's citizenship (certified copy of passport and similar) or evidence on status of legal person (excerpt from the court register), if the acquirer is a foreign citizen if requestor is represented by a counsel, it is necessary to deliver licence in the original or a certified copy, if requestor has not a counsel to represent him, and he is staying abroad, he is obliged to define a counsel for receiving written documents with residence in the Republic of Croatia. It is not possible to renew the claim within 5 years.
The fastest and the simplest way for foreign citizens to purchase a real estate is by starting up a company in Croatia.
ARE FOREIGN CITIZENS ENTITLED TO SELL PROPERTY IN CROATIA?
Yes, everybody is entitled to sell real estates in Croatia.
DOCUMENTATION TO BE PRESENTED BY SELLER
For foreign citizens valid passport, OIB, Land Registry extract/title, proof of acquiring of the ownership right, cadastral record, Energy efficiency certificate.
WHAT IS THE USUAL AMOUNT OF DEPOSIT/DOWNPAYMENT?
The usual deposit 10% of the agreed total purchase price but always depends on the agreement between seller and buyer.
WHAT IS THE USUAL DEADLINE FOR CLOSING?
Usually it is 30 to 60 days, but always depends on the agreement between seller and buyer.
MUST THE BUYER VERIFY HIS SIGNATURE AT THE PUBLIC NOTARY?
He may, but it is not obligatory. For the seller it is obligatory.
IS IT POSSIBLE TO CLOSE AND VERIFY A SALES CONTRACT ABROAD?
Yes, in such case, the best way is to have it verified at the Croatian Embassy or Consulate. If you verify such a contract at public notary office, then this verification has to be Apostiled in your country, and translated into Croatian by an appointed courts interpreter.
DOCUMENTATION TO BE PRESENTED BY BUYER
For foreign citizens valid passport and OIB.
CAN RECENTLY PURCHASED PROPERTY BE SOLD?
YES, but in such a case the seller has to pay a 35% income tax on the difference in value of the real estate purchased and sold.
IS IT POSSIBLE TO PAY THE 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.