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The process of buying a resale property in Croatia

Russian buyers purchase real estate in Croatia in two ways – having accommodations for physical or legal face. The difference lies in the timing of property rights and the size of the required costs.
28.08.2012
Author: Maria Cooper
209
Buying property in Croatia for an individual is based on the principle of reciprocity. Russians can purchase real estate (but not plots of land without buildings) in the country for an individual, but since an agreement on reciprocity has not yet been signed between Croatia and Russia, for this it is necessary to apply for permission from the Croatian Ministry of Justice. The period for obtaining a permit can take from six months to three years. Therefore, Russian citizens most often buy housing in the country for a company registered in Croatia - it is faster and easier, and permission for ownership is given immediately. In addition, undeveloped land plots can be registered for the company. Ownership is registered after obtaining permission from the ministry. When purchasing a house in Croatia as an individual, while waiting for permission in the name of the buyer, a "seal" is registered in the register - this is a kind of encumbrance in which the seller can dispose of the property only with the consent of the buyer. The encumbrance is removed after obtaining permission. In case of refusal to obtain permission from the ministry, housing can be re-registered with the company. Buying a company registered in Croatia is a streamlined and uncomplicated process that takes from one week to a month. Here you need to keep in mind that by registering a company, its activities will need to be supported, which will require certain financial costs. Since February 2009, citizens of the European Union can buy real estate in the country on an equal footing with Croats, that is, without obtaining permission from the Ministry of Justice. Perhaps Russian citizens will also someday receive such a right. Purchase process Having decided on the object of purchase, a preliminary agreement is concluded between the seller and the buyer, which can, but not necessarily, be certified by a notary. Together with this, a deposit is made, which is usually 10% of the purchase price, its amount is also set by agreement between the buyer and the seller. All payments are made in Croatian Kuna. The amount is credited to the seller's account. In case of termination of the preliminary contract through the fault of the buyer, the deposited deposit remains with the seller. If the seller changes his mind, he returns the deposit in double size. Before that, a lawyer or real estate agency checks the selected property. In the case of a transaction for a legal entity, you can start registering a company, which will take about three working days. The statutory documents are signed with the personal presence of the owner, then the initial capital is contributed, within two days the new company is registered in the commercial court, then it is necessary to open bank accounts and make seals. Of the documents, individuals need a passport, legal entities need an extract from the register or a certified copy of the registration certificate. About a month after the conclusion of the preliminary contract, the main contract is drawn up. Full settlement is made after signing the main contract for the sale of real estate on the same day. The buyer receives from the seller a document that contains a waiver of the property rights of the previous owner and gives the right to register the property to the buyer, the so-called tabular statement. After obtaining permission from the Croatian Ministry of Justice, the property is registered by entering the data on the new owner in the land registry. If the purchase is made to an individual, then the lawyer draws up and sends a permit for the purchase of real estate to the Croatian Ministry of Justice after the main contract is signed and certified by a public notary. Registration of the sales contract with the tax authorities takes place no later than 30 days after the signing of the main contract. Then, within the specified period, you must pay a tax of 5% of the value of the property, in case of delay, penalties will be charged. Costs As a rule, real estate transactions in Croatia are carried out with the participation of a real estate agency. Agency commission is about 2-6% and is divided between buyer and seller. The buyer pays a one-time transfer tax on the purchase of a secondary property in the amount of 5% of the value of the property. Legal services cost about 1-1.5% of the transaction value, this includes checking the property, registering the new owner in the land registry and preparing a sale and purchase agreement. In the case of a transaction with the participation of a real estate agency, a company representative is engaged in checking all documents, as well as drawing up a sale and purchase agreement and subsequent registration of ownership of the purchased housing. These services are included in the agency's commission. Notary fees and translation services are around HRK 500 (ˆ 70). The cost of setting up a company is on average 1000 euros excluding the share capital. The authorized capital is 20,000 kuna (approx. 2,800 euros). The company's accounting services will cost from 100 euros plus VAT (25%) per month. Foreigners can sell real estate in Croatia without any restrictions. When selling a home in case of registration for an individual, capital gains tax will not be charged if the property has been owned for more than three years. If the owner has owned the property for less than three years, then the tax will be 35% of the difference between the purchase price and the sale price. Having made a deal for the company, the profit tax on the sale will be 20%. HomesOverseas.ru
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