Guide for Foreign Nationals: How to Legally Rent Property to Tourists in Croatia?

Over 90% of our foreign buyers of luxury villas want to put their property into tourist rental function during the months when they are not staying in it. It is a logical way for an apartment or holiday home to generate income.

At the beginning, many of them face the question of how to legally start renting, what they must declare, what taxes to pay, and whether they can manage everything from their home country. Although the very thought of Croatian bureaucracy sounds intimidating to many, the process of tourist rental is extremely well established.

As an agency that works with foreign investors daily, in this guide we explain step by step the rules, taxes, and procedures so you can carelessly realize the return on your investment.

Can a foreigner legally rent property in Croatia?

The short and clear answer is: Yes, absolutely! Renting property in Croatia as a foreigner is completely legal. However, not every foreign national is in the same position. Your rights and tax obligations depend directly on the country you are coming from – whether you are a citizen of the European Union (and Switzerland) or a citizen of a Third Country.

Renting as a natural person (Only for EU, EEA, and Swiss citizens)

Croatian regulations, in accordance with the official guidelines of the Tax Administration for non-residents, allow natural persons, citizens of the EU and Switzerland, to provide catering services in the household in exactly the same way as Croatian residents, subject to fulfilling the prescribed conditions. This means that citizens of Germany, Slovenia, or Sweden, for example, do not need to establish a company in order to engage in renting.

Flat-rate tax – The most favorable option

As an EU natural person, you can rent out accommodation units and pay an extremely favorable “flat-rate tax per bed” and a tourist tax. This is the most common and by far the most profitable model.

It is important to note that there is no single universal amount of property rental tax for the whole of Croatia, so before buying or starting to rent, a calculation should be made for the specific location. The amount of the flat-rate tax depends on the local rules of municipalities and cities, and the tax changes from 2025 have additionally linked the calculation to the category of tourist development of the local self-government unit. The renter also has other obligations, such as tourist taxes (the amount of which also depends on the destination) and membership fees to the tourist board.

The VAT trap on services of foreign platforms

This is a key educational point that our team always warns about! It is important to note that flat-rate renters can simultaneously have the obligation to calculate Croatian VAT on certain services provided to them by foreign business partners (foreign platforms).

Even though you pay a flat-rate tax, as a foreign citizen, you must obtain a VAT ID number in Croatia. For services provided by taxpayers from another country (on the commission charged to you by platforms like Booking.com or Airbnb), you are obliged to calculate and pay 25% VAT to the Croatian state, according to the reverse charge mechanism.

Renting through a company / LLC (For non-EU/EEA citizens)

The same rules do not apply to citizens of so-called “third countries” (like Great Britain, the USA, Canada, or Australia). As a rule, they cannot rent out their own property for tourism as natural persons.

In order to do business legally, they must use an appropriate business form, that is, open a Croatian company (most often a trade, d.o.o. – LLC, or j.d.o.o.) and enter the property into the share capital or rent it through the company. The model should be chosen according to your own situation, the number of properties, planned income, management method, and tax circumstances. For example, if the owner plans to rent multiple villas with professional management, a company may be more practical than an individual model.

When is it profitable for EU citizens to open a company? 

Sometimes opening a company can be more profitable even for European Union citizens. This is the case if the owner is buying multiple luxury villas, expects a higher annual turnover, and plans to employ staff and their own management team.

For tax treatment, it is important to know that from 2025, the annual turnover threshold for VAT exemption has been increased to €60,000, in accordance with amendments to the Value Added Tax Act. For luxury villas with a pool, this threshold can be crossed very quickly, so before buying a second or third property, it makes sense to make a serious projection of income and tax structure. (Read more about the numbers and return on investment in our blog: How to assess the profitability of a seaside rental property).

What is object categorization and how to get “stars”?

Before legally renting and receiving your first guest, your property must meet the prescribed conditions for the type and category of accommodation. For a private renter, this means obtaining a Decision on approval to provide catering services in the household.

The request can be submitted electronically through the official portal eTurizam (within the e-Citizens system) or at the competent tourist office. The basic documentation includes proof of ownership and proof of the usability of the building, as well as documentation proving the fulfillment of general and special conditions according to the Ordinance on classification and categorization of facilities.

The categorization of apartments and villas determines the number of “stars” your property will carry. Before starting to rent, it is necessary to check the building and usage permit, the layout and surface area of the space, the number of beds, equipment and amenities (like a pool and air conditioning), sanitary conditions, and security elements. Without this Decision, legal rental is simply not possible. (Note: for apartments in buildings, there are also additional rules related to the consent of co-owners for short-term rental, so the conditions should always be checked for a specific property).

Running the business from abroad: Who will take care of your villa?

Let’s bring the story down to practical ground. Buying a villa is just the first part of the investment. If you use the property for a few weeks a year, and the rest of the time you want to generate rental income, someone in Croatia must take care of the property daily while you are in your home country.

This includes communication with guests, check-in and check-out, registering tourists in the national eVisitor Croatia system, organizing cleaning and preparing the villa between reservations, maintaining the pool and the garden, checking technical correctness, and solving problems during the guest’s stay.

In other words, tourist rental is not completely passive income if the owner manages every reservation themselves. That is why professional property management services have great value specifically for foreign owners because agencies take over the complete logistical burden of the business. Read more about it in our guide: Property maintenance in Dalmatia: What does professional Property Management include and how much does it cost?

Conclusion: Your investment in safe hands

At Broker.hr, we believe that our job does not end the moment we find a buyer and sign a sales contract. For a foreign owner, the real value lies in getting a local partner who understands the entire life cycle of real estate.

From finding the right villa, checking documentation and tax advice on usage models, to connecting with reliable local partners for maintenance – our goal is that Croatian real estate is not an administrative problem for you, but a well-organized and profitable investment.

Do you want a villa that will be your private home during your stay, and generate secure income the rest of the year? The first step is to choose the right property. Browse our top offer of luxury villas and houses with a pool for sale and contact us. Our team can go through the whole process with you, from the first idea to putting the property into function!