Tax refund on first real estate: Where to apply, what documents are needed, what amount to expect

After the Law on Socially Encouraged Housing was passed in Parliament, young people buying their first property can look forward to significant assistance in the form of tax refunds. This law allows buyers of first properties to receive a refund of 50 percent of VAT or the entire real estate transfer tax, depending on the situation. Given that requests have already started to arrive, many are wondering when they can expect a refund and how to apply for this support.

How to exercise the right to a tax refund?

To exercise the right to a tax refund when buying a residential property, you must meet several conditions. First, you must be a citizen of the Republic of Croatia and have concluded a contract of sale for the property after January 1, 2025. You must also be under 45 years of age at the time of application and have your permanent residence registered at the address of the property you are buying, and all members of the immediate family must be registered and residing in that property.

Another important condition is the paid real estate transfer tax or an invoice with VAT displayed, which must be issued after January 1, 2025. Based on these proofs, you can request a refund of part of the paid tax.

What documents are required to submit the application?

Request for a tax refund is submitted to the Agency for Legal Transactions and Real Estate Mediation (APN), Savska cesta 41, 10000 Zagreb, on a prescribed form with documentation that proves the fulfillment of the conditions for exercising the right to payment of support. Here are the documents you need:

For the purchase of a residential property, the following is attached to the request:

• a copy of the identity card
• a contract of sale for the residential property for which support is requested, concluded after 01.01.2025.
• a copy of the land registry extract or an extract from the book of contracts
• a certificate of residence registration of the applicant and members of the immediate family at the address where the property is located, not older than 30 days from the date of submitting the Request
• proof of the sale of the property if they owned or co-owned a property that is not considered suitable within the meaning of Article 21, paragraph 4 of this Law,
• a decision on determining the real estate transfer tax based on the contract of sale of the property after 01.01.2025. and proof of payment based on the same or the seller's invoice issued after 01.01.2025. in which value added tax is displayed or value added tax is included in the purchase price of the property for which support is requested and proof of payment of the same
• the account number to which the support payment is requested and the credit institution where the account is held

For the construction of a family house, the following is attached to the request:

• a copy of the identity card
• a use permit for the family house that became final after 01.01.2025. and a contract for the construction of the family house on the basis of which value added tax was paid
• a copy of the land registry extract or an extract from the book of contracts
• a certificate of residence registration of the applicant and members of the immediate family at the address where the property is located, not older than 30 days from the date of submitting the Request
• proof of the sale of the property if they owned or co-owned a property that is not considered suitable within the meaning of Article 21, paragraph 4 of this Law,
• issued invoice or situation certified by a supervising engineer, based on which value added tax was paid, based on the contract for the construction of a family house, as well as paid invoices for design and supervision based on which value added tax was paid,
• the account number to which the support payment is requested and the credit institution where the account is held

All these documents must be submitted in copies, and the signature on the request must be certified.

When can you apply for a tax refund?

Submitting applications began on June 5, 2025, and you can submit it within 24 months from the date of concluding the sales contract. This means that you will have enough time to collect the necessary documents and submit the application for a tax refund.

When can you expect payment?

One of the most important questions that is asked among buyers is, of course, when can they expect a refund. According to information from the Ministry of Physical Planning, Construction and State Property, the payment of support can take from 30 to 90 days from the submission of proper documentation.

This means that if all conditions are met, and the documentation is properly submitted, the tax refund on the first property can be realized within a few months of submitting the application.

What are the conditions for a tax refund?

A tax refund can only be achieved if you are buying your first residential property. If you or members of your immediate family already own a property that meets the conditions for housing (equipped with infrastructure, minimum area), then you cannot exercise the right to a tax refund. Also, if you have already used state support for acquiring a property, you will not be entitled to a refund.

If you owned a property that is not considered suitable (e.g., smaller than 35 m² for one person), you must sell it within 24 months of purchasing the first suitable property in order to be entitled to a tax refund.

Tax refund and the price of the property

The price of the property plays a significant role in the tax refund process, because the basis for calculating the maximum amount of support is the product of the usable area of the apartment or family house to which the applicant is entitled, considering the number of family members, and the average price per square meter of the apartment in the local self-government unit in which the property is acquired or built. Average price per square meter of an apartment is determined according to the data publicly published by the Ministry responsible for construction.

For family houses, the calculation of the basis is based on the areas that are recognized according to the Law, which are increased by 50% depending on the number of family members. This means that, although the user can buy a property that has up to 50% larger area or up to 50% higher price per square meter compared to the prescribed one, the real estate transfer tax refund is paid only according to the prescribed area and price of the apartment in relation to the number of household members.

The calculation for the tax refund is made according to the average price if the contracted price of the residential property is higher than that price. In the event that the contracted price is lower than the average price, the calculation will be based on the contracted price.

The usable area of the residential property includes the net usable value of the floor part, which includes special parts of the apartment, auxiliary parts and appurtenances. For interior rooms (apartments), a coefficient of 1.00 is used, while for loggias, terraces, balconies and similar parts that are not interior rooms, specific coefficients are used, which are prescribed by law and can be checked on official links.

These rules aim to prevent an excessive increase in prices on the real estate market, ensuring that the tax refund is available to all young buyers who want to buy their first property, and not just those who can afford expensive luxury properties.

Here you can see an informative calculation of the amount of support for acquiring the first residential property.


Conclusion

The tax refund on the first property will be a great help to young people who want to become owners of their apartment or house. The Law on Socially Encouraged Housing allows for the refund of VAT or real estate transfer tax, but in order to exercise the right to this support, buyers must meet certain conditions and submit all the necessary documentation. With proper preparation, everyone who meets the conditions can expect a tax refund within a few months of submitting the application.

If you are young and want to buy your first property, don't forget to inform yourself about all the details related to the tax refund, because it could be a step towards achieving your housing goal.