SERVICES FOR BUYERS

An OIB is a personal identification number used as a permanent identification mark of each person used by public administration bodies in official records in their daily work and in the exchange of data.

A foreign natural or legal person in Croatia should have an OIB if it is entered in the official records of persons and property in the territory of the Republic of Croatia and becomes a taxpayer in the Republic of Croatia according to a special regulation. This includes registration in the land register, opening a bank account or establishing a company, as well as registration in the court register of a commercial court (director, member of the company). The OIB is issued by the local tax authority. Your presence is not required to obtain an OIB, but the OIB can be obtained by a lawyer before the sale. You can read more about this at the following link:

http://www.porezna-uprava.hr/en/Pages/PIN.aspx

All citizens and legal entities from EU countries, as well as citizens of the Republic of Iceland, the Principality of Liechtenstein and the Kingdom of Norway, can buy and own real estate in Croatia without restrictions, provided that the property is located within the boundaries of the construction area in accordance with the spatial planning documentation.

Third-country targets (non-EU and non-EU countries, Iceland, the Principality of Liechtenstein, the Kingdom of Norway) can buy real estate under the same conditions as EU citizens, but provided that they obtain prior consent from the Ministry of Justice and Administration to acquire specific real estate.  The Ministry will issue consent to citizens of countries with which there is reciprocity to acquire ownership rights in real estate in the Republic of Croatia, and you can check the updated list of countries with which there is reciprocity at the following link:

https://mpu.gov.hr/information-on-reciprocity-in-the-acquisition-of-ownership-rights-in-real-estate-between-the-republic-of-croatia-and-countries-other-than-eu-member-states-republic-of-iceland-principality-of-liechtenstein-kingdom-of-norway-or-swiss-confederation-25361/25361

I do. The sales contract can be concluded from abroad.

Notaries are obliged to certify the seller's signature on the sales contract, but there is no legal obligation to certify the signature by the buyer of the property. The buyer is obliged to sign the sales contract in his own hands and can then send it by registered mail to Croatia (to a lawyer engaged by the buyer or our agency). After the signed sales contract arrives in Croatia, we will arrange for the seller to sign the contract in front of a notary public, which concludes the contract and is fully legally valid. In addition, a contract on your behalf and for your account on the basis of a power of attorney can also be signed by a lawyer.

Even in the case when the seller is abroad, it is possible to conclude a distance contract. In this case, the seller should certify his signature on the sales contract in the country in which he is located, together with the accompanying seal called apostille (only in cases where apostilla is necessary – depending on the country in which the contract is certified).

More information about apostille can be found at the following link: https://en.wikipedia.org/wiki/Apostille_Convention

The document must then be delivered by registered mail to Croatia, and a certified court interpreter must translate it into Croatian before it can be used as a legal document for the conclusion of the sale.

No. In order to make sure that the ownership of the property is in order, i.e. that the seller is also the beneficial owner of the property and that there are no burdens or other rights of third parties on the property, a lawyer who possesses the necessary knowledge should perform an in-depth analysis of the proprietary legal relations on the property. During this analysis, it is necessary to examine not only current land registry extracts, but also historical land registry extracts as well as the entire documentation on transfers of rights in the land registry.

Namely, in the 1990s, the transformation of the so-called "social" property into private property was carried out in Croatia, and a series of regulations was adopted by which the right of ownership was acquired by certain persons, such as the Republic of Croatia. Therefore, in practice, we have encountered cases where one person is listed as the owner in the current extract from the land registry, and that the actual (off-book) owner is a third party. In addition, for the last 10 years, croatia has been transcribing land registers from manually managed to digital land registers. When copying, there is a risk that the court inadvertently deletes some rights of third parties without any basis (e.g. easement right, lien, etc.). In such a case, the holder of a right which has been deleted may obtain a re-registration of that right in the land register by judicial means.

In Croatia, trust protection applies to most of the real estate. The above means that it is assumed that the land register truthfully and fully reflects the factual and legal situation of real estate, i.e. that what is registered in the land register exists and that what is not registered in the land register does not exist. However, the basic presumption for the application of the principle of protection of trust in the land register is that the acquirer acted in good faith, i.e. that at the time of the conclusion of the sales contract and at the time when he requested the registration of book law, he did not know and, given the circumstances, had sufficient reason to suspect that what was registered in the land register was not complete or that it was different from the off-book situation. Since the land registers are public, anyone can inspect the same and the entire documentation. Therefore, if by reviewing historical extracts from the land register and documentation that lies in the land registry, one can suspect that what is registered in the land register is not complete or that it is different from the off-book situation (e.g. that a person registered as the owner is not the owner of the property or that some burden has been wrongly deleted from the property), then the buyer cannot invoke trust in the land registry.

In view of the above, and in order to eliminate any risks during the purchase and sale, before concluding a pre-contract / contract on the sale of real estate, we advise that the buyer hire a lawyer who will perform an in-depth analysis of the property. Our agency cooperates with excellent lawyers who are specialized in real estate law and land registry and have rich years of experience in the above and we can confidently recommend them. These lawyers, in addition to Croatian, provide their services in English and German and all documentation (including pre-contract/ contract on the sale of real estate) with Croatian, according to your wishes, in German or English.

In order to make sure that after the payment of the purchase price you will acquire the right of ownership of the property without any burdens, the purchase agreement must be drawn up in such a way that your interests are fully protected, i.e. that there is no theoretical possibility that there is no theoretical possibility that in the meantime some right of third parties will appear on the property that will prevent the registration of your right of ownership or limit your rights. Lawyers with whom our agency cooperates approach each sale individually and adjust the contract to the specific case, in order to ensure that on the one hand the buyer is sure that when he pays the purchase price, he will acquire the right of ownership on the property without burdens (which have not been agreed), and on the other hand, that the seller is sure that the right of ownership will be transferred only when the purchase price is fully paid to him. All pre-contracts/contracts can be drawn up by our lawyers, at your request, in English or German.

The moment of taking possession depends on the agreement between the contracting parties. However, in practice, the possession is most often taken over after the conclusion of the purchase agreement and the payment of the entire amount of the purchase price.

I do. In Croatia, for now, only one bank offers the possibility of loans for the purchase of real estate to non-residents, with an extremely high interest rate, which is usually the reason why non-resident buyers do not often decide to buy real estate in Croatia through a bank loan in Croatia. Resident buyers in much larger numbers use the bank lending service when buying real estate in Croatia. However, buyers who are foreign nationals often obtain a loan in the country of their domicile/residence and our lawyers register a mortgage in the land registry for the benefit of a foreign financial institution.

I do. This is a procedure that is done after you become the owner of the property. Our agents will help you in this process. The seller is obliged to settle all obligations and payments of all overhead costs until the day of taking possession of the property.

We strongly advise you to hire a lawyer in particular for the reasons stated in the answers to questions 5 and 6. We believe that this is a very important item in the sales process. A lawyer should be impartial and specialised in real estate law and land registry law and have the necessary experience in conducting sales proceedings. As a customer, it is necessary that you receive impartial and correct legal advice in order for your interests to be fully protected. We believe that clients should have full and independent legal protection when selling/buying real estate. You can independently choose the lawyer you want, and we can recommend professional, verified and experienced lawyers from our trust who can offer their entire service both in English and German.

The services included in the attorney's fee depend on the agreement between you and the individual lawyer. The following services are included in the remuneration of trusted lawyers of our agency:

– in-depth examination of the land registry status of real estate (so-called due dilligence real estate),

– obtaining a certificate that the property is located within the construction area (which is a prerequisite for foreign buyers who are eu nationals to acquire the property),

– obtaining a personal identification number (OIB),

– consulting within the purchase and sale,

– drafting a bilingual (Croatian/German or Croatian/English) pre-contract/purchase agreement,

– recording/pre-registration/registration of ownership rights in the land register,

– management and coordination of the entire purchase and sale process.

I do. Lawyers and banks use special purpose accounts – 'escrow' accounts while notaries have trust accounts. If necessary, payments can be made to the lawyer's 'escrow' account. The role of the 'escrow' account is protection.

If you are buying a property, the 'escrow' account represents the certainty that the purchase price will not be paid to the seller until the buyer fulfills all the obligations stipulated in the sales contract. If you are a seller, you are protected that the property you are selling will not become someone else's property until you are paid the money established by the sales contract. Thanks to the 'escrow' account, you are protected in whatever role you are in. Feel free to contact us for more information on this issue. However, we point out that the use of 'escrow' accounts is associated with additional costs, and the above-mentioned security can largely be achieved by a well-drafted sales contract in which the structure of the transaction is adapted to a particular case. See the answer to question number 6.

Real estate transfer tax is a tax that is paid when acquiring real estate and is currently 3% (as of 1.1.2019. The tax base is the market value of the property at the time of the incursion of the tax liability. Payment of real estate transfer tax is the buyer's obligation, and is paid after the conclusion of the purchase agreement and after the tax administration issues a decision on the obligation to pay taxes. The buyer must declare the occurrence of a tax liability if the purchase agreement is not signed before the Croatian notary public. If the purchase agreement is signed before a Croatian notary public, the tax return is made by a notary public.   The collection of this tax itself can sometimes take several months, but in no case does it affect the exercise of the ownership rights of a new buyer.

There are cases where the buyer does not pay this tax. These are cases when a property is sold by a legal entity that is in the VAT system. The legal entity must then issue an invoice for the sale of real estate from which it is clear that VAT has been calculated and included in the price of the property, in which case there is no double taxation. This is usually the case with apartments and houses in new buildings that are purchased from legal entities.

In principle, in Croatia there is a tax on income from the alienation of real estate paid by the seller, and the same is calculated in cases where the property is sold within two years from the date of acquisition of the same. The basis for calculating corporate income tax is the difference between the market value of the property (sale) and the purchase (purchase) price of the property, and the tax is calculated at the rate of 20%. No tax is paid if the property was used for housing to the taxpayer or dependents of his immediate family.

If the property is sold after the expiration of the period of two years from the date of acquisition of the property, no tax on income from the alienation of real estate is paid. Also in the case when the owner permanently lives (has registered residence) in the real estate in question, income tax from the alienation of real estate will not apply either in the case of the sale of real estate and before the expiration of a period of two years.

Furthermore, income tax from the alienation of real estate is also calculated in cases where the seller disposes (i.e. sells) three or more properties within five years.

Please note that different tax rules apply for legal entities selling real estate.

For more information contact us and we will connect you with tax and accounting experts.

If the real estate is sold after the expiration of a two-year period from the date of the acquisition of the real estate, no income tax is paid from the sale of the real estate. There is no obligation to pay the mentioned tax if the taxpayer (buyer) or dependent members of their immediate family lived in the real estate even in the case the real estate is sold before the expiration of the two-year period. Furthermore, income tax from the sale of a real estate must also be paid if the seller alienates (that is, sells) three or more real estates within a period of five years.

Please note that different tax rules apply to legal entities when selling real estates.
Contact us for more information and we will bring you into contact with tax and accounting experts.

In Croatia, all holiday properties are subject to annual taxes on holiday homes. The amount of tax is prescribed by the local self-government body and it can vary from 0.66 EUR to 2.00 EUR / m² per year, depending on the area in which the property is located. The annual tax on holiday homes only applies to properties used as holiday homes. If the owner of the property has declared his residence in that property, in this case the owner of the property will be exempt from paying this tax.

More about this: https://www.poreznauprava.hr/HR_porezni_sustav/Stranice/porez_kuce_za_odmor.aspx

I do. Whether you want to buy a property that you will enjoy on the Adriatic coast, or you want to enter the business of tourist rentals, Croatia is an ideal destination for you.

The current VAT rate in Croatia is 25%.

The role of a notary in the sales process is the certification of the seller's signature. Without notary certification of the seller's signature, the contract cannot be implemented in the land registry. The signature of the buyer on the final contract does not need to be certified by a notary public. In addition to the certification of signatures with a notary public, certain documentation (tabular statement, deletion statement) issued by a notary public may be deposited in the deposit procedure after meeting the precisely prescribed conditions.

Below we present just some of the reasons why you should choose Regent d.o.o.:

• Regent is an agency specialized in buying and selling real estate to international clients
• Regent can provide you with a comprehensive service in the process of buying and selling real estate including lawyer services, financial consulting services and all other services for which there is a need in the process of buying and selling real estate
• Regent is a licensed agency with extensive experience in real estate brokerage
• all our agents are experienced and professionally trained consultants for buying and selling real estate
• all our agents are Croatian citizens who, in addition to Croatian, are fluent in English, while some have knowledge of two or more foreign languages
• Regent has a rich offer of all types of real estate.  We offer exclusive real estate, luxury villas, traditional stone houses, building and agricultural land, high-quality modern apartments, as well as real estate of acceptable prices along the entire coast
• sellers and buyers contact us because we are known for efficient and fast real estate sales
• we respond quickly and efficiently to all your inquiries, whether by e-mail, phone or in personal contact
• based on many years of experience of our agents in this business, we will be happy to advise you professionally and guide you through all phases of the real estate buying and selling process in Croatia.

• agency commission of 3% + VAT = 3,75% (min. 3.000,00 € + VAT)
• attorney's fee from 0.5% to 1.5% (depending on the amount of the agreed purchase price of the property)+ VAT = 0.63% to 1.88 % (min. 2.000,00 € + VAT) plus lower amounts of court fees
• real estate transfer tax = 3% (one-time payment)
• annual tax on holiday homes in the amount of 0.66 EUR to 2.00 EUR per m² of real estate, which is paid once a year
• notarial costs for certifying the signature of approx. 10,00 EUR, and if the documentation is deposited in a notarial deposit approx. EUR 133.00 per document.
•  

Annual tax on holiday homes in the amount of EUR 0.66 to EUR 2.00 per m² property (depending on the location). In addition, there is a monthly utility fee whose amount depends on the local municipality, as well as the usual utility bills that are paid according to consumption (water, electricity, etc.).

An example of approximate monthly amounts for a property of about 100 m²:
– Electricity ———————————————————— 50 € to 100 €
– Water ————————————————————- 20 € to 50 €
– Municipal waste collection and other local services ——— – € 15
– Internet and TV ————————————————— – 30 €
– Annual property tax —————————— max. 2 € / per m² (i.e.  .max. 200,00 € per year)

Currently, foreign citizens cannot buy agricultural land in the Republic of Croatia. However, if you want to buy agricultural land, you can establish a company in Croatia and buy land through that company (the buyer of agricultural land would be a company based in Croatia).

On 23 June 2023, the ban on the purchase of agricultural land for EU nationals expires. From that date, EU nationals will be able to buy agricultural land without any restrictions. The only limitation is that on larger areas of agricultural land the Republic of Croatia will have the right of pre-emption, i.e. the land should be previously offered to the Republic of Croatia. If the Republic of Croatia does not exercise its pre-emption right, the owner of agricultural land will also be able to sell to Croatian citizens and citizens of any EU Member State.

If you decide to open a company, we can recommend our trusted lawyers who will prepare all the documentation and register the company with the competent commercial court. Your arrival in Croatia for the opening of a company is not necessary, but your arrival will be required only to open a bank account of the company (due to regulations on anti-money laundering and terrorist financing, most banks require a personal visit to a bank branch for identification).

Foreign citizens can currently buy agricultural land in Croatia only by establishing a limited liability company (d.o.o.). Opening a company in Croatia carries some additional and current costs.

• The minimum founding capital is EUR 2,500.00, which can be used for the needs of the company immediately after its inception.
• Notarial fees for establishment are around EUR 600.00 – EUR 800.00.
• Even an "inactive" company must have an accountant. Fees for these services vary from 100.00 Euros per month for inactive companies, to 300,00 Euros per month for companies that actually operate i.e. They do some work.
• There are also smaller monthly/quarterly fees that need to be paid to the state.
• The bank's monthly fee for maintaining a bank account is around EUR 15.00.
• Corporate income tax for companies with annual income up to hrk 7,500,000.00 is 12%.
• Corporate income tax for companies with annual revenues above HRK 7,500,000 is 18%.
• The tax on withdrawal/payment of realized profit is 12%.

If you decide to open a company, we can recommend our trusted lawyers specialized in company law who will prepare all the documentation and register the company with the competent commercial court. If you need additional information on the topic of establishing and operating a company from a tax point of view, we can also recommend tax advisors and accounting experts.

No. Buying real estate in Croatia does not automatically mean acquiring a residence permit for foreign citizens.

Here you can find more information about residence permits for foreign citizens: https://mup.gov.hr/stranci-333/333

I do. Also foreign citizens can rent their real estate in Croatia, provided that they have previously obtained the necessary rental permit called "categorization". A rental permit is not transferable, so after purchasing the property, you will have to request and obtain a permit in your name. Citizens from EU countries can rent real estate in their own name under the same conditions as Croatian citizens.

U.S. citizens and nationals of other countries outside the EU cannot obtain categorization in their own name. They have 3 options for how they can legally rent their property in Croatia:

1) Citizens of non-EU countries can establish a company with headquarters in Croatia and can decide to buy real estate through a (newly established) Croatian company registered for tourism activities. Categorization would then be obtained on Croatian society and the company would be obliged to pay all necessary taxes and other duties related to the performance of tourism activities.
2) They can decide to buy real estate in their own name and then establish a company through which they would legally rent their real estate – in the same way as under item 1)
3) After purchasing the property (whether the buyer will be a private or legal person), the owner of the property can conclude a rental agreement with a Croatian tourist agency. In this case, the tourist agency would obtain a categorization for the property in its name and the rental of the property would be carried out through the respective tourist agency.

It is a tax paid on income earned from renting real estate for tourist purposes. It depends on the nationality of the property owner, as well as whether the person is registered in the VAT system in his country. For more details, please contact our office.