A step-by-step guide to buying real estate in Croatia
- Property records search
Before making an offer, check the property records, which include the following:
- The size of the property in square meters
- The purpose of the property
- The owner's name(s)
- The owner's OIB(s), in some cases
- The owner's registered address(s)
- Any burdens or rights to the real estate
- Check zoning information
Check whether the property is zoned for residential or agricultural use by filing a request with the Administrative Department for Construction and Spatial Planning (Upravni model za graditeljstvo i prostorno uređenje). If the property is residential, and you are not a Croatian citizen, you must request a certificate stating this. The cost is around 5 euros.
- Prepare the sales contract
The purchaser's lawyer usually prepares the sales contract and outlines the deposit and purchase terms. The deposit, typically 10%, called "kapara," is paid by the buyer. Notarized copies of the contract are required for the seller and the buyer. A notary public notarizes agreements.
- Request permission to buy from the Ministry of justice
Foreigners must obtain permission from the Ministry of Justice to purchase real estate in Croatia. EU/EEA citizens can skip this step. As part of the process, the Ministry of Justice checks existing reciprocity agreements with your country of nationality. You must file a request with the Ministry of Justice that includes the following:
- Original certification from Administrative Department for Construction and Spatial Planning (Upravni odjel za graditeljstvo i prostorno uređenje)
- Notarized copy of the purchase contract
- Certificate from the land registry confirming that the seller is also the owner
- Proof of the buyer's citizenship, such as a passport, notarized
- Notarized copy of the driver's license for US and Canadian citizens to show proof of your last address
- Copy of your residence ID in Croatia, if applicable
- The original power of attorney for a representative within Croatia who can receive mail on your behalf if you do not have a registered address within Croatia
- Register the property:
After obtaining permission from the Ministry of Justice, register the property by filing a request with the land registry. The request should include the following:
- A copy of the notarized sales contract or deed of transfer and any other relevant documents that establish ownership of the property
- A tax clearance certificate
- A registration fee, which varies depending on the value of the property
Once the documents are reviewed, the land registry will register the property in your name. You will receive a certificate of ownership or title deed.
- Paying taxes and fees when buying property in Croatia
Once the Ministry of Justice approves the purchase, it's time to take care of the final steps, including paying the necessary taxes and fees. Planning and budgeting are crucial because these taxes and fees can amount to approximately 6-7% of the purchase price.
When buying property in Croatia, you can expect to pay the following taxes and fees:
- Real estate transfer tax: This tax is calculated as 3% of the purchase price or the property's assessed value (whichever is higher) and is paid by the buyer.
- Notary fees: The fees for notarizing the purchase contract depend on the value of the purchased property and range from 70 to 270 euros.
- Administrative fees: These fees cover the costs of registering the transfer of ownership with the land registry and can range from 200 to 400 euros.
- Agent's commission: If you used a real estate agent to help you find the property, you'd also need to pay their commission, typically around 3% of the purchase price.
- Registering the transfer of ownership
After paying the taxes and fees, the final step in the purchase process is registering the transfer of ownership with the land registry. The notary public, who notarized the purchase contract, typically handles this step. Once the transfer of ownership is registered, you'll receive a certificate of ownership (vlasnički list) proving that you're the legal owner of the property.
Tips for buying property in Croatia
To make the process of buying property in Croatia smoother, consider the following tips:
- Hire a reputable real estate lawyer to protect your interests and ensure a smooth purchase process.
- Check for any debts or liens on the property before finalizing the purchase to avoid potential future liabilities.
- Beware properties with incomplete paperwork, which can lead to legal issues later. Ensure all the paperwork is in order before proceeding with the purchase.
- Consider using a real estate agent to streamline the process and find the right property for your needs.
- Be patient because buying property in Croatia can be time-consuming and involves much paperwork. Allow plenty of time to complete the purchase process.
In conclusion, buying property in Croatia can be an excellent investment for foreigners looking to extend their stay there. However, the process can be complicated, and it's essential to engage a reputable real estate lawyer and follow the steps carefully to avoid fraud and misrepresentation.
Alpha Luxe Group has a dedicated legal department to ensure that every aspect of your real estate transaction is handled with the utmost care and attention to detail.
Following the steps outlined in this guide and taking the necessary precautions, you can successfully purchase a property in Croatia and enjoy all these beautiful country offers.
Alpha Luxe Group is here to help guide you through the process, from understanding the market to closing the deal.
So why wait? Start your journey to becoming a property owner today!
Contact Alpha Luxe Group and let our expert team help you find your dream property in Istria, whether a cozy apartment or a luxurious villa.
With our help, you can make the buying process a smooth and enjoyable experience.