1. CAN FOREIGNERS BUY REAL ESTATE IN CROATIA?
Yes, the foreigners can buy and sell real estates in Croatia. Since February 2009. foreign citizens, nationals of countries that are members of EU can acquire property in Croatia very simply, same as Croatians. Before this new law they needed an approval of the Ministry of Justice and Ministry of Foreign Affairs. However this approval is still valid for non EU citizens, and those of the states who have a reciprocity contract signed with Croatia, and in exceptional cases also citizens of other states. The proceeding is: When the foreigner decided for real estate property purchase, he signs a Sales Contract with the vendor, without the notary certification in the very moment. The Contract is sent with accompanying documentation of the Ministry of Foreign Affairs in Zagreb. After the approval, the foreigner can actually overwrite the real estate on his name and is obligated to pay taxes to real estate. Foreigners, who have a company in Croatia, can purchase the real estate properties on the company name.
2. HOW TO SET UP A COMPANY?
Besides the purchase of property in Croatia as a natural person, foreign citizens can also incorporate a company in Croatia and acquire properties on behalf of such company. In such a case the procedure of obtaining consent from the Ministry of justice is not applicable, which means that a foreign citizen owner of a company in Croatia is given identical rights as any other Croatian legal person. Since the incorporation of a company shortens the procedure of acquiring ownership title, a part of foreign citizens decides to incorporate a company under Croatian law, so that Nekretnine 24 d.o.o. offers to all its foreign clients the services of incorporation of such a company in Croatia. We offer this service to all foreign citizens, disregarding the fact if they will find a property through us or another agency or if they want to register a company in Croatia for other business purposes. The incorporation of a company takes 2-4 weeks. If you are physically present in Croatia, we will guide and assist you through every step. If you are not present in Croatia, this is not a problem, because we will submit you necessary powers of attorney, to be signed and verified in your country, based on which we can perform all activities on your behalf. The costs of incorporation of a company are in total approx. 3.800 EUR, containing : tax, notary fees, administrative fees and the company ordinary capital which is currently 20.000,00 HRK, as well as other costs towards the bank. In case you want to incorporate a company in Croatia, we offer fast and efficient services and will do this for you. Previously you must: 1. Choose the name of the Company - when choosing the name, keep in mind that it must be a Croatian, Latin or Greek name; - the company can also carry your own name (name, middle name, family name); - the name must be exclusive in this region and approved by the notary public – therefore we propose to have at least three optional names. 2. Have a copy of your passport verified. 3. Have the powers of attorney verified before a notary public and the Apostle stamp. (If you don't have attorney we will recommend you to our best partners.)
3. WHAT IS THE SALES TAX ON REAL ESTATE IN CROATIA?
The Republic of Croatia has a unified tax rate of 5% for all types of real estate and all types of transactions. The tax is determined based on prices from the sales contract and the assessment of the competent tax authority in whose territory the property is located.
4. WHAT IS THE TAX FOR EXCHANGE OF REAL ESTATE?
Also 5%, so that each real estate owners pays 5% of their property.
5. IN WHICH THE DEADLINE MUST PAY TAXES ON PROPERTY?
After concluding the sales contract, the buyer is obliged to inform tax administration within 30 days, taking into account the date of the contract. Notaries also one copy of the sales contract deliver to the tax authorities. The buyer is required within 15 days from issuing the decision of the tax administration to pay taxes, and if he did not pay he will be charged for each day exceeding the time limit.
6. DOES THE SELLER PAYS TAXES WHEN SELLING REAL ESTATE?
No. Pay only if they purchased the property is sold prior to the expiration of three years from the date of purchase and at a higher price than originally purchased. Then shall the difference between the buying and selling real estate prices to pay taxes amounting to 35%, plus local taxes, different in some places Croatian.
7. AS THE TAXABLE RENTAL PROPERTY?
Depending upon whether it is renting a room or flat and if the owner is a company or person. When a person rents out a property tax base is calculated so that the amount of rent allowance disapprove (30%). If so received smaller base than 2,400 kn per month, is taxed at the rate of income tax of 20% plus local taxes, if it is higher, at a rate of 35% plus local taxes. In cases where the company rents the property to an individual or paid (22%), and instead of income tax is paid at year-end income tax in the amount of 20% of total gross profit. When renting a room and utility taxes apply in the same way, only a small tax base since the allowance increases from 30% at 50%.
8. WHAT IS THE „KAPARA" OR DOWN PAYMENT WHEN CLOSING PRE-SALE AGREEMENT OR CONTRACT?
Usually 10% of the purchase price or as agreed between the seller and buyer.
9. IS IT POSSIBLE TO CONTRACT ON THE SALE OF PROPERTY ABROAD?
Yes, it is the best and assemble at the embassy or the Croatian embassy. If it is signed and stamped by a notary public, it is necessary to translate into Croatian by a certified court interpreter.
10. HOW TO AVOID POTENTIAL PROBLEMS WHEN BUYING PROPERTY?
Before the conclusion of the Contract on the estate, it is wise to examine the property and legal status of property concerned, and examining the ABC list of an extract from the land registry, authorized the Municipal Civil Court in the name of the vendor, as proof of ownership of the subject property.
11. HOW MUCH COST AGENCY FEE?
Contracting Party which buy real estate from the real estate agency the same pay agency fee in the amount of 3.69% of the agreed purchase price (fee includes VAT). Agency "Property 24 d.o.o.” offers complete services related to starting a business, choosing the accountants, as well as assistance in opening accounts in banks needed to transfer money, and get started the company. Transfer of Ownership That is an application for registration of new owner, it is submitted by owner and costs 35 €. Notarial Services Depending on the size of the contract, approx. 10-20 € verification of signatures on the contract. Price of Real Estate Contract Included in the agency’s commission, composed a lawyer of real estate agency. Costs of agent The cost of live presentation of real estate is 35 EUR, and 10 EUR each next real estate. Capital transfer tax There are no taxes of mergers and acquisitions of equity of company. Installation improvements Water pipes, sewage, gas, electricity, air conditioning, solar photo voltaic cells, etc. …- in consultation with the responsible engineer of the agency.
FORECAST OF THE FUTURE
The growth of property values on the occasion of Croatian accession to the EU.
CONTACT US FOR MORE INFORMATION
Telephone: 00385 (0) 95 700 7001