Real Estate Taxation in Croatia: Q & A Session

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With laws seeming to change in Croatia 10 a penny, it can get pretty confusing for potential investors and property owners alike. With the EU accession subject hotting up continuously, it doesn't look like it's going to abate either. To keep us up to speed with what is what in the world of property here Trasa Real Estate, a real estate company based in Istria, Croatia stop by for a quick Q&A session on Real Estate taxation. They are providing a valuable advice on property and real estate taxation in Croatia.

Can foreigners buy and sell real estate in Croatia?

There are a few ways to do that. Citizens of EU can buy property with no restrictions. Citizens of non-EU countries need a permission paper from the Ministries of Legal and Foreign affairs. Permission paper is granted to the citizens of the countries Croatia signed a reciprocity with. The third option is to register a company in Croatia and buy real estate trough the company.

What is the real estate purchase tax in Croatia?

Real estate tax in Croatia is 5% for all types of properties. The tax is defined either on the price of the property or is determined on the value estimate by the Croatian tax authority. Tax is paid by the buyer.

When is the tax payment due?

The buyer is obliged to register the purchase at the tax authority within 30 days of signing of the contract. The buyer is obliged to pay the tax within 15 days from receipt of the decision from the tax authorities. Interest is added to the amount for every day you miss the payment.

Does the seller need to pay taxes?

No.
This can only happen if the property is sold within 3 years from buying, for a higher price. In this case you are obliged to pay 35% tax on added value.

Is it possible to sign and verify the contract abroad?

Yes. There are two options for this. Best one is to sign and verify the contract in the nearest Croatian embassy or consulate. The second option is to sign and verify such contract before public notary. In this case the verification has to be translated by appointed translator for Croatian.

Is it possible to pay the tax in foreign currency?

The tax is paid in Croatian Kuna by a bank transfer into the appropriate account of taxation authorities. If paid in foreign currency exchange rate is calculated by mid exchange rate of Croatian National Bank on the day of payment.

If you have any more questions or would like to check properties in Croatia contact Trasa Real Estate through their web page.

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The views expressed are those of the writer, and do not necessarily reflect the views of Guide2Croatia.