Buying a second home in Croatia can be a straightforward process with the right professional guidance. Here are some of the must-knows before making the final decision. By Martina Petrina
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The Croatian market is very attractive for property buyers from all around the world so the regulations may vary depending on the legal factors. No matter if your intention is to buy a property nearby the sea, an authentic stone house, or inland agricultural land, the process can be quite complex, and therefore hiring a real estate agency is a must. Buying real estate in Croatia can be a great investment, tho.
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First and foremost, it is particularly important to find professionals — a lawyer, and real estate agent, who will get your back and be there for you whenever you need assistance. Before you start looking for the property to buy in Croatia, make sure that the brokers you are going to work with are licensed. The trustworthy real estate agent will answer all of your property questions, represent you during the process, and ensure you are not taken advantage of by property sellers. Check the real estate website and the office, because many agencies might be working illegally. Legal protection and safety of your investments are advisable and should be your main priority.
If you’re interested in buying a property in Croatia, we’ve got a guide to buying property as a foreigner. Check it out here.
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Real Estate’s Commission is usually 2% to 3% of the purchase price and should be paid by the buyer. Legal fees, notary fees, translators, and the founding of the company are approximately 1%-3%, which is also paid by the buyer. Another important factor you must consider before buying a property in Croatia is understanding the tax implications of the property. In addition to the purchase costs, the buyer may be obliged to pay a real estate tax (PPN). In 2021, the Real estate transfer tax rate is 3% of the final purchase price or 3% of the estimated property value by the Croatian Tax Administration.
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From the 1st of February 2009, the citizens of all EU Member States are eligible to buy a property in Croatia under the same conditions as nationals of the Republic of Croatia. On the other hand, non-EU citizens can buy a property in Croatia if they have the approval of the Ministry of Justice. It can, however, be obtained solely by the citizens of those countries with which Croatia has an agreement on reciprocity. Without consent from the Ministry, you could not register your ownership of the property. As of now, agricultural lands and forests can be purchased only by Croatian citizens. This is valid until June 30, 2023.
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If you want to speed up the purchasing process, establish a company in Croatia. Croatian companies have equal rights no matter the citizenship of the founder. Also, foreigners (EU and non-EU) can buy agricultural land in Croatia only if they open a business in Croatia. However, it is still not as simple as it sounds and definitely requires a professional to guide you through the process. If you are in a hurry and don’t have time to wait — hire an agency and buy a property in Croatia through that company.
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Make sure you choose a good property location especially if you are planning to build a property for rent or you will want to sell it in a few years. Analyze trends in resale values by doing extensive market research or let a real estate agent do it for you. Also, consider the factors like amenities offered in the property, and make sure there is everything you need at your disposal. If the type of home you will want to buy is a coastal property, check out our Guide Through Popular Locations.
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The first step in buying a property in Croatia is the pre-contract agreement between a buyer and a seller. A pre-contract agreement serves to define the terms of the property sale and the intention to purchase so your lawyer will have to check the legal ownership and status of the property. It also includes information on the property and its description, as well as the obligations for both sides. Once the pre-contract is ready, it is common that you will have to pay a certain sum to the seller, usually 10% of the selling price.
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For the non-EU citizens, once you have found the property and made a pre-contract agreement, the application is submitted to the Ministry of Foreign Affairs along with the following documents:
For EU and non-EU citizens, to obtain the legal right of ownership, you must register your purchase in the Land Registry. Submit a copy of the binding contract signed by a notary to a competent municipal court that leads the land register. Next, make sure the details of the contract have been registered in the Municipal Cadastral Department’s Land Books and payment of purchase tax has been made.
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If you don’t have Croatian nationality, you should get familiar with the rules and regulations before making the final decision to buy property in Croatia. Hence it is a good idea to engage a vetted real estate agent who is an expert on the real estate market in Croatia and will have your back through the process.
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