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With all properties; new builds, apartments
and villas our solicitors will provide documentation
showing current ownership, debts if any and land
registry details. The buying process in Croatia
is relatively straightforward, although all foreign
purchasers must obtain permission to buy from
the Ministry of Foreign Affairs, which can take
between six months and a year. Similar to buying
abroad anywhere, appointing a lawyer is essential
practice. On buying a property it is usual to
sign a purchasing contract and later for your
lawyer to apply to the Ministry of Foreign Affairs
for approval.
In keeping with many European nations, a property
purchase tax is levied. In Croatia, the sum is
5% of the purchase price. Buyers should expect
to pay approximately 1% of the purchase price
in legal fees. Allow £20 a month for fixed
utility costs – water, electricity, gas etc.
Once a property has been found to your liking
the sales process can begin. The contracts will
be drawn up, deposit put down on the property
and payment details discussed. This can be done
one of two ways:-
1. Buying as an individual.
2. Buying through a company.
As an individual you will have to apply for permission
to buy from the Ministry of Foreign Affairs, which
can take between 12 and 18 months and be subject
to 22% tax. The second option, buying through
a company, is faster and cheaper. You do not need
permission from the Ministry of Foreign Affairs
and the tax is only 5%. Whichever option you choose
we will be there to guide you every step of the
way.
Capital Gains
On the sale of a property within three years ofpurchase,
Capital Gains Tax (CGT) at a rate of 35% is levied
on the profit between the purchase and sale price.
After three or more years of ownership, no CGT
is payable.
Rental Tax
Tax at a rate of 25% is payable on the declared
profit of any rental income received. It is the
owner’s responsibility to notify the tax
authorities.
Investment
Your property will be a very good investment for
the future. If you decide to rent it out during
the holiday season or use it as a holiday home
you will see a substantial return on your property
value in years to come. Coastal apartments have
seen a steady increase of up to 25% per year,
whilst the market for inland properties is constantly
growing. There are many off-plan projects available
at the moment, which enables you to buy with a
substantial discount.
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