The initiative, supported by former Tourism Minister Nikolina Brnjac, aims to close the gaps through which rental income has eluded Croatian tax authorities. Amid the tourism boom of recent years, apartments and villas on the coast have become a popular investment asset, and short-term rentals are an important source of income for many owners.
However, the government also sees the downside: the massive use of tourist rental housing reduces the available options for local families, especially in coastal cities, where rates are rising and the shortage of long-term rentals is increasing.
The new approach involves increased tax control and digitalization of records, which will make it more difficult to conceal rental income. The authorities are improving interagency cooperation to make the system more transparent and increase tax collection.
The government's message is very clear: income from Croatian real estate should be taxed according to Croatian rules, wherever the landlord is located. Loopholes that used to work are rapidly closing, and penalties are getting tougher.
Source: Total Croatia
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