Are you planning or have you already bought a property in Lijepa Naša, and are you interested in how much you have to set aside for taxes? Croatia Real Estates agency brings you the latest news related to the purchase and sale of real estate. Find out how to buy real estate in Croatia and stay up-to-date with future topics related to real estate, tourism and lifestyle in Lijepa Naša! Follow our official website and find out how to buy real estate in Croatia. – Follow our official website for more details and information!
Real estate transaction tax in Croatia
The tax base is the market value of the real estate at the time of the tax liability. The market value of the real estate is the price of the real estate that is achieved or can be achieved on the market at the time of the tax liability. The subject of taxation is real estate transactions. The acquisition of real estate, on which value added tax is paid, is not considered real estate turnover, writes the Tax Administration of Croatia.
Real estate sales tax in the amount of 3% must be paid by the buyer.
Tax exemption
Have you bought real estate, or are you in the process of buying it, and are you wondering if there are exceptions to the tax exemption? There are a few exceptions when it comes to real estate taxation. The Tax Administration of the Republic of Croatia has issued several cases of exception in which the real estate buyer will not be taxed.
“The most common case of tax exemption is when a buyer buys real estate from a company that is obliged to calculate VAT on it. Also, the tax is not paid in the case of inheritance, gift or lifelong maintenance, but according to the vertical line.” – Ivan Varat, San Patrik real estates. Some of the potential possibilities in which you will be exempt from paying taxes are presented in the text below.
- Non-taxation when buying the first property.
If you are a citizen with Croatian citizenship residing in the place and address where the real estate (which you are buying) is located, whose immediate family members do not own any other real estate (including a vacation home), an exemption from paying real estate sales tax is prescribed for citizens who by purchasing their first real estate (apartment or house), they solve their own housing issue with the cumulative fulfillment of the conditions specified in the Law.
- If you are an exile or refugee who acquire real estate by exchanging their real estate abroad.
- If you are a citizen buying a residential building or apartment.
Including the land, on which you had the right of occupancy or with the consent of the holder of the right of occupancy according to the regulations governing the sale of apartments on which there is the right of occupancy.
- Protected tenants who buy a residential building or an apartment in which they live based on a lease agreement.
- Persons who, by dissolving co-ownership or dividing joint ownership of real estate, acquire separate parts of that real estate.
- If you are a person who acquires real estate in the process of return of seized property and consolidation of real estate.
What about gifted and inherited real estate?
All citizens who are direct spouses, descendants, ancestors, adopted children and adoptive parents of the deceased or donor are exempt from tax on inheritance, gifting and other acquisition of real estate free of charge.
All natural persons to whom the Republic of Croatia or a unit of local and regional (regional) self-government donates, i.e. gives real estate free of charge for compensation or for other reasons related to the Homeland War, and former spouses when arranging their property relations in connection with the separation of marriage.
Real estate tax refund
Most states charge real estate sales tax when one entity sells or gives real estate to another entity. Counties, cities, towns, and municipalities may also collect these taxes. If you’re buying or selling a home, these taxes can affect how much you’ll pay for the property or how much you’ll make on the sale.The real estate transfer tax fee can be based on the sale price of the property or on its appraised value, and must be paid before the contract can be recorded. In Croatia, that percentage is 3%.
According to Article 22 of the Real Estate Tax Act (Official Gazette, No. 69/97, 26/00 and 153/02), the termination of the contract on the transfer of ownership of real estate by the will of the parties before the transfer in the land register to the new owner and the termination or annulment of the contract by a court decision, are the reason for the renewal of the procedure and the annulment of the decision on the determination of real estate sales tax. A proposal for the renewal of the procedure due to the termination of the contract by the will of the parties before the transfer in the land register to the new owner can be submitted within one year from the date of finality of the tax assessment decision, writes the Tax Administration of the Republic of Croatia.
