Tips for overseas investors to buy real estate in Croatia

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The magnificent landscape of Croatia beckons overseas investors from all over the world who are eager to buy a property here. The moderate tropical climate and charming and peaceful environment of Croatia coupled with warmth and hospitality of Croatians have been the motivating factor for foreign buyers to invest in a holiday home or a retirement home in this beautiful country.

Real estate investment in Croatia by European Union citizens has become quite simplified as the Croatian government has removed all restrictions on them for buying a property in the Republic of Croatia. The waiting period has reduced considerably and they don’t need to undergo special procedures as the new law ensures the same treatment at par with Croatian investors. For Non-EU citizens also the restrictions have been relaxed to boost the real estate industry in Croatia. Cutting down the lengthy administrative procedure is an important step towards the liberalization of the real estate market in Croatia.

For foreign nationals interested in buying a property in Croatia there is a precondition that their native country must have a reciprocity agreement with Croatia. They can buy property in Croatia with the exception of farmland and woodland by applying for approval from the Croatian Ministry of Justice. They need to hire a competent lawyer who can guide them through the purchase process and ensure that all the documents are delivered to the Ministry on time.

Foreign nationals can also invest in Croatian real estate by setting up their own business and buying the property through that company. Non-EU foreign nationals who don’t want to wait for the approval of the Ministry of Justice can get the title deeds of the property much faster by buying via a private company. This is a better and faster alternative and you get tax benefits also.

When you buy real estate in Croatia, you are required to pay the real estate tax. Property purchase tax amounts to 3% of the total value of the property mentioned in the sales contract. The real estate documents are required to be certified by a notary who is obliged to submit a copy of the purchase contract to the tax administration of the Republic of Croatia. In case the real estate documents are not certified by a notary, the buyer is obliged to pay the real estate tax within thirty days for those properties that have not been subjected to the value-added tax.

Foreigner nationals are prohibited from buying forest or agricultural land or any property which comes under the ambit of the cultural monument in Croatia. Once the pre-agreement contract between a buyer and a seller is ready, the buyer has to pay 10% of the selling price. It is strongly recommended to check the legal ownership of the property before making a pre-contract agreement. The application is submitted to the Ministry of Foreign Affairs along with the purchase agreement, proof of ownership from the seller, and certification that the property is within the boundaries of the construction zone envisaged in the urban development plan. For the benefit of the buyers, the Croatian government mandates sellers to pay double the amount of the deposit if they fail to fulfill the terms of the agreement.

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