More and more people decide to invest their savings. Bank deposits do not encourage low interest rates, while the stock market involves risk that not everyone can afford. No wonder real estate investments are becoming more and more popular. Some people decide to buy a flat or house in Poland, while some aim at foreign markets. Many Polish investors decide to buy real estate in Croatia. Why? It is a frequently chosen tourist destination, and many Poles are simply in love with Croatian landscapes, culture and people. Is it worth buying a property in Croatia? What is the real estate tax in Croatia? You will learn all this from our article.
Real estate tax: what is it?
There are two taxes related to the real estate market in Poland. It is primarily a real estate tax, which is paid annually by owners, co-owners and perpetual usufructuaries of buildings, structures or land. There is also a tax on the sale of real estate, which is related to a transaction between natural persons involving real estate. This fee is paid by the seller and most often simply adds it to the final price of the house, apartment or land.
In Croatia, real estate tax also exists, but it operates on slightly different principles. This tax is primarily a stamp duty paid by the buyer of real estate in Croatia, not the owner of the real estate. The tax amount is a predetermined percentage of the market price of the house, apartment or land. However, this applies to the acquisition of real estate for consideration, i.e. by purchase. In other cases, such as inheritance, gift or life easement agreement, the tax base may differ slightly.
What is the property tax in Croatia?
The purchase of real estate in Croatia by European Union citizens has only been possible since 2009. It was then that Croatia opened its market to foreigners and not only people running companies in Croatia could buy houses, apartments or land. Currently, all EU citizens can acquire ownership of real estate in Croatia on the same terms as Croatians. This involves certain obligations, including paying tax. This is a tax not on the sale of real estate, but on the purchase of real estate, i.e. it is paid by the purchasing party. How much is this tax?
From 2019, the tax on the acquisition of ownership of real estate in Croatia is 3% (tax rate calculated on the market value of the real estate). Previously, this tax amounted to 4%, but the decision to reduce the stamp duty was intended to encourage more real estate trade in the country. Reducing real estate tax in Croatia is a solution that pleased not only Croatian citizens, but also many foreign investors, because it directly translated into lower prices on the market.
When does tax liability arise? Property in Croatia
The tax obligation regarding the transfer of real estate ownership occurs at the moment of concluding a real estate purchase and sale agreement or signing another document confirming the manner of purchasing the real estate. It is worth noting, however, that only the signing of a given document by both parties to the transaction is binding.
Despite the theoretically simple method of calculating tax, many people decide to use the help of a lawyer or legal advisor. This is a good solution that we recommend to our clients, because purchasing real estate in another country, in this case in Croatia, is associated with several legal complexities, which are not a problem for people in the industry, but for investors unfamiliar with Croatian law, tax regulations may seem complicated. Moreover, a lawyer can also supervise the process of constructing a real estate sales contract in Croatia, which ensures 100% security and legality of the transaction.
How to buy real estate in Croatia?
There are several ways to buy property in Croatia. One of them is to look for real estate on your own using local portals. For people who do not know the rules of the local market and the language and are just starting their adventure with Croatia, this is an uncertain and time-consuming solution. If you want to start buying real estate in Croatia on your own, it is better to use the help of friendly Croatians. However, neither one nor the other solution will provide you with a professional search and an appropriate approach to formal and legal issues.
At Nestovia, we focus on maximum customer satisfaction. We approach each case individually because we know how important a life event is buying a property in Croatia. It is a beautiful country that offers paradise views and sunny days. We will help you at every stage of purchasing real estate in the Republic of Croatia and guide you through all the intricacies related to the taxation of the transaction and make sure that everything is done legally, in accordance with the regulations applicable in Croatia.
Is it worth buying a property in Croatia?
Many people wonder whether it is worth buying a property in the Republic of Croatia. There is only one answer – definitely! Owning real estate in such a beautiful country is not only a great investment, but also a solution that will allow you to create your own place on Earth. For many people, a base in Croatia is a dream come true of a paradise life without worries. If you have your own apartment or house on the Adriatic Sea, it may turn out that what was supposed to be just a holiday adventure will turn into true love for this unique country. Who knows? Maybe Croatia will become your second home?
Real estate tax in Croatia – is it profitable to purchase real estate in Croatia?
If you don’t know yet whether it is worth buying real estate in Croatia, it is worth answering the question: is it also profitable in financial terms? Yes, purchasing real estate in Croatia is a profitable solution from an investment point of view. At stake is not only the possibility of later selling the property at a profit or a stable investment of money, but also a real business related to the real estate industry. It is mainly about renting the purchased premises. In this way, it is possible, for example, to repay a loan taken out for the purchase of real estate or generate passive income.
Croatian citizens and foreign investors registered in the country must pay income tax or revenue tax or a flat rate per bed when renting real estate for apartments. At Nestovia, we also offer assistance with properties intended for rent. We check, control and keep the investor informed about the condition of his real estate. We will also take care of all necessary payments, including utilities. This way you will get professional help with Croatian property rentals.
FAQ
In 2019, the real estate tax was reduced from 4% to 3%. For real prices on the real estate market, this means lower amounts that both Croatian citizens and foreign investors pay to buy a flat, apartment, house or land.
It is definitely worth buying a property in Croatia. This is not only a great way to spend your holidays, but also an investment that can bring real profits, e.g. from renting a flat. Such a property can also be renovated and sold at a profit in a few years.
There are several ways to buy property in Croatia. You can look for a suitable house or apartment on your own, use the help of friendly Croatians, or decide to cooperate with a professional real estate agency, such as Nestovia. We will guide you through all stages of purchasing real estate!