FAQ

To make your purchase or real estate sales easy, here are some frequently asked questions which we received from our clients:

1. What is Land Registry?
2. What is a real estate?
3. In what way is the value of a real estate determined?
4. Who can buy a real estate in Croatia?
5. Can foreigners buy a real estate in Croatia?
6. Who can sell a real estate in Croatia?
7. What are buyer and seller obligations in real estate trade?
8. How much is the deposit for a real estate when buying one?
9. Where does one certify purchase agreement and by whom?
10. What is tabular statement?
11. Who and in what amount is paying taxes for the real estate?
12. Is tax being paid while substituting real estates?
13. How long does it take to apply and pay real estate taxes?
14. Can a buyer request entry of ownership rights before settling real estate taxes?
15. Who is paying and when the VAT while buying a real estate?
16. Are buyer and seller liable for any other taxes except real estate tax?
17. In what way is rent of real estate being taxed?
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1. What is Land Registry?
Land registries are public books containing legal state of the real estate that is eligible for legal trade, made publicly available to anyone interested in the data or wanting to have excerpt from the Land registry.

2. What is a real estate?
Real estate is a land parcel together with everything connected to it on the surface or beneath it. This means that by buying an apartment you are buying part of the building and land on which it was built. If you’re buying cadaster particle, you are becoming an owner of everything built on it, regardless of it being registered, drawn into and enlisted in cadaster plans and Land registry.

3. In what way is the value of a real estate determined?

Sell value of a real estate is being estimated by seller, according to market fluctuations and balance between offer and demand. Market value of a real estate is being determined by Tax administration according to their “tables”, while the value of a real estate necessary for a bank loan is being determined exclusively by authorized estimators.

4. Who can buy a real estate in Croatia?
There are no obstacles for purchasing a real estate in Croatia but to be able to enlist it in Land registry, along with purchase agreement, one must provide proof of Croatian citizenship.

5. Can foreigners buy a real estate in Croatia?

Yes, in that case they have to ask from Ministry of foreign affairs consent for the contract based on which they are purchasing the real estate, so that that consent can be used with a proposition to enlist for rights of ownership. Since 1st of February 2009, EU citizens, according to regulations from Stabilization and Association Agreement, are made equal with Croatian citizens in right to obtain real estate, with exception of farming land and areas protected by Law for nature protection.

6. Who can sell a real estate in Croatia?

Every real estate owner enlisted in Land registry but also those not enlisted, in which case the buyer gets out of the registry ownership and to get it enlisted in Land registry on his/her own name, legal order must be proven.

7. What are buyer and seller obligations in real estate trade?
Buyer is obliged to pay off to the seller the whole amount of agreed upon purchase price and the seller is obliged to give the real estate to the buyer and allow transfer of ownership.

8. How much is the deposit for a real estate when buying one?

According to the agreement, usually it is 5 to 10 percent from the agree upon purchase price, according to law defined maximum.

9. Where does one certify purchase agreement and by whom?
Singnature on purchase agreement is being certified only by seller, using public notary in Croatia, and while abroad, with Croatian diplomatic representatives or a notary in which case the certificate needs to get apostille.

10. What is tabular statement?
Statement by which the seller states that he received from the buyer the full payment agreed in purchase agreement and by which he allows the buyer to transfer ownership to the real estate in question.

11. Where does one certify purchase agreement and by whom?
Buyer certifies it in the amount that sums up to 5% of real estate market value. Buyer who is buying his first real estate in a manner explained and according to conditions in Law of exchange and amendments of the Law on Mediation in Real Estate Taxing, is free of paying taxes in full amount. All instructions related to this case, the buyer can request from his mediator.

12. Is tax being paid while substituting real estates?
Yes, every person to acquire a real estate is paying real estate transfer tax in value of 5% from market value of a real estate he/she is gaining.

13. How long does it take to apply and pay real estate taxes?
The buyer is obliged to report, within 30 days, new tax liability to tax substation and within 15 days from the day of receiving settlement confirmation, that tax needs to be paid.

14. Can a buyer request entry of ownership rights before settling real estate taxes?
Yes, obligation to get “green seal” has been abolished.

15. Who is paying and when the VAT while buying a real estate?
VAT tax payer during purchase of new building real estate is the buyer, who is paying this tax already included in total purchase price, in which case he doesn’t have to pay real estate transfer tax, otherwise it would be considered as paid twice. Unfortunately, according to special regulation of tax administration, contrary to principle of real estate unity, buyer pays tax on land transfer below and around the building in which the apartment is located, at the same rate.

16. Are buyer and seller liable for any other taxes except real estate tax?
Real estate seller is viable to paying VAT if he is selling before mentioned real estate sooner than 3 years from the time of purchase, VAT being paid on a difference between purchase and selling price – that obligation can be mitigated though.

17. In what way is rent of real estate being taxed?

When physical person rents a real estate, tax base is made out of monthly rent, reduced by flat-rate costs (30%). If the calculated tax base is lower than 2.400kn monthly, it’s being taxed with 20% VAT plus surtax and if it’s higher than 2.400kn, 35% VAT plus surtax. If real estate is being rented by a legal entity towards another legal entity or physical person, 25% VAT is being paid but instead of income tax, they are paying profit tax at the end of the year, which surmounts to 35% of total profit gained. While renting rooms and other spaces, all taxes are calculated the same way, but the tax base is lower, seeing that it’s created by deduction of flat-rate costs (50%).