You Would Park The Money, But You Don’t Know Where? Secrets Of Real Estate Investors Finally Revealed! Buying An Apartment In Croatia Explained


No property tax


Unlike in Serbia, apartments and other real estate in Croatia are not subject to property tax. This means that regardless of whether the owner lives in the apartment or cultivates the land, there is no tax which he pays on the property. This is particularly interesting for land successors in Croatia, as well as for the people who want to invest in buying an apartment or house in Croatia. Currently, there are communal contributions that are paid depending on the square footage of the property and its purpose, and their amounts are negligible.

When reselling the property, the difference in price is taxed, if the property is sold within two years of purchase. If the real estate was used for the owner’s residence, no tax is paid on the difference in realized price.


Property transfer tax only 3%


Real estate sales tax is paid at the rate of 3%. Real estate transfer is actually a case of buying or donating real estate, and it is paid by the new owner every time the real estate is acquired.


Apartment as a guardian of capital


Real estates that were purchased as investments in Croatia serve mostly either as “guardians of capital” or are used as rental properties. An apartment in Zagreb, Rijeka, Split or Dubrovnik is an excellent guardian of capital, because real estate prices are constantly increasing at rates of over 10 and 20% per year.


Such properties also serve as a source of rental income. It is not possible to rent an apartment of about 60 m2 in Zagreb for less than 700 euros per month, while apartments that are luxuriously furnished and in better locations reach a rent of over 1,500 euros per month. The rental market is affected by the increasing number of Erasmus students from all over Europe and the immigration of Ukrainians, Russians, and the so-called digital nomads from all over the world.


Due to the rising prices of new buildings, there is an increasing number of young families who do not meet the conditions for getting high loans, so renting is their only option.



Business premises are particularly profitable


Office spaces in Zagreb are rented for a price of 13 to 25 euros per m2 per month. Parking spaces are rented for a price of 100 to 150 euros a month. The situation is a little more favorable for tenants in other cities, although in historic city centers such as Korzo in Rijeka, rent prices reach up to 15 euros per m2 per month. This does not include the 25% VAT.



This is also the reason why there are so-called fictitious business addresses for businesses that do not need space for their activities.



In Croatia, business premises are not rented, but leased. The difference is that whenever there is a lease, it is understood that business activity takes place in the space.


Tax on rental income only 10%


The tax on income from renting apartments is 10%, and a local surcharge is also paid on top of that. This is the so-called final taxation, regardless of whether the owner has other income, whether he is employed and how much his income is.


Tourist rental – tax-free up to 30,000 euros per year


If the apartment is used for the so-called tourist rental, no rent tax is paid, but the owner registers in the landlord system. The lessor then pays annual income tax in a flat amount per number of beds. Each municipality determines the amount of this tax, but it does not exceed 200 euros per two beds in total per year. Income from tourist rental up to EUR 30,000 per year is tax-free.



VAT of 25% is paid only after exceeding the amount of 30,000 euros per year.


Buying real estate directly from an investor – caution required


Buyers use the services of a lawyer when buying apartments and other real estate. The reason for this is that most of the new buildings were sold before the building was completed and before the floor plan of the building was even carried out. This is necessary because real estate agencies have no interest in rejecting potential buyers from investment, as their priority is often only selling.


The use permit is proof that the building is ready for tenants to move in and that it meets all the conditions for living. When a buyer uses a bank loan to finance an investment, a use permit is mandatory. When the real estate does not have a use permit, it must be obtained before concluding the sales contract in a special procedure.


PS. Without the use permit and the permission of the investor, it is not possible to register the buyer in the land register. Only after registration in the land register, the buyer acquires ownership of the real estate. The investor gives permission for registration in the form of a so-called clausula intabulandi. But, to avoid issues or losses, consider hiring an expert for property law matters who will help you realize your objectives without any mistakes.

For more information on this or any other legal, tax, or business topic, you may freely and with no charges reach out to us at [email protected] at any time or call us on the phone number +381113281914 during every working day from 08:30 to 16:30.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your AK STATT representative, or other competent legal counsel.

    Ready to Achieve Your Goals? Contact us Today.

    Fill out our quick contact form below. Shortly thereafter we’ll let you know how to proceed. It’s that simple.

    By submitting your contact information, you agree that we may contact you by telephone (including text) and email in accordance with our Terms and Privacy Policy.

    Call Message