Purchase Fees for Properties in Croatia
The fees have undergone tax changes since January 1, 2019 (with reduced rates) When purchasing property from a seller who is not a VAT taxpayer, the property transfer tax rate has been reduced from 4% to 3% of the agreed purchase price. When purchasing property from a seller who is a VAT taxpayer, the property transfer tax rate has changed as follows:a) For a new property - younger than 2 years from the date of inspection and not used for residence or rental, the new buyer is now exempt from property transfer tax. The seller who built the property pays VAT at 25% of the purchase price.
b) Sellers selling land with a building permit also pay 25% VAT, and buyers are exempt from a 3% property transfer tax.
Usually, the property transfer tax is paid within one to several months from submitting the property transfer request to the relevant authorities, based on a call from the local tax office.
Additionally, there is a fee for the complete service associated with the purchase and transfer of the property, which amounts to approximately 1% of the property's purchase price plus VAT on the fee.
If the purchase is made through a real estate agency like CroReal.com, the buyer typically pays a commission of 3% of the property's purchase price after signing the purchase contract. For properties with a purchase price lower than 67,000 EUR, the commission is 2,000 EUR plus VAT on the commission (VAT 0). For some offered properties, the commission can even be 0%. According to Croatian law, the commission can reach up to 6% of the property's price.
Regarding Annual Fees and Taxes for Properties in Croatia:
Owners of properties with permanent residence in Croatia do not pay any annual property tax, unlike the situation in the Czech Republic. For recreational properties, owners pay a recreational property fee of approximately 0.5-2.5 EUR per square meter of usable area per year. The amount of this fee is determined by local authorities. Regarding the purchase of property through a Croatian business company (since February 1, 2009, it is no longer necessary, applicable to citizens from outside the EU), the establishment of the company requires a basic capital of approximately 3,000 EUR in cash, plus additional fees of approximately 1,500 EUR for setting up the company (lawyers, notaries). The company must maintain accounting, and the costs of its management depend on the requirements of the accounting firm, such as knowledge of English or German and the number of accounting transactions. These costs usually amount to at least 100 EUR per month.As for the income tax on the profit from the sale of Croatian property, the owner pays 35% of the difference between the purchase price and the selling price if the property is sold within 3 years of purchase. In the case of selling a property after 3 years from purchase, the seller is exempt from income tax.
If you are interested in foreign properties, Croatia is an excellent choice. Choose from our current offer of Croatian properties.
