Country Guides: Croatia

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Overview

Known as the ‘Pearl of the Adriatic’, Croatia offers privacy and tranquility making it a popular hideout for the jet set. Croatia is now one of the most important tourist destinations on the Mediterranean and has one of the most beautiful and the most picturesque coastlines in the World. Croatia has more than 4000 kms of coast and the swimming is sparkling where 58 resorts fly Blue Flags on their beaches. The Dalmatian coast, with its close-hauled constellation of 1,000 islands, is the “new Riviera”; while the Istrian peninsula, with its Italian looks and flavours, is “the new Tuscany”. From Roman to gothic, renaissance to baroque and on to art nouveau, Croatia has a wealth of historic architecture.

Croatia became the latest country in Europe to open up its property market to foreign buyers. Since February 2009, foreigners have been able to purchase property on the same terms as local Croats, although forests and agricultural land are excluded from the agreement. It is expected that once Croatia attains EU membership, interest in property will soar in this sought after location. Beyonce, Bill Gates, Steven Spielberg, Pierce Brosnan, Gywneth Paltrow and Sean Connery are all among the celebrity names to visit Croatia.

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Popular Regions in Croatia

 

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The Buying Process

Foreign citizen are entitled to purchase real estate in Croatia.

EU nationals

Citizens and legal persons from Member States of the European Union acquire the ownership right of real property in Republic of Croatia under the presumptions which are valid by acquiring the ownership rights for nationals of the Republic of Croatia and for legal persons with the seat in the Republic of Croatia.

Nationals outside EU

Foreign nationals can buy real estate in the Republic of Croatia after the reciprocity principle. For buying an real estate it is necessarily to refer a written request to the Ministry of Justice on the Republic of Croatia.

The following documents need to be attached to the written document:

• Original document or certified copy providing the legal basis for acquiring a title (purchase agreement, gift agreement, life-long support agreement, etc.);
• Original document or certified copy, not older than six months, providing evidence of the title of the seller/abalienator over the real property in question, or rather: the original or certified copy of the land registration excerpt, not older than six months;
• Confirmation (original not older than six months) issued by the local self-government body in charge of the urban and physical planning (county offices) that the real property lies within the boundaries of the construction area envisaged in urban planning;
• Proof of citizenship for foreign buyers (certified passport copy) or proof of the legal entity status (court register excerpt), if the buyer is a foreign legal entity;
• Any nationals can buy companies in Croatia

• Foreign natural or legal persons can without any problems sell  real estates in Croatia.

Signing the Contract

At the conclusion of a sale pre-contract or contract, a downpayment of up to 10% of the  sales price or different if agreed so between the contractual parties. The buyer and seller may need to verfiy their signature on the sales contract. It is also possible to conclude and verify a sales contract abroad and 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.

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Taxes

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 estimated 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. The tax in the case of exchange of real estate is the same, 5%, but here each of the real estate owners pays 5% of the value of his real estate as tax.

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.

Capital Gains Tax

Capital Gains tax is applicable in the case where the real estate is sold before 3 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.

It is possible to pay Real Estate Purchase tax in a foreign currency and this can 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.

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Visa Requirements

Whether or not you need a visa to Croatia depends on a variety of factors: your nationality, the purpose and the expected duration of your stay, as well as other things like family relations and your employment status.

The citizens of following countries do not require a visa (either a passport or national identity card is sufficient) to enter Croatia for a period of up to 90 days:

Nationals of all EU countries

Austria, Belgium, Bulgaria, Czech Republic, Cyprus, Denmark, Estonia, Finland, France, Germany, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and the UK.

Other countries with visa exemption

Andorra, Argentina, Australia, Bolivia, Bosnia-Herzegovina, Brasilia, Brunei, Canada, Chile, Costa Rica, Ecuador, El Salvador, Guatemala, Honduras, Hong Kong, Iceland, Israel, Japan, Liechtenstein, Macau, Malaysia, Macedonia, Mexico, Monaco, New Zealand, Nicaragua, Norway, Panama, Paraguay, San Marino, Singapore, Switzerland, Turkey, Uruguay, USA, Vatican City and Venezuela.

Russia (Russian Federation)

Citizens of Russia do not require a visa to enter or do business in Croatia. However, they need to present the following:

• Ticket for return journey
• Proof of accommodation (e.g.: hotel reservation)
• Invitation Letter or proof of booking

Furthermore they require one out of the following:

• Invitation Letter,
• Booking confirmation of their journey or
• Travelling with an organised group

South Korea

Citizens of South Korea are allowed to enter Croatia and stay there for a period of up to 30 days without a visa.

Nationals of all other countries

Citizens of all remaining countries need to apply for a visa prior to their travel to Croatia. If this applies to you, get in touch with the Croatian embassy or consulate in your home country or the country of your current residence.

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