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Property Faq
The cost of buying in Croatia
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For simplicity I’ll repeat the buying schedule as it appears at the top of the ‘Legal information’ page and note the costs at each stage. You’ll notice that the majority of properties for sale in Croatia are advertised in euros, but the actual sale must be in HRK, the Croatian kuna (more about this later).
Value Added Tax (VAT), or PDV, as it is known in Croatia, is currently at 22%. It is charged on all estate agent’s and lawyer’s services and, in one particular circumstance, when the seller is registered for PDV, it is payable on the price of the sale. In this circumstance the seller is likely to have set the price of the property to include PDV so that its total price won’t exceed its market value. In other words it won’t cost you any more, but it is as well in this type of sale to be absolutely sure, before buying, that the advertised price includes PDV and is not plus PDV.
The prices of properties in Croatia can vary enormously. They can range from 10,000€ for an old house to renovate in the mountains to an average 180,000€ for a house with several apartments in one of the more popular destinations, such as the Makarska Riviera or Hvar. The prices of comparable property along the coast in other Mediterranean countries will be at least double the prices you’ll find in Croatia.
The costs of the buying process
1. Estate Agent
Typically, estate agents charge about 2.5% of the selling price to both the buyer and the vendor.
2. The structural survey
It is impossible to quote a price here as one property will be different to another but the fees of structural surveyors and architects in Croatia are comparable to those in Western Europe.
3. Find yourself a lawyer
Lawyers will typically charge 1.5% of the selling price, which will include a search of the Land Registry and preparation of the purchase contract. There are no legal guide lines for lawyers’ fees so it is advisable to agree a price with your lawyer before engaging his or her services.
4. Preliminary contract stage
The preparation of the pre-contract by the estate agent (with the help of your lawyer, if you have one) doesn't involve any fees but you will be required to pay a deposit of between 5-10%, the amount being decided between the contractual parties. Naturally, the estate agent will give you a receipt for the money.
5. Permission to purchase from the Croatian Ministry of Foreign Affairs
This only concerns those who want to buy real estate as a private individual. The charge for making the application is HRK 20.00 (about 3€) and the charge for the decision is HRK 50.00 (about 7.5€).
Please see below for the costs of forming a Croatian registered company. This is a way for foreigners to buy property in Croatia without having to ask for permission from the Croatian Ministry of Foreign Affairs.
6. Certification of contracts by a Public Notary
Whether you are buying the property as a private individual or as a Croatian registered company the contract of sale is signed in front of the Public Notary. As a foreign purchaser the presence of an official court translator is obligatory. The notary’s fees are very low, in the order of HRK 90.00 (about 14€), since the notary only certifies the signatures, and the translator’s fee is usually in the order of HRK 400.00 (about 60€).
Transfer of money. Although the price of the sale in the contract will be in euros, the transaction must be completed in kunas. You have to transfer the amount of euros in the contract to a euro account in Croatia and then transfer this into a kunas account. It is from your kuna account that you pay the vendor, but he or she usually wants to be paid in euros, so you have to exchange the money back again to euros! So why doesn’t one just pay the sum directly in euros? I’m sorry but I don’t understand it either, but that is the way it is. Anyway, with all this juggling of money between different currency accounts the bank will take a cut each time and you’ll find that a house you thought was going to cost you 150,000€ has cost you 151,000€. In short, you’ll have to add on about 0.75% of the sales price for the transfer of funds to the vendor.
7. Submission of documentation to the Land Registrar
These fees are again very small, in the order of HRK 400.00 (about 60€), and should be included as part of your lawyer’s fees of 1.5% of the selling price. You will need to discuss this with him or her.
8. Payment of Real Estate Purchase Tax and/or PDV
A purchaser, whether a private individual or a Croatian registered company, must always pay 5% of the real estate’s value as Real Estate Transfer Tax on the land element of real estate.
If an investor purchases a piece of real estate with a building the construction of which was completed before 31 December 1997, then Real Estate Transfer Tax will apply to the building element of the real estate as well as the land. If Real Estate Transfer Tax applies to the building element of a real estate, then PDV will not apply to the sale. Real Estate Transfer Tax is assessed on the market value of real estate, as determined by a commission from the local tax authorities. Real Estate Transfer Tax is due after the contract of purchase and sale is executed and is due within 30 days of its issuance.
Real Estate Transfer Tax is not recoverable.
If a piece of real estate contains a building that was built, delivered or paid for after 31 December 1997, then the purchaser incurs an obligation to pay PDV on the portion of the purchase price attributable to the building, if the seller is PDV registered. If a PDV obligation is incurred for the building, then Real Estate Transfer Tax will not apply to the building. The PDV rate in Croatia is currently twenty-two percent. If the seller is not PDV registered, then Real Estate Transfer Tax applies to both the land and to the building. In such a case, PDV will not apply to the sale of the real estate. The tax base for PDV is the amount invoiced for the real estate decreased by the value of the land on which Real Estate Transfer Tax should be paid. The basis for determination of the PDV liability is the invoice issued by the seller (if PDV registered).
If the purchaser is PDV registered, then PDV may be able to be recovered.
The cost of setting up a Croatian registered company
As previously stated on the ‘Legal information’ page, you have to first open a kuna account for your company with a minimum deposit of 20,000 kunas (about 3,000€). This is not a cost as the money can be used freely later once you have bought the property. The documentation is prepared by the Public Notary and again, because you are foreign buyer, an official court translator is obligatory. Typically the Public Notary’s fees, including all the stamp taxes, will come to about HRK 2400.00 (about 360€), and the translator’s fee will be in the order of HRK 400.00 (about 60€).
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