Taxes and Expenses When Buying Real Estate in Croatia

To purchase property in Croatia, foreign citizens must obtain permission from the Ministry of Justice. This is a mandatory requirement for all foreigners, except for citizens of the European Union.

Additionally, foreigners can rent out their property only through a legal entity registered in Croatia. Therefore, to generate rental income, a Croatian company must be established.

Property prices in Croatia vary depending on the region, type of property, and location.

In major cities and popular tourist destinations, such as Zagreb, Opatija, and the Adriatic coast, prices can be significantly higher.

• Three-bedroom apartment: 2.7 million euros
• Penthouse in Opatija (5 minutes from the sea): 1.5 million euros
• Apartments in Opatija (5 minutes from the sea): 200,000 euros

Average price per m²: around 2,436 euros.

Average price growth per m² per quarter: 2%.

• Value-added tax (VAT) for new builds: 25% of the transaction amount
• Property transfer tax for secondary real estate: 3% of the property's value
• Registration fee: from 0.01% to 0.05% of the transaction amount

• Legal support for the transaction: not mandatory but may cost from 1% to 2% of the transaction amount
• Agency fee: 2% to 4% of the property's value (including VAT)
• Additional costs when purchasing property in Croatia can range from 4% to 30% of the contract price

Property owners in Croatia are required to pay an annual property tax of 1.5% of the appraised value of the property.

The appraised value is approximately 70% of the market value.

When selling property in Croatia, sellers are required to pay a capital gains tax.

This tax is 24% of the difference between the sale price and the purchase price. If the property is sold for a profit, the tax is applied to that profit.

Property owners in Croatia should consider regular maintenance costs:

• Utilities (electricity, gas, water, heating, waste removal): from 85 to 189 euros per month

• Internet, television, telephone: from 8 to 17 euros per month
• Annual maintenance costs for an apartment: about 1,540 euros

If the property is rented out, owners must pay an income tax of 12% on rental income. 

This tax is levied on the total income earned from renting the property and must be declared annually.

The return on investment (ROI) from renting out property in Croatia can be quite high, especially in popular tourist areas and major cities. The average yield ranges from 4% to 6% per year, depending on the type of property and its location.

High demand for rental properties in tourist areas provides a stable income for property owners.