NIS PROPERTY CROATIA

Buying a property abroad does not have to turn into unnecessarily long and frustrating process if one is informed about the buying steps. People who refuse to take advices and services from the real estate professionals may risk to end up tricked without legal protection. These beginners misteakes can be overcome if you take a few minutes and read the following paragraphs.

Safety is the most important criteria required by InvestCroatia when selecting a cooperational partner. All the properties published on this web site were legally checked and the buyers will face no problems claiming their ownership once the buying process is finished. However, we strongly recommend you to take an independent solicitor who will follow your purchase process until the end.

Should you buy as an individual or through Croatian company is the most common question. The answer is not simple and it often depends on particular case and clients perferences. In general, InvestCroatia will suggest you to go individual route if you are buying a single average property for personal use (in particular if it is not taxed with VAT). Make sure to check with your agent if you have a citizenship of the country with which Croatia has reciprocity in acquiring real estate, as this route needs to be aproved by the Croatian Ministry of justice (takes a couple of months). Private limited companies may be a better solution if you are starting a property business in Croatia.

Buying as an individual

• select the property and arrange the viewing trip
• inform yourself about the agencys fees prior taking the trip
• inform yourself about the property tax during the trip
• find a solicitor (ask for recommendations)
• put reservation deposit and sign pre-contract
• sign the sales/purchase contract and execute the payments
• register ownership
A written request to the Ministry of justice (which will be done by your solicitor) need to be submitted with the following additional documentation:

• original document or certified copy providing the legal basis for acquiring a title (purchase agreement, gift agreement, life-long support agreement, etc.);
• original document or certified copy, not older than six months, providing evidence of the title of the seller/abalienator over the real property in question, or rather: the original or certified copy of the land registration excerpt, not older than six months;
• confirmation (original not older than six months) issued by the local self-government body in charge of the urban and physical planning (county offices) that the real property lies within the boundaries of the construction area envisaged in urban planning;
• proof of citizenship for foreign buyers (certified passport copy) or proof of the legal entity status (court register excerpt), if the buyer is a foreign legal entity;
• if there is an authorized agent, it is necessary to submit the original or a certified copy of the power-of-attorney

Apart from the documents and deeds listed, it is necessary to attach a proof of the administrative fee payment to the application. According to Article 21 of the Amendment to the Law on Administrative Fees and Taxes (Official Gazette no. 163/03), or more precisely: tariff number 74.a,, the following levels have been set for administrative fees:

• HRK 50 for the application,
• HRK 100 for the decision on acquiring real property, and
• HRK 20 for any addition to the application.
Of 5,627 requests filed by the foreign buyers for obtaining consent for the acquisition of ownership rights to real estate in the Republic of Croatia, 1,971 cases were settled by January 15, 2007. For the purpose of more efficient and faster settling of a large number of requests within the procedure, thereby implementing the recommendations of the European Commission, another 6 people were emplyed in the Ministry of justice.

Ownership is registered at the court, land registry department. Property posession is registered at cadastre. A cadastral extract may be important in some cases as it provides drawing of the property and its boundaries in relation to the neighbouring plots. All of these documents will be gathered and checked by your solicitor.
Setting up the company

• select the property and arrange the viewing trip
• inform yourself about the agencys fees
• inform yourself about the property tax
• find a solicitor (ask for recommendations)
• register the company
• find an accountant and transfer the money
• sign the contract and execute the payments
• register ownership
Buying via company route will get you an ownership registered much quicker than the individual route. However, do not forget that the company has regular monthly expenses to operate. If you are not in a hurry to resell immediately after the purchase, think again if the company is really needed. Individual route is still the most popular way of acquiring properties among foreign citizens. Find out more about the procedure of setting up the private limited company following our main menu Starting business.

Things to think of

When is capital gain tax paid and at what rate? Is the real estate transfer tax always paid on the overall purchasing price? Which properties contain VAT and can it be claimed back? At what stage of the buying process is the real estate tax paid anyway? In which currency does the payment have to be executed? What is the price of the utilities in Croatia? How can the property be rented out? How much do the real estate agencies charge? What are the solicitors fees?

Find all the answers in our comprehensive printable version of our partners BUYING GUIDE (pdf file, 392 KB).