Property sale in Croatia

Buying a property is one of the biggest financial expenses in life, so it is important to be properly informed about all details of purchase to avoid possible mistakes and to make the whole process as smooth as possible. Property sale in Croatia it is by no means a quick or easy job, especially when it takes place in the middle of an economic crisis, but the need for a home is one of the basic ones, so there are always interested buyers. In most cases, the price, along with the location, is the basic criterion when buying a property, so the formation of a real price is the first step in the process of putting the property up for sale. Almost every owner hopes to get as much money as possible when selling their property, however, it should be borne in mind that an unrealistic price will repel buyers and cause an extended sales time.

What do you need to check before buying a property in Croatia?

When you decide to buy an apartment or house, be sure to first ask the owner for proof of ownership, and then check provided information with the competent municipal court where the property is located. So, determine if the ownership in the land book is determined in the way the seller presents it to you.

Today, it is very easy to check on the land registry website, but you need to have information in which Municipal Court and land registry department the real estate in question is registered, then in which general ledger the real estate in question is entered (for example Čakovec), and finally you need to know the number of the cadastral parcel or the land registry entry number for the real estate in question. Also, you have the opportunity to see the historical overview of the plot in question and determine who were the previous owners, whether the property was encumbered by a lien, etc. One of the most demanding steps in buying a property is choosing it. It is very difficult to choose one property from a wide range in which you will spend the rest of your life. So don’t rush and take your time.

Property sale in Croatia – offer and acceptance of the offer

Real estate may be advertised at one price, but in reality, the selling price is always slightly lower. When bidding for a property, try to lower the price realistically. Most owners are willing to lower the price and already have a clearly defined lower limit of the selling price in advance. In the event that some damage is seen on the property that needs to be repaired, then explain with the offer why it is such, and what would be your costs for the repairment of those damages. Once the property seller has accepted your offer, and you have found the right property price for both parties, it is time to prepare a pre-contract and contract.

Property sale in Croatia –  pre-contract and contract

Property sale in Croatia is finalized when all the conditions are agreed and confirmed, the pre-contract is signed, and the buyer pays the appropriate amount of the down payment to the seller, usually the amount up to a maximum of 10% of the purchase price. Then the buyer submits the pre-contract to the bank and after the loan is approved, the main contract on the sale of real estate is signed, and based on it and the loan agreement, the mortgage is entered in the land register. After that, the bank pays the loan to the seller, and you become the owner of the property.

If you have cash and don’t need credit, the process is much faster and easier. Most often, the main contract on the sale of real estate is signed immediately, which is notarized and the same refers to the entry in the land register. The relative novelty is that immediately upon notarization, you can forward the request for registration of ownership rights in the land register on the basis of a scanned contract of sale and the identity document of the buyer.

Property sale in Croatia  – Ownership

After you have purchased the property, according to the purchase contract, your right of ownership is entered. The request is submitted in the municipal court of the place where the real estate is located, in the land registry department, the so-called Land registers or directly via digital route from the notary public office. The real estate transfer tax in Croatia is currently 3%. It is not necessary to submit any reports to the tax administration according to tax legislation, they will send you a tax decision by mail to the address on the basis of a certified sales contract (which is forwarded to them by the notary public ex officio) on the basis of which you will settle your tax liability. When buying a property, be sure to compile a handover report and record the status of all meters, and transfer the utilities to yourself.

Property sales tax

Sales tax must be paid within 15 days from the date of delivery of the decision on the determination of real estate sales tax. After concluding the sales contract, as a rule within 60 to 90 days, you receive a decision on determining the real estate transfer tax, which you must pay within 15 days from the date of issuance of the decision. If you do not pay the tax within the given deadline, interest will be charged.

Foreign buyer

Since 2009, EU citizens are free to buy real estate in Croatia, unless it is agricultural land. If you are not a citizen of the Union, the rules vary depending on the country you belong to. Citizens of countries that have signed a reciprocity agreement with Croatia can buy real estate in Croatia as long as they have the consent of the Ministry of Justice, which takes 2 to 6 months. Citizens of countries that have not signed a reciprocity agreement with Croatia cannot buy real estate as a physical person, but can establish a company in Croatia and make a purchase through it. EU citizens cannot own agricultural land in Croatia.

Energy certificate

It is important that the property sale in Croatia is conducted in such a way that a property has an energy certificate because it presents the energy properties of the building, i.e. general information about the building, energy class of the building, certificate validity period, data on the person who issued and produced the energy certificate, data on persons who participated energy certificate, energy certificate label, data on thermotechnical systems, energy needs of the building, data on the use of renewable energy sources, proposed measures, more detailed information and explanation of the content of the energy certificate.

Residential buildings are classified into eight energy classes according to the energy scale from A + to G, with A + denoting the most energy-efficient and G the most energy-unfavorable class. Before concluding a sales contract, be sure to ask the seller to hand you a valid energy certificate, making sure that it is not older than 10 years.

If you need a lawyer for buying property  in Croatia, contact us with confidence.