BUYING PROPERTY IN CROATIA - THE FAQS

When acquiring real estate other than by inheritance, foreigners need to obtain the approval of the Ministry of Foreign Affairs of the Republic of Croatia. In Croatia the ultimate proof of ownership is entry of the owner's name in the local Land Book (Zemlijsne Knjige) on that specific property. The local courts will not allow a foreign citizen to be entered in the Land Books without the MFA approval.

When obtaining the approval of the MFA the following following documents have to be supplied:

• A written request signed by the petitioner and the sales contract
• An excerpt from the Land Book for the particular property. Usually obtained in each municipality at the land book division of the local municpal court.
• A document from the municipality from the Ured ya prostorno planiranje. The document is called Uvjerenje o Namjeni and states the use of the property.
• Proof of citizenship for both buyer and seller . Any photocopies have to be notarized by a Croatian Notary Public.

The buying process is quite quick in Croatia, anywhere from 3 days to 1 month, depending on the location of the client for document execution purposes. However the approval from the MFA can take between 3-12 months! This does not affect your ability to move in, begin internal refurbishments or letting out the property.

Clean Title

A clean title is VERY important. A Clean Title is when the seller has the legal authority to sell the property and there are no pending claims on the property before the courts.

Buying Costs

A Real Estate Transfer Tax (RETT) is levied on property sales. If you are buying a property built:

• Pre 31/12/1997 - 5% RETT* (Real Estate Transfer Tax) on the value of the contract.
• After 31/12/1997 from a VAT registered developer or self-employed builder - 22% VAT calculated on the costs to build the property. (Usually absorbed by the vendor into the price) plus 5% RETT calculated on the land value portion of the sale.
• After 31/12/1997 as a private sale - 5% RETT on the value of the contract (Assuming no refurbishment (extensions etc) have been carried out on the building which would attract VAT)

All purchases attract the following charges: Legal fees of 2% plus VAT (2.44) of the purchase price + €150 submission fees. (Minimum charge of €1,000)

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