Since February 1st, 2009 EU nationals can buy property in Croatia under the same conditions as Croatian citizens (except agricultural land). The citizens of other countries outside the EU can acquire property in Croatia with the approval of the Ministry of Justice. Only the citizens of those countries with which Croatia concluded a reciprocity agreement may obtain approval. Buyers from areas without reciprocity may set up a Croatian ownership company to be able to acquire property in Croatia.
Buying property abroad is a delicate operation. In order to successfully purchase your property, it is important to take a closer look at the local market and its legal and regulatory specificities. Using a real estate professional such as MI-DOMA avoids many pitfalls. Indeed the profession of real estate agent is regulated and sanctioned by a diploma that ensures that your agent has all legal knowledge relating to the purchase of real estate. MI-DOMA and all of its partner agencies are certified Croatian real estate agencies.
Through this article we will provide some simple explanations of the procedures and the importance of each step in the process of acquiring property in Croatia in order to complete it satisfactorily. MI-DOMA provides its clients with help and assistance during the entire process of acquiring a property, from the property search to the completion of the transaction.
1. VERIFY YOUR FINANCIAL POSSIBILITIES
You need to carefully buget before considering a property. This involves calculating the funds at your disposal either on deposit or cash and if applicable, obtaining approval in principle from a lender. This gives you confidence that a lender will lend a certain amount of money when a property is found.
In Croatia, it is possible to get a mortgage loan to help you in the purchase of your property if you meet certain income requirements and creditworthiness. Thanks to our mortgage broker partner in Croatia, MI-DOMA can help you in this process and study your financial capacity in Croatia with regard to your project.
When buying real estate in Croatia, it is very important to understand and take into account the difference in exchange rates. Indeed, the prices of real estate in Croatia are always given in Euros, however the Croatian law requires that the payment of real estate transactions has to be made in Kuna (HRK). It is therefore important for the buyer to be aware that the exchange from Euros to Kuna is a "cost of purchase" and that it must be budgeted as such.
2. CHOOSE THE AREA
Depending on your preferences, you can choose the coast or the continental region. You should take into account the climatic conditions of the area and the ease of travel. You should also consider factors such as available services (hospitals, leisure, supermarkets), beach quality, if you support the heat, the time of year you are planning to go back to your country, and logically, the frequency and the price of the trip.
Among the tools that can help you in this is Googlemaps (travel time, commerces, admirable site ...) but you can also find information about the different regions on the website of the Croatian National Tourist Board.
If you are not sure in which Croatian region you want to settle, MI-DOMA can offer you a wide range of residences to rent for a longer stay in one or more Croatian regions in order to find the area that suits you the most. A first-hand experience in the region may help you with your decision. You can also benefit from our advice on Croatia and on the specificities of each region.
Some of our properties for sale are available for ‘rent before you buy’ option. This possibility allows you to ‘try’ the home you are interested in before making a decision to buy. You can read more about ‘rent before you buy’ possibility here.
3. CHOOSE THE DATE AND THE DURATION OF THE VISIT
In coordination with our local partners, we will set together a schedule for your visit of one or more properties in Croatia.
The ideal tour is 5-6 days. If the visit is well planned, a longer duration is unnecessary. The shorter visits are possible when you have a clear idea of what you want, especially if a previous trip was made to the selected area. It is preferable that visits are done the during working week as you will have the access to banks, lawyers and notaries in case that you decide to buy one of the properties visited.
4. THE INSPECTION TRIP
Depending on your arrival time, the visits will start on the same day or the next day. A well-planned trip will save you a lot of time, because the itinerary and the order the properties should be visited will be optimized, avoiding downtime and driving longer distances unnecessarily.
If a property pleases you to the point you want to buy it, we will help you with the next steps.
Once you have made your purchase decision and before signing a final contract, you will first need to obtain a tax number (the 'OIB' number) from the tax authorities. This number is mandatory for all real estate purchases in Croatia. To do so, you only have to fill the special form and go to the Croatian tax administration in the region where you decided to buy the property. The tax administration will provide you with your OIB number on the same day.
5. SIGNING THE PRELIMINARY CONTRACT AND / OR SALE CONTRACT
Once you have decided to proceed with the purchase of the property and have been approved, at least in principle, for the loan, you will have to pay certain amount as a booking deposit and sign the preliminary contact or, if you want right away the sale contract. The usual booking deposit is 10% of the value of the property.
The preliminary contract is the deed evidencing the agreement between the owner and the buyer on the property and the price, before the signature of the final sale contract.
The final sale contract regulates the rights and obligations of the buyer and the seller. Most contracts are standardized and have little room for modification, as Croatian law regulates comprehensively all aspects of the sale.
6. SIGNATURE OF THE DEED OF SALE AND DELIVERY OF KEYS
Purchase is always completed with the signature of the sale contract/deed of sale in front of the public notary. The deed is always signed in Croatian because it is an official document. Normally, the signing of the deed is associated with the payment of the price and the delivery of keys of the property. Notary fees in Croatia are around 100 €.
After the signature of the deed you must perform the registration of the title of ownership on your name at the Land Registry - a fundamental step that guarantees your property rights against third parties. This is done by your real estate agent or by the lawyer if you hired one to draft the sales contract.
7. PROPERTY PURCHASE TAX
After acquisition of the property you will have to pay the tax on patrimonial transmissions set at 4% of the property value. There is a period of one month to pay the tax from the signature of the deed.
However, if you buy a newly built property, instead of paying the tax on patrimonial transmissions, you will have to pay the VAT (Value Added Tax), currently at 25%, which is in most cases already included in the sale price.