Buying process

Buying property in Croatia has many similarities to buying real estate anywhere in the world and therefore the same caution and common sense you would apply elsewhere should always be applied when buying Croatia property. Therefore with some caution and common sense coupled with the full support of Hvar Estates expert team of industry professionals the buying process can be straightforward and easily manageable.

Citizens of European Union have the same property purchase rights as Croatian citizens and can buy property in Croatia as private individuals. Other foreign Citizens are allowed to buy as individuals if there is a Reciprocity Agreement between Croatia and the State where you are a registered citizen.

Full details can be found at http://www.mvep.hr/en/

PURCHASE COSTS

Real Estate Transfer Tax:
Real estate transfer tax of 3% of the market value is imposed on the transfer of real estate ownership. This tax is payable by both domestic and foreign legal entities and individuals, unless an international treaty provides otherwise.

Value Added Tax (VAT)

The Value Added Tax (VAT) is levied at a flat rate of 25% as of 01 March 2012.

Legal Fee:

It is common practice to hire a lawyer to do all the necessary preparations. Lawyers typically charge around 1% of the purchase price (plus 25% VAT).

Real Estate Agency Fee:

The commission is 3% (plus 25% VAT) of the purchase price

Registration Fee:

Registration fees and other fees are around 0,3% of the property value.

Private Purchase

Suitable for individuals buying property as a long term investment (in excess of 3 years to avoid current Capital Gain Tax legislation) or a holiday home. You must apply to the Ministry of Justice for permission to purchase, but the purchase can be completed before permission is granted. If for some reason your application is refused, you can still purchase the property through the company route .

Company Purchase

If you are planning  to rent your property out, then purchasing through a company may be advisable. It also benefits from a mortgage facility should you require it. Incorporating a company cost approx €700 . You will need to deposit 20,000 Kuna , this is the minimum Investment capital.

A lawyer will form a limited liability Croatian company on your behalf. You will nominate the shareholders (i.e. Yourself). This Croatian real estate company can then purchase the Hvar property immediately without any permission requirements. It is a relatively inexpensive procedure that can be concluded within a matter of weeks.

Before any agreement is signed between both parties our lawyer and/or in conjunction with our clients lawyer will check that the ownership of title is clean. In simple terms that means that the person or persons selling the real estate are the only owners of that real estate and therefore have the right to sell it. The lawyer will also check that the vendor has paid all outstanding debt or taxes owed on the real estate.

If the Hvar property purchase is an existing structure, on signing a pre-contract, the buyer will pay a deposit, normally 10% of the total purchase price and agree a completion date, normally one month from the date of the signing of pre-contract. On this date a final main purchase contract is drawn up, signed by both parties in front of a notary and the outstanding balance paid.

This section of our site is intended as a guide only, giving you some basic information with regard to questions that are often asked by our clients buying on Hvar. For more detailed information about Hvar and information with regard to a specific purchase please contact Hvar Estates team directly.