In recent years, Croatia has become an increasingly popular destination for foreign investors who buy real estate in the country. There are many reasons for this, and some of them are the beautiful coast and islands, developed tourism industry, relatively low real estate prices compared to other European countries, high quality of life, historic cities and natural beauty. Although at first it seems that buying real estate in Croatia can be a big challenge, and the process of buying real estate in Croatia for foreign citizens even more complicated, the process is not as complicated as it seems at first glance. In this article, we will explore how foreign nationals can buy real estate in Croatia.
How to buy real estate in Croatia?
If you, as a foreign national, have been considering the benefits of buying real estate in Croatia for some time, you have probably spent hours studying various real estate ads, researching and thinking about destinations, and browsing numerous Internet articles about Croatia. You may also have turned to acquaintances and friends for helpful advice.
Since every major purchase, and especially one that includes the purchase of real estate in Croatia, is a serious step, it is necessary to carefully consider all aspects before making a final decision. You are probably already familiar with the information that citizens of the European Union and legal entities from member states of the European Union have the right to acquire ownership of real estate in Croatia under the same conditions as citizens of the Republic of Croatia, which means that they can buy real estate in Croatia without restrictions. However, it is important to emphasize that foreign citizens are considered to be persons who do not have Croatian citizenship, but a distinction should be made between persons who are from the member states of the European Union and other foreign persons.
When it comes to buying real estate in Croatia, the facilitating circumstance for citizens of the European Union is that the procedure for acquiring ownership rights does not differ from that which citizens of the Republic of Croatia have to go through. In this sense, the consent of the Ministry of Justice is not required, which facilitates and speeds up the purchase process. However, it should be kept in mind that there are certain limitations. Citizens of the European Union cannot buy or register agricultural land in their name, nor real estate located in protected nature areas and national parks. In addition, the acquisition of real estate in some areas is determined by special laws, whereby it is noted that citizens and legal entities from the European Union cannot acquire agricultural land until June 30, 2023.
Persons who are not citizens of the European Union, as well as legal entities outside the mentioned area, can buy real estate in Croatia under the condition of reciprocity - that is, that there is reciprocity in the acquisition of ownership rights to real estate between that country and the Republic of Croatia. If this condition is met, the next step in the process of acquiring real estate is to request approval from the Ministry of Justice of the Republic of Croatia for registration of ownership. After that, the procedure takes place in the same way as for citizens of Croatia. For information on reciprocity in the acquisition of real estate ownership rights between the Republic of Croatia and countries outside the European Union, the Republic of Iceland, the Principality of Liechtenstein, the Kingdom of Norway and the Swiss Confederation, we advise you to visit the website of the Ministry of Justice and Administration.
What requirements do you have to meet?
Although there are several requirements that foreign nationals must meet when buying real estate in Croatia, the process is not as complicated as it seems. As in other countries, foreign nationals need to provide some basic documents and permits, but these requirements are not that different from those for domestic real estate buyers.
Citizens or legal entities from outside the member states of the European Union, who wish to buy real estate in Croatia, must have several key documents. First of all, they need proof of identity, such as a valid passport or other identification document. It is also necessary to prove that there is reciprocity in the acquisition of ownership rights between the Republic of Croatia and the state of that citizen. Once this has been confirmed, it is necessary to request approval from the Ministry of Justice of the Republic of Croatia for registration of ownership.
On the other hand, citizens and legal entities within the member states of the European Union have a somewhat simpler procedure for purchasing real estate in Croatia. They must have a valid identity card or passport as proof of identity, and they do not have to seek the approval of the Ministry of Justice of the Republic of Croatia to acquire property ownership rights, except in exceptional cases such as acquiring ownership of agricultural land, property in protected nature areas and national parks, or in in the case of acquiring ownership of real estate in areas exempted by law.
What to do before the actual purchase?
There is no greater happiness than finding the ideal property that meets all your requirements and expectations, but there are still some steps you must take before you buy it.
Before the actual purchase, it is necessary to collect and check all the necessary documentation for the selected real estate. Please note that this may take several weeks due to the importance of document verification. If you are buying a property that is newly built, then the key document is the occupancy permit. Information on the ownership of real estate and other land registry data can be found on the website of the Ministry of Justice of the Republic of Croatia in the electronic land registry. If everything is in order with the documentation of the real estate you are buying, the purchase agreement will be signed.
What are the tax obligations when buying real estate in Croatia?
Buying real estate in Croatia requires considerable financial investment, so it is important to take into account all the costs involved in the buying process. Foreign citizens must be aware of the tax obligations arising from owning real estate in Croatia and the need to open a bank account in Croatia.
After you sign the sales contract, it is important to comply with all legal regulations. One of the key obligations is to report the tax liability to the Tax Administration within 30 days of concluding the sales contract, and the tax is then paid within 15 days of receiving the notification. Usually, a notary public, a public service or a court reports the tax liability, but if the acquisition document is not officially confirmed, the taxpayer is obliged to report the sale of real estate to the Tax Administration.
You can find everything about the real estate transfer tax law here.
4 steps you need to follow
After you have found a property that interests you, proceed in this order:
1. Review the documentation. Check the property before buying to avoid the risk of encumbrance. Information about square footage, purpose, information about the owner and any encumbrances or rights to the property are publicly available in the Cadastre and on the Uređena zemlja portal.
2. Signing the sales contract, which will include a down payment, which is usually 10% of the value. It ensures that the buyer fulfills his obligations, otherwise he will lose it, and if the seller does not fulfill his obligations, he must refund the buyer double the amount of the down payment.
3. Permission of the Ministry of Justice: Before completing the purchase process, you need to obtain permission from the Ministry of Justice to purchase the property. It is important to emphasize that EU citizens do not need the consent of the Ministry of Justice. The Ministry of Justice will check whether there is a reciprocity agreement with your country and the Republic of Croatia in order to get permission to buy real estate. To request permission, you must submit an application to the Ministry of Justice that will include the purchase agreement in the original or a certified copy, proof of ownership of the seller of the property, i.e. an extract from the land register, a certificate from the administrative body responsible for urban planning and spatial planning, according to the place where the property is located , on the legal status of the real estate, proof of citizenship or proof of the status of a legal entity, and a power of attorney for your representative who resides in Croatia, and who will receive official documentation if you do not have a registered address in Croatia.
As complicated as the process of buying real estate in Croatia seems, it really isn't. By following the regulations and steps, you will become the owner of your new property in no time and enjoy your investment.
Šibenik
Šibenik
