Acquisition of real estate in the republic of Croatia
The procedure of acquiring real estate in the Republic of Croatia is fairly simple and safe. It is regulated by the Act on Ownership and Other Real Rights.
There are no restrictions for residents of the Republic of Croatia and citizens of the EU on acquiring ownership over real estate, while the principle of reciprocity is implemented for residents of non-EU countries. Real estate can be acquired by any person or legal entity.
All legal procedures regulating relations between buyers and sellers are notarized by a notary public.
Sale contracts are, as a rule, made for buildings whose construction has been completed, and the valid use permit has been issued. In such cases a sale contract is immediately made between the seller and the buyer. If the piece of real estate in question is still being built, the seller and buyer regulate their relations through a pre-contract on sale.
There are several steps in the purchase process, as follows: on entering a pre-contract the buyer pays an advance payment, partial payment in line with the phases of construction according to predefined dynamics. Upon completion of construction, the obtaining of a valid use permit and the drawing up of the condominium subdivision plan, the parties enter into a Sales contract. The contract defines the time period for the payment of the balance amount for the real estate. Upon the handover of the real estate, the buyer registers the piece of real estate in his name.
Pursuant to the Value Added Tax Act, the rate of VAT in the Republic of Croatia is 25%.
The purchased apartment can be re-designed into a tourist suite and one can take advantage of the pre-tax deduction up to the maximum of 25% , on the legal basis pertaining to commercial activity.