Guide To Buying Real Estate In Croatia For Foreigners

Guide To Buying Real Estate In Croatia For Foreigners

Croatia, as a country rich in history, culture and natural beauty, is one of the most sought-after destinations for buying real estate. In addition, Croatia offers an extremely high level of safety and quality of life, and as such is becoming more and more attractive to foreign citizens, who already at this moment account for 30% of total real estate purchases, especially on the coast of the Adriatic Sea.

Buying real estate is first and foremost a legal business and requires an extremely serious and informed approach.   What are all the steps and restrictions for foreign citizens when buying real estate and acquiring ownership in Croatia? You can find the answers to that below.

To begin with, foreign real estate buyers in the Republic of Croatia can be divided into two categories:

  1. Foreign citizens from the EU/EEA
  2. Foreign citizens outside the EU/EEA
  1. Foreign citizens from the EU acquire property in the Republic of Croatia without any restrictions. That is, under identical assumptions that apply to citizens of the Republic of Croatia and legal entities based in the Republic of Croatia. Before purchasing, customers should obtain the Croatian tax number (OIB)
  2. In order to purchase real estate and acquire ownership in the Republic of Croatia, foreign citizens from outside the EU must, in addition to obtaining a Croatian tax number (OIB), obtain the consent of the Ministry of Justice, Administration and Digital Transformation. At the same time, it should be taken into account whether they are citizens of a country with which the Republic of Croatia has a reciprocity agreement, that is, reciprocity in the acquisition of real estate ownership rights. Reciprocity ensures that citizens of both countries have equal rights regarding the purchase of real estate in both countries.

The process from application to obtaining consent can take from 30 to a maximum of 180 days. After obtaining the consent of the Ministry, foreign owners will be able to register their ownership of the purchased real estate

On the following link you can check what reciprocity agreement your country has with the Republic of Croatia: Information on reciprocity in the acquisition of real estate ownership rights between the Republic of Croatia and countries outside the European Union  

The request for the consent of the Ministry of Justice, Administration and Digital Transformation is sent in writing to the address of the ministry. The following documents should be attached to the request:

  1. Purchase contract – the legal basis for acquiring ownership
  2. Land registry extract – proof of the seller’s ownership
  3. Certificate on the status of the plot – proof that the real estate is located within the construction area
  4. Certified copy of passport – proof of citizenship
  5. Certified power of attorney – in case you are represented by an attorney.  if you have not appointed an attorney to represent you, and you are abroad, you are obliged to appoint an attorney for receiving documents with a residence in the Republic of Croatia.

Other citizens from outside the European Union who come from countries with which the Republic of Croatia does not have a reciprocity agreement, i.e. reciprocity in acquiring ownership of real estate, cannot as natural persons buy or acquire ownership of real estate in the Republic of Croatia.

Citizens of these countries have the possibility to establish a legal entity (most often d.o.o.) and, as owners of legal entity based in the Republic of Croatia, acquire ownership of real estate.

In this case, the owner of the purchased real estate is a company registered in the Republic of Croatia in which a foreign citizen is a member of the company (owner).

If the seller is a natural person, the buyer pays real estate transfer tax (RPT) in the amount of 3% of the total purchase price or the estimated value of the real estate by the Tax Administration of the Republic of Croatia.

In the case where the seller is a legal entity, the purchase price already includes Value Added Tax (VAT) in the amount of 25%, and in that case the buyer is not obliged to pay real estate sales tax (RPT).

In the Republic of Croatia, notaries deliver a copy of the sales contract to the Tax Administration of the Republic of Croatia, which will send a decision on the obligation to pay real estate sales tax (RPT) to the buyers for those properties on which value added tax (VAT) has not been calculated.

It is important to note that for a foreign citizen who comes from outside the European Union and who needs the consent of the minister responsible for judicial affairs to acquire real estate in the Republic of Croatia, the tax liability arises at the moment of obtaining this consent.

Opening a bank account in Croatia is not a requirement for carrying out financial transactions, but it is recommended in order to make transactions easier. In the Republic of Croatia, the official currency is the Euro, and transactions related to the purchase and sale of real estate are carried out in the specified currency.

A loan for EU/EEA foreign nationals can be approved for the following types of real estate:

  1. Residential property
  2. Vacation property
  3. Garage, parking space or storage room (with the condition of purchasing the related property).

When making a decision on a housing loan, it is recommended to check the creditworthiness with the bank, that is, the possibility of obtaining a loan for foreigners. In Croatia, there is no pre-approval of a loan, and the bank provides financial resources only after choosing a property and starting the purchase process.

In order to apply for a housing loan, the bank must submit a pre-contract for the purchase of real estate. In addition to the loan, the insurance instruments proposed by the bank are mandatory, and the said instruments must be obtained within the Republic of Croatia.

Illustration of Porta Group’s commission-free property purchase and included VAT benefits in Croatia.

Porta Group is one of the leading forces in the real estate development sector in Croatia, providing exceptional residential projects that set new industry standards.

Buying real estate from Porta Group with the help of our experts and licensed agents who are always at your disposal is an extremely fast and simple process.

Our sales team goes through the entire process of buying real estate with you without any additional fee, providing real support, tax advice and obtaining all the necessary documentation so that the whole process goes through with as little stress as possible for you.

In addition, Porta Group does not charge any additional commissions and bears the costs of drawing up and certifying the sales contract.

It is important to emphasize that Porta Group is a legal entity (d.o.o.) and as such shows the prices of all its properties with value added tax (VAT), which means that our customers do not pay real estate sales tax.

PROPERTY PURCHASES FROM PORTA GROUP

Contact us

Mon-Fri: 08:00-18:00
Sat-Sun: closed or by appointment