Buying property in Croatia for foreigners
Croatia is a beautiful country that has become very attractive for property buyers from all over the world and buying real estate in Croatia can be a great investment. No matter if you are buying property for a vacation home, for an investment or you are an expat, the process can be quite complex and therefore hiring a lawyer with expertise in property law is a must. In this article you will find some of the must-knows for buying property in Croatia.
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Find a trustworthy partner in Croatia
Property Law Lawyer
Hiring a lawyer while buying property in Croatia is one of the smartest and most important things you can do to ensure the process runs smoothly and everything is done according to the law. However, it is often the most overlooked things while buying real estate in Croatia. That is unfortunate since the process can often times be extremely complicated and having legal representation who is specialised in property law is essential, from the very start up to the contract signing and registering in Land Registry.
Real estate agency
Hiring a real estate agent for buying property in Croatia is not mandatory. However, if you don’t speak the language, it can be useful to hire a trustworthy agent. Be sure to research the agent and check his licence validity and references before committing to anything in order to avoid scams.
Please note that even though real estate agents are familiar with searching for property, they are not legal experts and might overlook some essential parts of the process. Therefore, hiring an agent does not mean you don’t need a lawyer!
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Who can buy property in Croatia?
EU citizens
If you are an EU Citizen, you can purchase a property in Croatia the same way as a Croatian citizen.
Non-EU citizen
If you are a citizen of a country that is not in the European Union you can buy real estate under the Principle of Reciprocity. What that means is that Croatia has a Reciprocity Agreement with other countries that regulate property purchases for its citizens. Therefore, you should check if the country you are registered as a citizen has a Reciprocity Agreement with Croatia, and if it does, you can buy property in Croatia.
As a foreign citizen, it is also important to note that you won’t be able to finalize the purchase without a consent from the Ministry of Justice in the Republic of Croatia, which might take up to a few months. It is done by submitting the required documentation to the Ministry.
What is an OIB?
OIB is a personal identification number that every Croatian citizen and foreign citizen who has financial dealings in Croatia must have. Therefore, you will need and OIB when buying a property in Croatia since it is an essential part of any contract and is also needed to pay tax.
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In a hurry?
If you don’t want to wait a couple of months for the consent from the Ministry of Justice, you can establish a company in Croatia and buy it through that company. Croatian companies have equal rights no matter the citizenship of the founder and owner. The company in Croatia can be founded by any person, no matter their citizenship.
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Buying agricultural land and forests
Only Croatian citizens can buy agricultural land and forests in Croatia. A rule that will last until 2023. However, it is possible for non-Croatian citizens to purchase land for agriculture if purchased through a Croatian company that they own. However, it is still not as simple as it sounds and definitely requires a lawyer to guide the process.
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Land Registry
Unfortunately, the state of the property and ownership registry in Croatia is often times outdated and very complicated to understand, with the base of the Land Registry originating from the Austro-Hungarian empire. Therefore, before committing to buying anything, it is absolutely essential to check the legal status of the property, which can very often be quite complicated. Even though some services and registries have gone online in the past few year, most often there is still a need to visit quite a few institutions in order to check all the documentation and a hiring a lawyer can make the process quicker and more secure.
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Property buying process in Croatia
- Pre-contract agreement: The first step is the pre-agreement contract between a buyer and a seller. Be sure to have your lawyer check the legal ownership and status of the property before making a pre-contract agreement. Once the pre-contract is ready, the buyer has to pay a certain sum to the seller, usually 10% of the selling price.
- If you are a non-EU citizen, you will need consent form the Ministry of Justice.
- Signing the contract.
- The copy of the binding contract signed by a notary is submitted for Land Registry. Next, the details of the contract must be registered in the Municipal Cadastral Department’s Land Books and payment of purchase tax must be made.
- In 2021, the Real estate transfer tax rate is 3% of the final purchase price. The tax payment is not required for new built properties bought first time directly from investor.
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Property lawyer in Croatia
Legal protection of our clients and the safety of their investments is our main priority. Zorić Law Office offers complete legal service, from documentation check to registration of ownership.
Legal services we provide for clients buying real estate in Croatia:
- Documentation checks (property status and ownership, Usage permission, Zoning certificates etc.),
- Pre-contract agreement,
- Sales contract,
- Proposal for registration of title,
- Registering the property in Land registry,
- Help in the preparation of documents for tax administration.
About Zoric Law Office
Zoric Law Office continues a long and successful tradition of providing legal services that has been in the Zoric family for generations. Our main goal is to provide a complete, high-quality and efficient legal support tailored to specific needs of each individual client. Therefore, in order to provide a seamless professional service, we collaborate with renowned experts from various fields.