Property Tax in Croatia
Property Tax in CroatiaUpdated on Wednesday 26th August 2020
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In Croatia, the property tax is paid on all buildings and lands, and it is set at a rate of 5% of the property price. There is also the VAT that needs to be paid for sold properties, plus other tax aspects a foreign or local investor or natural person should know, but for more details and legal advice you can talk to one of our lawyers in Croatia. Our team can also help foreign investors start a business in Croatia, by handling all the formalities, plus complete legal assistance.
What is the real estate transfer tax in Croatia?
The real estate transfer tax is imposed on properties that are sold, gifted or inherited, and must be paid by the new owner. 5% rate is the real estate transfer tax in Croatia, calculated on the final price of the property or land.
What is the VAT (PDV)?
The VAT or the PDV as it is known in Croatia is one of the most important taxes in the country, that is also imposed in the real estate sector. This kind of tax is paid at the time a property or land is traded, by the company or natural person who sold it. 25% is the VAT rate for sold properties in Croatia which is calculated based on the sale price. If you would like to know more about the property tax in Croatia, you can give us a call and talk to one of our Croatian lawyers. Our team is specialized in taxation matters in Croatia and can also help local and foreign entrepreneurs register for taxes in Croatia.
Are there any taxes for holiday properties?
Yes, owners of holiday homes must pay a property tax ranging from HRK 5 and HRK 15 per square meter. This kind of tax is imposed for owners of properties that are not used for permanent living. You can talk to us for extra information about the property tax for holiday homes in Croatia.
The capital gains tax for properties in Croatia
Properties in Croatia that are sold within 3 years after purchase are subject to the capital gains tax. This is another important tax obligation for property owners in Croatia that needs to be considered by sellers. It is good to note that the difference between the property value of the market at the time of alienation and purchase is the base for calculating the capital gains tax. Also, the capital gains tax is imposed on rented properties in Croatia, except the ones leased for tourists in Croatia, and paid by property owners. The property tax structure in Croatia can be entirely explained by one of our Croatian lawyers with experience in this important sector. Additionally, foreign entrepreneurs interested in starting a company in Croatia can talk to one of our specialists.
The annual tax rate for rented properties for tourists in Croatia
Owners who rent properties for touristic purposes must pay an annual flat tax rate determined by the tax administration in Croatia. This kind of tax is normally calculated based on a series of factors:
- the maximum capacity and the number of rooms;
- the type of the property (villa, apartment, condo, etc.);
- the area in which the properties are rented;
- if the property owner is liable to VAT or not.
All these details can be entirely explained by one of our attorneys in Croatia, with experience in the real estate sector.
The real estate market in Croatia
The strong demand for properties in Croatia in recent years is highlighted by the increased prices for the past period, according to specialists and reports in the real estate sector. For instance, according to croatiaweek.com, cited by propgoluxury.com, an important website that analyzes the real estate markets around the world, Zagreb, the Croatian capital is the most prolific cities in the country that attracts many real estate investors. The residential constructions continue to develop, and EUR 2,000 is the approximate price per square meter of an apartment. However, Istria and Split-Dalmatia raised the interest of entrepreneurs wanting to boom in the real estate sector of Croatia, as the high number of constructions speak. In terms of numbers, around 100,000 property sale and purchase transactions took place in 2018 in Croatia. Below you can find some other interesting facts, details, and numbers about the real estate market in Croatia:
- There are around 3% of foreigners who own properties in Zagreb;
- There are around 70,000 of foreigners who own properties on the Adriatic Coast;
- In Istria, about 33% of the properties are owned by foreigners, followed by 26% in Primorje-Gorski Kotar;
- About 55% of permits for real estate property acquisitions were granted to german citizens, in 2019.
Would you like to know more about the property tax in Croatia? Feel free to contact our team of lawyers in Croatia and find out all the legal aspects you are interested in. You can also ask for legal support for starting a business in Croatia.