Croatia Property Buying Guide
While many people simply visit Croatia on holiday, many are also interested in investing in the country, attracted by the warm climate, low prices, value for money and minimal crime rate. The interest in investing in property is growing fast. Prices are still significantly lower than Spain, France or Italy. Your money will go a lot further - prices are low and can be seen to be appreciating and property taxes are small.
Buyers from a country which has a reciprocal agreement for the purchase of real-estate with the Republic of Croatia can buy real-estate properties. Non-nationals can purchase any amount of property they like except agricultural land.
After you decide to purchase, the pre-contract is made. This contains the terms of purchase, to include the price; price; paying conditions; costs and taxes and the time and conditions of completing on the property.
The pre-contract is based on paying a deposit of around €6,000. This deposit has an important role - if the buyer does not pay the rest of the price in the agreed time, he looses the deposit. On the other hand, if the vendor sells the property to another purchaser during the agreed time, he must pay the buyer double the amount of the deposit.
A binding contract is formed by a solicitor and notarised by a notary. If you are intending to purchase a property in your own name, the next step is to apply for and receive permission from the Ministry of Law and the Ministry of Foreign Affairs giving an ultimate Act of Permission.
In the meantime an official note of the transaction in Land-registry is made. After getting the permission from the Ministry for Foreign Affairs the property is dully registered in the Land-registry at the Court. However, if you set up a business company in Croatia you can purchase the property without approval of the Ministry.
Purchasing Costs
5% buying tax (based on the value estimated by Ministry of Finance, which is very close to the market value)
2% solicitor’s and notary’s fees
When purchasing a property abroad you should also bear in mind, the ongoing costs associated with the property. The good news is that in Croatia these on going costs are extremly low. They include :
· Non-Resident’s tax is 1,60 US$ for sqm of the housing space annually
· Ground-tax is 0,26 US$ per square meter annually.
· Reserves are 0.52% of the market value of the property annually
· Garbage costs are cc 53 US$ annually
· Electric costs - one kWh is on 1.02.2000 US$ 0.058
· Water costs - one cubic meter of water is on 1.02.2000 US$ 1.18