Buying Procedure

Croatia has a well established institutional and legal framework which is harmonised with European standards. As in all countries the buying and selling of properties in Croatia follows rules, regulations and procedures that are specific to this country, ingrained not only in its legal and commercial practice but also in the local culture.

Once Adriatic Riviera has assisted you in finding the right property and price has been agreed it is important to appoint a solicitor. While we can advise on various legal and tax issues we would strongly suggest that you employ your own solicitor and we can assist you in finding a suitable one. The solicitor will formalise the pre-contract and final contract which will determine the price, deposit and completion date and any other conditions deemed necessary.

He will also check that the appropriate documentation is in order, and that there are no outstanding fees, taxes and debts on the property up to the official date of purchase. At this stage we can help you to obtain a written survey and translate that survey in English if need be. If the surveyor's report is satisfactory the pre-contract can be signed. The pre-contract is based on a non refundable deposit which by law amounts to between 10% and 15% of the agreed price of the property.

If after signing the pre-contract the vendor does not proceed you are entitled to a refund of twice your deposit. On the date agreed the two sides meet and sign final contract and finalise the transaction.

There are two ways to purchase property in Croatia - 1) as a private individual or 2) by forming a Croatian limited company:-

1. Taking the private route it is essential to obtain authorisation from the Ministry of Justice of the Republic of Croatia. This is a straightforward procedure that usually takes 6 months but can take longer. This doesn't, however, prohibit taking possession of the property, renting or selling it on to a third party.
2. By establishing a Croatian limited company which has the same rights, obligations and legal status as any domestic company and is entirely owned and controlled by the purchaser. This procedure will take between 4 and 6 weeks and incurs legal and formation costs and also ongoing costs to maintain the company. It is necessary to employ a Croatian accountant/bookkeeper to make relevant returns to the Croatian government. It is possible, on joining the VAT system, to reclaim VAT (22%) on land and other costs incurred in certain circumstances. A Croatian company may avail of mortgages/loans from some European banks operating in Croatia.

More detailed information about the buying procedures is available on request.

Initial Purchase Costs

• 5% Real Estate Transfer Tax (Stamp Duty)
• 1.5% to 2% solicitor's fee
• 4% estate agent's fee (Adriatic Riviera)

Annual on-going costs

• Non-Resident's tax currently charged @ 1.25 euro per m2 of internal property floor area
• Ground tax @ 20 cents per m2
• Management fee is 1% of the market value of the property
• Waste Disposal Charges @ around 40 euros
• Electricity charges - 0n 01.02.2004 charged @ 5 cents per kWh
• Water charges - On 01.02.2004 one cubic meter of water costs 92 cents
• Phone line rental charged @ 10 euros per month
• Average house and contents insurance costs 400 euros.