What taxes does a property buyer pay in Croatia?
Secondary market
The standard transfer tax rate (Porez na promet nekretninama) is 3%.
The tax base for calculating this tax is the largest of the two amounts:
- The price of the apartment or house specified in the purchase agreement.
- The estimated value of real estate, determined by the state (the so-called porezna vrijednost or procijenjena vrijednost).
An important caveat: in Croatia, in order to avoid underestimating the price in the contract, the tax authorities use the estimated value. The tax base is almost always equal to this estimated value, which is often higher than the market value, especially for old properties. In fact, you pay 3% of the cadastral (estimated) value.
Primary market
If a buyer purchases real estate in a new building from a legal entity (developer) that pays VAT (PDV), VAT is usually included in the price, and the buyer is exempt from 3% tax.
In addition to taxes, the buyer also incurs other expenses, as we discussed in detail in the article "How to buy an apartment or villa in Croatia?". Usually, the total additional costs of the buyer (3% tax + notary and lawyer services + fees) amount to approximately 7% of the cost of the property.
The tax on the transfer of ownership is uniform throughout Croatia. It is paid for the purchase of any type of housing: an apartment, a house, a land plot.
An important caveat. Sometimes real estate is registered to a company. In this case, it makes sense to acquire 100% of the company's shares, especially if further commercial use of the facility is planned. This allows the buyer to save 3% tax, and the seller to avoid paying income tax after the sale of real estate and not waste time and money on closing the company.
What are the taxes on property ownership in Croatia?
Annual municipal tax
Annual taxes in Croatia vary depending on the municipality – from 0.6 euros to 8 euros per square meter of usable area.
There are exceptions. No tax is paid if:
- The owners live in their real estate themselves;
The housing is rented out for a long term (at least 10 months per year) or used for agricultural/industrial/non-residential purposes. So we can say that this is a tax on empty or second homes.
The tax was introduced everywhere in early 2025, but the Croats did not particularly feel it.
What taxes does a real estate seller pay in Croatia?
1. Capital gains tax – 12% of the difference between the purchase and sale amount.
The tax arises upon sale 2-5 years after the purchase, depending on the basis.
2. Tax on rental income
Income earned from renting out real estate is subject to personal income tax (Porez na dohodak). Its size depends on the form of ownership, nationality / tax resident of the payer – a lot of features are taken into account. Non-residents pay 10% of income and 13% VAT.
What changes in Croatian legislation should be kept in mind? Penalties for illegal construction are being increased. It becomes a criminal offense.
Thank you for your help in preparing the material:
Elena Stolz, real estate expert consultant
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1) VAT
Since 2001, this law has been amended nn-th number of times and the last edition of 2010!
as shown in the comment list of changes, published in Narodne novine - until 2000!
Since 2009, the government of Jadranka Kosor was decided to increase VAT from 22 to 23%
cm. link
[ Link ]
Section 7, Art. 10
quote: Porez na dodanu vrijednost placa se po stopi od 23: (. od o1 kolovoza 2009.g.)
(The VAT rate is 23% c 1 August 2009)
and
[ Link ]
a change in the law came into force on August 1, 2009 !!!
so that the author of the comment lagged by 2 years.
2) Next, about the return of VAT - yes, it is possible under certain conditions - to ensure that there was a VAT refund:
a) it must be a primary market
b) The contractor shall be legal entities as part of the VAT
c) The firm Russian who buys should also be recorded as part of the VAT and show activity!
The authorized capital is actually 20,000 kuna (approximately 2,800 euros), but in the article there is no mention of authorized capital! Here is a quote from the article:
"The owner of the company has to pay the tax" on the company name "(up to 2,000 Croatian kuna (approximately 270 euros) per year)"
Tax "on the name of the company", and not the authorized capital.
Tatiana, please, do not write comments if you do not know;)