Terra Fortuna - FAQ

Frequently Asked Questions(FAQ)

 
 
Can a foreign citizen buy a property in Croatia? 
 
What is the procedure when the foreign citizens decide to buy a real estate in Croatia? 
 
Is it possible to foreign citizens to sell real estates in Croatia? 
 
Is it possible to conclude and verify e sales contract abroad? 
 
Do the both parties, meaning the owner together with the seller, have to verify their signature on the sales contract? 
 
How much down payment should be payed at the conclusion of a sales pre-contract or contract? 
 
What about the government taxes – Croatian VAT? 
 
What is the real estate purchase tax in Croatia? 
 
Does the seller have to pay taxes when selling his real estate? 
 
When does the real estate purchase tax be paid?

 
 
Can a foreign citizen buy a property in Croatia? 
 
Foreign citizens can buy properties in Croatia, but after prior consent issued by the Ministry of legal affairs and the Ministry of foreign affairs. As a rule, these statements on consent are issued to citizens of those countries Croatia has signed a contract on reciprocity with and in extraordinary cases, to citizens of other countries as well. All persons with registered business in Croatia or they register a business can consenquently buy real estates which will be the property of that business. 
 
 
What is the procedure when the foreign citizens decide to buy a real estate in Croatia? 
 
When a foreign citizen decides to purchase a real estate in Croatia first a sales contract is to be signed with the selling party (at this phase the contract does not have to be verified before a public notary jet), which is sent to the Ministry of foreign affairs in Zagreb, together with respective documentation. When the Ministry issues to the customer its statement on consent, the foreign citizen is entitled to register the real estate onto his name at the Municipal court -Cadastry department and pays the real estate purchase tax. Foreign citizens that establish, or already have an established company in Croatia, can purchase real estates on behalf of this company. 
 
 
Is it possible to foreign citizens to sell real estates in Croatia? 
 
Any legal or natural person, including foreign citiizens, can sell real estates in Croatia without any limitation. Teporarily there is a problem with the legal persons from the countries of former Yugoslavia whose issue will be solved additionaly within the negotiations on the SFRJ succession, meaning the war reparation. 
 
 
Is it possible to conclude and verify e sales contract abroad? 
 
A sales contract is possible to verify abroad and in such a case it is the best to have it verified in a Croatian embassy or consulate. If you verify such a contract before a foreign public notary, then this verification has to be translated into Croatian by an appointed courts interpreter in Croatia. 
 
 
Do the both parties, meaning the owner together with the seller, have to verify their signature on the sales contract? 
 
Both parties concluding the contract may verify their signature if they want so , but they are not obliged to do so. 
 
 
How much down payment should be payed at the conclusion of a sales pre-contract or contract? 
 
Usually the down-payment is 10% of the sales price or different if agreed so between the contractual parties. 
 
 
What about the government taxes – Croatian VAT? 
 
According to the Law on Governemnt taxes – Croatian VAT, when buying a new built real estate, the construction land is taxed with the 5% rate, while the value of the object on that land has to be taxed with 22% of the sales price. 
 
 
What is the real estate purchase tax in Croatia? 
 
The Republic of Croatia has a unified tax rate of 5% of the sales price for all types of real estate and respective transactions. According to the Law, tax on purchase of real estate is paid by the buyer. 
 
 
Does the seller have to pay taxes when selling his real estate? 
 
The seller doesn’t have to pay taxes when selling his real estate, only in case the real estate is sold prior to the expiration of three years after it has been purchased and if sold at higher price than originally purchased. In such a case the seller has to pay a 35% income tax on the difference in value of the real estate (purchase and sales price) increased for local taxes, different in every municipality.  
 
 
When does the real estate purchase tax be paid? 
 
After conclusion of the sales contract the buyer is obliged to register the purchase at the authorized tax authority within 30 days from the day of conclusion of the contract. Public notaries do also submit one copy of the sales contract to the tax authorities. The customer is obliged to pay respective real estate purchase tax within 15 days from the day of reception of the decision received from the tax authorities on the exact tax amount. If this tax is not paid within this term, interest on arrears are charged for every day of delayed payment.