Procedure for buying real estate in Croatia for foreigners

Procedure for buying real estate in Croatia for foreigners

In recent years, not only Croats but foreign nationals are investing in real estate. A large number of foreigners decided to build holiday houses or buy apartments in the Adriatic. The reason for this is the growing popularity of Croatia as a tourist country in which many EU residents, but also wider, come to rest enjoying the sun on Croatian beaches or swimming in the Adriatic Sea. Some of them fell in love with one of the places on the Croatian coast and return year after year. That's why they decided to buy real estate. 

It is expected that the number of foreign citizens who will buy or build apartments on the Croatian coast is expected to grow rapidly in the coming years. However, the law distinguishes between Croatian and foreign citizens and therefore the actual purchase procedure of the real estate varies according to the citizenship of the buyer. Also, there are different procedures and necessary documents that an EU citizen and citizen of a non-EU country must obtain. 

As a foreign buyer of the property, you need to keep in mind that just like any bureaucratic process, this process is not easy, and before you take an investment venture, it is advisable to have a good idea of it. Below you will find tips and information that can be useful if you or someone close to you, and not a Croatian citizen wants to buy real estate in the Republic of Croatia. 

Find out under which conditions foreign citizens can acquire property ownership in Croatia 

Buying a real estate does not follow the same procedure as purchasing fruit and vegetables on the market. Since it is a large investment, the purchasing process is not easy, and it is necessary to follow the predefined structure. As an investor, you should be informed about the conditions that must be met in order to acquire the right to property ownership in Croatia. Before you enter in the process, it is important to consult with people who are familiar with the process or visit the competent institutions. You can contact the relevant county office or the regional offices of the Ministry of Justice. 

Obtaining property ownership for EU citizens: procedure and required documents 

EU citizens obtain the right to own real estate in Croatia under the same conditions that apply to Croatian citizens and legal entities domiciled in Croatia except for real estates located in excluded areas, i.e. on agricultural land and protected parts of nature specified by a special law. The Agricultural Land Act stipulates that foreign nationals may not become owners of agricultural land. This practice has been applied since 2009 and is in line with the principle of a single economic market promoted by the European Union. Since the purchase of all other types of real estate is the same as for Croatian citizens, it is necessary to obtain the following documentation: 

  1. Land registry extract consisting of a possession list, a property list and a cargo list
  2. Energy certificate
  3. Construction and use permit for newbuilding

After obtaining the documentation, you will complete the prepayment and payment of the deposit (if you agree with the seller) and finally conclude a sales contract and register as its owner in the land register. For the registration of the right of ownership along with the purchase contract you must obtain a proposal for registration, a certified sales declaration of the seller (if it is not a part of the contract or declaration is not included in the application for registration), proof of citizenship of the buyer (domicile, identity card or passport), pay a court fee of 250 kn (i.e .proof of exemption from court fee payment). It is important that you submit a motion for registration of ownership rights within 60 days of acquiring the conditions for entering the land registry right so that you do not have to pay five times more expensive fee. More about the procedure of buying real estate for Croatian citizens that is applicable to EU citizens can be read here. 

Obtaining property for citizens outside the EU: procedure and necessary documents 

The process of buying real estate for foreign nationals outside the EU is much more complex than the process of buying real estate for Croatian and EU citizens. Complexity is primarily related to the amount of documentation you need to obtain and to the consent you need to get from the Ministry of Justice. In order to obtain the consent, you must submit a request for its issuance if you are a citizen of the country with which there is mutuality in obtaining the right of ownership of real estate in Croatia. In addition to the written request, the following documents must be enclosed: 

  • The legal basis for acquiring ownership in the form of a purchase or gift contract, maintenance contract, etc.
  • Proof of ownership of the seller / enumerator of the property concerned relating to the extract from the land register and not older than six months
  • Certificate of the administrative body responsible for urban planning and spatial planning according to the place where the real estate is located
  • Certificate of legal status of real estate proving whether the real estate is within the boundaries of the construction area envisaged by the urban plan
  • Proof of nationality (certified copy of the passport) if the buyer is a natural person or evidence of the status of a legal person (extract from the court register) in the case of a buyer who is a legal person
  • Power of attorney in the original or certified copy in case the customer is represented by the attorney
  • If you are abroad and have not appointed an attorney who will represent you, you are required to designate a person authorized to receive a residence permit in Croatia.

If additional documentation is required, the responsible staff of the Ministry of Justice will be contacted during the course of the procedure. In addition to the submission of documentation, it is also necessary to pay administrative fees in the amount of HRK 35 (for the submission of the application), HRK 70 (for the acquisition of real estate) and HRK 15 (for each possible addition). The above is valid if you are a citizen of a country listed on the list of countries with which there is mutual ownership of the property right in Croatia. Otherwise, you can not register as a property owner until such mutilation is established. An updated list of countries with which exists or doesn't exist reciprocity with the Republic of Croatia can be found here. 

All foreign nationals who already have an open company in Croatia are exempted from this procedure and are not required to obtain the Ministry of Justice's approval. 

Payment of real estate sales tax 

Anyone who buys or inherits a real estate is also a real estate tax payer. The tax rate is three percent of the market value of the real estate at the time of its acquisition and you are obliged to pay the amount of tax within 15 days of the delivery of the tax settlement. As of 1 January 2017, real estate tax is reported by notaries, courts or public law bodies within its jurisdiction. Only those taxpayers who are required to pay the real estate tax are solved. Also, if you fall into one of the following groups of citizens, you are exempt from paying real estate sales tax: 

  • Persons acquiring real estate in the process of repatriation of property and real estate confiscation
  • Refugees who acquire real estate by replacing their real estate abroad
  • Protected tenants who buy a residential building or apartment where they live on the basis of a lease agreement
  • Citizens who buy a residential building or apartment (including land) with occupancy right or with the consent of the tenant of the tenancy right under the regulations regulating the sale of flats where occupancy right exists
  • Protected tenants who buy a residential building or apartment where they live on the basis of a lease agreement
  • Persons acquiring real estate in accordance with the regulations governing the conversion of social ownership into other forms of ownership
  • Married couples, extramarital partners, formal and informal life partners, descendants and ancestors, and adoptive parents who are in this relationship with the recipient of the support and obtain real estate on the basis of a lifetime agreement or on the basis of a contract providing support until the death
  • Persons who by divestiture of co-ownership or a share of joint ownership acquire special parts of these properties, irrespective of the ratios prior to and after the dissolution of the co-ownership or division of joint ownership.

In case of inheritance or giving of real estate you are also exempted from real estate sales tax if you are a member of one of the following groups: 

  • A spouse, extramarital, formal and informal life partners, offspring and ancestors who form an upright line, and adherents and adopters who are in this relationship with the deceased or gifted
  • Legal and natural persons to whom the Republic of Croatia or the local and regional self-government units donate, that is, real estate without compensation for damages or other reasons related to the Homeland War
  • Former spouses, former extramarital partners, and former formal and informal life partners when regulating their property relations.

Facilitate yourself the process of buying real estate 

Whether you are a Croatian or a foreign citizen, it is important that before you decide to buy a real estate, be aware that there are also administrative procedures that can cost you a lot of time, money and nerves. In order to shorten the trouble and avoid a long-term bureaucratic struggle, you can turn to real estate brokers or real estate agencies. Real Estate Agencies can do the entire process of buying real estate for you, starting with looking for an ideal property, negotiating with the seller and obtaining the necessary documentation up to the acquisition and registration of property ownership. Their experts are well acquainted with the process of buying real estate for both Croatian and EU citizens as well as for third-country nationals. Because of their constant work in this field and long experience they will much easier and quicker complete the process for you. You can also contact them at any time for the extra help and advice they will be happy to provide you. Find out more about the benefits of hiring a real estate agency here.