Buying Property in Croatia: Taxes, Costs, ROI, Maintenance, Residence Permit and Citizenship

Croatia is one of the most attractive countries in Europe for buying real estate due to its mild climate, picturesque Adriatic and growing tourist potential.

We tell you about the key aspects: taxes, expenses, return on investment (ROI), property maintenance, as well as the possibilities of obtaining a residence permit and citizenship.

EU citizens can freely purchase real estate in Croatia under the same conditions as local residents. For citizens of third countries (e.g. Russia, Ukraine, Kazakhstan, etc.), the purchase is possible, but with restrictions: most often, permission from the Croatian Ministry of Justice is required. It is also possible to open a Croatian company (d.o.o.) and register the real estate in its name.

Taxes on purchase

• Property acquisition tax — 3% of the cadastral value if the property is purchased on the secondary market.
• VAT (PDV) — 25% if the property is purchased from a developer on the primary market (tax included in the price).
• Notary fee — usually from 0.5% to 1% of the transaction amount.
• Registration in the land register — about 100 euros.
• Legal services — from 1,000 to 3,000 euros depending on the complexity of the transaction.

Annual maintenance costs

• Utilities (water, electricity, internet) — from 100 to 300 euros/month, depending on the region and season.
• Property tax — low in Croatia, often 0.1–0.2% of the value per year (or fixed amounts in municipalities).
• Service (if the apartment is in a complex) — can reach 1–2 euros/m² per month.
• Insurance — about 100–300 euros/year.
• If you rent out — rental income tax 10% + 13% local fee, paid quarterly.

ROI: Rental Income

Croatia is one of the tourist hits of Europe, especially in summer. Cities and islands such as Split, Dubrovnik, Zadar, Hvar bring ROI from 4 to 8% per annum for short-term rentals.

The best income is brought by properties near the sea with a rental license.

Buying real estate itself does not automatically grant a residence permit, but you can apply for:

• Residence permit for real estate ownership — as a basis for temporary stay (up to 6 months a year).
• Business residence permit — if you register a company and register housing in its name.
• Residence permit for financial independence — upon proof of regular income and rent/ownership of housing.

Citizenship is possible through:

• Permanent residence permit - after 5 years of temporary residence (or 3 years for spouses of Croatian citizens).
• Naturalization - after 8 years of residence, with knowledge of the language and integration.
• Investment - there is no official "citizenship by investment" program, but business and tax contribution can speed up the procedure.

Buying real estate in Croatia is not only a path to a European lifestyle by the sea, but also an investment with the potential for good returns. With the right approach, you can combine a vacation, rental income, and the possibility of moving. The main thing is to carefully check the legal purity of the property and choose the right ownership strategy.

Mercury Group specialists take on the entire process of purchasing real estate in Croatia, from selecting the property to preparing a package of necessary documents on a turnkey basis, and also assist our investors by providing a full range of concierge services.