Buying property in Croatia? Here’s your Checklist

Property prices in the coastal areas of Croatia have been increasing recently. As global tourism boosts and Croatia also works to improve its economy and make it more liberal, these are the right time for buying property in Croatia.

The Croatian economy is growing fast and so is the real estate sector of the country. Improvement in the regulations, a thriving tourism market, and a booming Croatian real estate market (which offers the beautiful and priceless coastal properties of Croatia to investors and customers from across the world) are some reasons behind it. The country is also easily accessible by other countries of Europe and has a glorious historical heritage, a comfortable weather, and a natural and serene environment. If you want to buy Croatian property, here are some points to consider.

Investment opportunities for the foreign nationals
Citizens of some countries get a favorable investment environment in Croatia because of the reciprocity agreement that has taken place between Croatia and their respective countries. Hence, nationals of these countries can buy property in Croatia as freely as the Croatian national, who can buy properties freely in the countries with which Croatia has the reciprocity agreement. Croatia has this reciprocity agreement with all European Union countries, United States, Russia, and many others. Nationals of Bosnia and Herzegovina and Switzerland can also buy property in Croatia if they live in the country permanently. It may take around 2 to 6 months towards the finalizing of the property purchase documents, while the Croatian Ministry of Foreign Affairs examines requests.

Buying a property in Croatia: The Process
A contract agreement is created between the seller and the buyer, and the initial payment may be up to 10% of the price of the property. The buyer also needs to produce certain documents including proof of citizenship (this one is for both buyers and sellers), power of attorney, property details and others. The contract is later registered by the Municipal Cadastral Department.

Transfer/Purchase Taxes and Costs
A transfer tax of 4% is levied on all the property purchase transaction. If the property purchased is a new building, VAT is applied, which is 25% of the value of the property. The commission charged by real estate agents may vary from 3 % to 6% while legal fees may also have to be paid to the lawyer which is around 1% of the property purchase value. There are other fees including registration fee that may go up to 0.05% of the purchase cost.