How can foreigners buy real estate in the Republic of Croatia?
When acquiring real estate in the Republic of Croatia, things differ depending on whether the acquirer is a Croatian citizen or a foreign citizen. Citizens of the Republic of Croatia have no restrictions in the legal transaction of real estate (the exception is real estate that represents the common good and as such is not in circulation). The way or the possibility of acquiring real estate in the Republic of Croatia by foreign natural and legal persons depends on whether or not they are natural or legal persons from member states of the European Union.
Foreigners, namely citizens and legal entities from the member states of the European Union, acquire the right to own real estate under the same conditions as Croatian citizens.
Foreign nationals are persons who do not have Croatian citizenship, with the distinction being made between persons from the member states of the European Union and other foreign persons. From February 1, 2009, foreigners, namely citizens and legal entities from the member states of the European Union, acquire the right to own real estate under the same conditions as Croatian citizens, only with the fulfillment of the general conditions for the validity of the legal transaction. Given that there are no longer any special ones for these people
prerequisites for the acquisition of real estate ownership (reciprocity and consent of the Minister of Justice) at the moment of concluding a legal transaction, the tax liability for the real estate transaction tax arises, and at that moment the real estate transaction tax is determined.
In what case can a foreigner not acquire property?
What all foreigners have in common, regardless of whether they are from the European Union or not, is that they cannot acquire property:
- real estate in excluded areas for the protection and interests of the Republic of Croatia
- agricultural land
- protected parts of nature
- forests and forest land
This is determined by the Law on Agricultural Land and Protected Areas of Nature from the Law on Nature Protection. According to the provisions of the mentioned Law, citizens and legal entities from the member states of the European Union cannot be holders of ownership rights on agricultural land, in a strict reserve, national park, special reserve, nature park, regional park, natural monument, significant landscape, park-forest and monument of park architecture. Legal transactions that have as their object the acquisition of agricultural land and/or protected parts of nature from citizens and legal entities of the member states of the European Union are void. The Tax Administration takes care of these legal affairs ex officio, and on the basis of these legal affairs, real estate sales tax is not determined.
For all other foreign persons, the general (valid legal business) and special conditions (reciprocity and given consent) for acquiring real estate ownership rights in the territory of the Republic of Croatia apply. On the following
link are able to check reciprocity information for a specific country.
This means that for other foreign persons (non-citizens and legal entities from member states of the European Union) the need to obtain the consent of the Minister of Justice for the acquisition of real estate remains. Therefore, the tax liability of the real estate transaction tax for other foreign persons arises at the moment of obtaining the consent, and the real estate transaction tax is determined at the moment of obtaining the consent.
Regardless of the differences that are prerequisites for the acquisition of real estate by foreign persons, when it comes to the determination of real estate sales tax, foreign natural or legal persons are equal in terms of paying real estate sales tax, unless otherwise stipulated by an international agreement.
If there is no reciprocity between the Republic of Croatia and the country from which the acquirer of real estate comes, then the real estate can be purchased so that the acquirer establishes a trading company with headquarters in the Republic of Croatia, which could then be the buyer of the real estate. That new company is a Croatian company and in that case it would be the owner of the property, while a foreign citizen would be the owner of a share in the company. The most common form of company in the Republic of Croatia is a limited liability company, which can be founded and be a member by only one person.
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