Tax System in Croatia

Acquisition of real estate that are not subject to VAT are subject to real estate transfer tax at the rate of 5 %, payable on the market value of the property.

For example: Were real estate seller is not a registered VAT payer, and value of property is 100.000 € x 5 % = Tax amount is 5.000 €.

The acquisition of real estate assets built on or after 1 January 1998 by a registered VAT payer is subject to VAT at the rate of 23 %, although this usually applies to buildings only, since land is subject to real estate transfer tax.

For example: Were real estate was built after year 1998 and seller is a registered VAT payer; 23 % VAT is included in price and approximately on 25 % value of property are subject to real estate transfer tax. Value of property is 100.000 €, tax base 25.000 € x 5 % = approximately, Tax amount is 1.250 €.

What taxes (if any) are payable during the ownership of real estate?

No other taxes apply to the ownership of real estate.

What costs/charges (other than tax) are payable during ownership of real estate?

Communal charges such as fees, waste disposal charges etc are payable to the local authorities.

What taxes are payable on the sale of real estate?

No taxes apply the seller of real estate, if real estate ownership is held by a natural person.

What is a typical sales-purchase contract in Croatia like?

The content of the contract is negotiable. The essentials of a purchase agreement include: the identity of the real estate, the purchase price and a statement by the seller agreeing to the transfer of ownership.

What are the buyer's remedies against misrepresentation by the seller of real estate in Croatia?
In cases of misrepresentation by the seller a number of remedies are available. These depend on the kind of warranty and include:

- An annulment of the agreement
- A reduction in the purchase price
- A claim for damages