We talked about all the significant issues and topics related to property taxes and the new law.<\/p>\n
Read on and stay informed on this vital subject!<\/p>\n
<\/p>\n
What are the basic property taxes in Croatia?<\/strong><\/h2>\nBranimir Zub\u010di\u0107:<\/em><\/strong> The primary tax associated with property purchases in Croatia is the property transfer tax, mandated by the Real Estate Transfer Tax Act<\/em>.<\/p>\nThis tax is 3% of the property’s market value<\/u><\/strong> when the tax obligation arises. There are conditions under which a property buyer can be exempt from paying this tax, which we will explain later.<\/p>\nBesides the real estate transfer tax, a 25% value added tax (VAT)<\/u><\/strong> may apply. A buyer who pays VAT on a purchased property is exempt from the 3% real estate transfer tax, and vice versa, to prevent double taxation.<\/p>\nThe 25% VAT applies to:<\/u><\/strong><\/p>\n\n- The delivery of buildings<\/strong> (or parts of buildings) that have never been occupied or used,<\/strong> including the land they occupy.<\/li>\n
- The delivery of a building or part of a building (including the land) where less than two years have passed<\/strong> since first occupancy.<\/li>\n
- The delivery of construction land<\/strong>.<\/li>\n<\/ul>\n
VAT also applies to renovated buildings or parts and the land on which they are located if renovation costs<\/strong> within the two years before delivery exceed 50% of the selling price.<\/p>\n <\/p>\n
Are there any monthly or yearly property taxes in Croatia?<\/strong><\/h2>\n![\"Grad](\"https:\/\/solhome.hr\/wp-content\/uploads\/2025\/10\/2-767x1024.webp\")
<\/p>\n
In some countries, property owners and landowners pay annual taxes. We asked Branimir Zub\u010di\u0107 to clarify whether Croatia has any annual property or land taxes after purchase.<\/p>\n
Branimir Zub\u010di\u0107:<\/em><\/strong> Currently, in 2024,<\/strong> neither Croatian citizens nor foreigners are generally required to pay any monthly or annual property taxes on purchased properties (e.g., apartments, houses, or land).<\/p>\nThe only expenses are typical utilities<\/strong>, such as water, electricity, and communal services.<\/p>\nHowever, an exception applies to holiday homes<\/u><\/strong>, which are subject to a tax under the local tax act.<\/p>\nThis act defines holiday homes<\/strong> as buildings (or parts) used seasonally or occasionally.<\/p>\nTax for holiday homes ranges from 0.60 to 5.00 euros per square meter<\/strong> of usable area, with the rate set by local government councils.<\/p>\nThe amount payable depends on the municipality or city where the property is located.<\/p>\n
<\/p>\n
What changes does the new property tax law in Croatia brings?<\/strong><\/h3>\n![\"Penkala](\"https:\/\/solhome.hr\/wp-content\/uploads\/2025\/10\/3-1024x683.webp\")
<\/p>\n
Branimir Zub\u010di\u0107:<\/em><\/strong> It\u2019s essential to note that, as of January 1, 2025, significant changes<\/strong> will take effect under the Amendments to the Local Tax Act<\/em>.<\/p>\nThe new law broadens the definition of taxable property<\/strong>.<\/p>\nThis definition will include any residential building or part of a residential-commercial building, apartment, or any other self-contained residential space.<\/p>\n
This excludes buildings used exclusively for storing agricultural machinery and equipment or properties designated for production or non-production purposes, as defined by the utility fee decision.<\/p>\n
Currently, the Local Tax Act<\/em> allows local governments to decide whether or not to levy a holiday home tax.<\/p>\nUnder the new<\/strong> amendments, local governments will be required to implement property taxes<\/u><\/strong>.<\/p>\nBoth domestic and foreign individuals and companies owning property <\/strong>on March 31 of the tax year will be liable for this tax<\/strong>.<\/p>\nRevenue will be distributed, with 80% going to local governments and 20% to the national treasury.<\/p>\n
For newly built properties, the tax obligation begins:<\/strong><\/p>\n\n- On the date when the use permit becomes final (when no further appeals are possible), obligating the owner to pay for that year.<\/li>\n
- If the owner begins using the property without a final use permit, the tax obligation starts from the first day of use.<\/li>\n<\/ul>\n
The new property tax will be 0.60 to 8.00 euros per square meter<\/strong> annually, compared to the current holiday home tax of up to 5 euros per square meter.<\/p>\nExemptions under the new law include properties:<\/u><\/strong><\/p>\n\n- Used as permanent residences<\/strong>.<\/li>\n
- Leased for permanent residence under a rental contract<\/strong>.<\/li>\n
- Used for public purposes<\/strong> or institutional housing.<\/li>\n
- Listed as assets for sale<\/strong> in company accounts, if listed within six months before March 31 of the tax year.<\/li>\n
- Acquired to settle unpaid debts<\/strong>, if acquired within six months before March 31 of the tax year.<\/li>\n
- Uninhabitable<\/strong> due to declared natural disasters.<\/li>\n
- Otherwise deemed unsuitable<\/strong> for housing.<\/li>\n
- Owned by the Republic of Croatia<\/strong>.<\/li>\n
- Owned by local governments<\/strong>, used only within their jurisdiction.<\/li>\n<\/ol>\n
Socially vulnerable citizens<\/strong> may qualify for tax exemption<\/strong>, subject to conditions set by the local government\u2019s representative body.<\/p>\n <\/p>\n
Are there tax reliefs or exemptions for foreign buyers?<\/strong><\/h2>\nBranimir Zub\u010di\u0107:<\/em><\/strong> Foreign buyers do not have any tax relief or exemptions. Croatian and foreign nationals are equal under the law.<\/p>\n <\/p>\n
What about capital gains tax on property sales?<\/strong><\/h2>\n![\"Kovanice\"](\"https:\/\/solhome.hr\/wp-content\/uploads\/2025\/10\/4-1024x683.webp\")
<\/p>\n
What taxes apply if you sell, exchange, or gift a property? Are capital gains on property sales taxable?<\/p>\n
Branimir Zub\u010di\u0107:<\/em><\/strong> This concerns income from property transfers, governed by the Income Tax Act<\/em>, including sales, exchanges, and other transfers.<\/p>\nTaxable income<\/u><\/strong> is the difference between the property’s market value (or transferred asset) and its purchase price (adjusted for inflation). Transfer costs are deductible.<\/p>\nCapital gains tax does not apply if:<\/u><\/strong><\/p>\n\n- The property served as the main residence of the owner<\/strong> or their immediate family.<\/li>\n
- The property or asset is transferred after two years<\/strong> from acquisition.<\/li>\n<\/ul>\n
Capital gains tax applies if:<\/u><\/strong><\/p>\n\n- More than 3 properties or assets of the same type are transferred within five years.<\/li>\n
- A multi-unit building, business premises, construction site, or multiple plots are transferred.<\/li>\n<\/ul>\n
Income from the disposal of real estate and property rights is not taxed in the following cases:<\/strong><\/p>\n\n- If the disposal is conducted between spouses, direct relatives, and other close family members<\/li>\n
- If the disposal is conducted between divorced spouses<\/li>\n
- If the disposal is directly related to divorce or inheritance of real estate and property rights.<\/li>\n<\/ul>\n
<\/p>\n
How are rental income taxes calculated?<\/strong><\/h2>\n![\"Klju\u010devi](\"https:\/\/solhome.hr\/wp-content\/uploads\/2025\/10\/5-1024x683.webp\")
<\/p>\n
What taxes do you need to pay if you rent out your property long-term rather than for tourism?<\/p>\n
Branimir Zub\u010di\u0107:<\/em><\/strong> Rental income tax is governed by the Income Tax Act<\/em>, at a rate of 12%, paid monthly<\/strong>.<\/p>\nAfter signing a rental contract, landlords must submit it to the tax authority within 8 days. If the contract is notarized, the notary submits it on the landlord\u2019s behalf.<\/p>\n
For rental income, a 30% expense deduction is applied<\/strong>, except for tourism rentals, which have different rules and rates.<\/p>\nFor example<\/u><\/strong>, if Ivan Ivi\u0107 rents an apartment in Zadar for 1,000 euros monthly, his taxable income would be 700 euros after a 30% deduction. With a 12% tax rate, he pays 84 euros monthly.<\/p>\nThe upcoming Income Tax Act 2025<\/em> introduces a new exemption<\/strong>: rental income between close family members will no longer be taxable.<\/p>\n <\/p>\n
Are there taxes on gifted properties?<\/strong><\/h2>\n![\"Zagrljeni](\"https:\/\/solhome.hr\/wp-content\/uploads\/2025\/10\/6-683x1024.webp\")
<\/p>\n
Certain conditions allow exemption from the 3% Real Estate Transfer Tax<\/em> <\/strong>on gifted properties<\/strong>.<\/p>\nTax-exempt scenarios include:<\/strong><\/p>\n\n- Spouses, direct descendants, and ascendants<\/strong> (in the direct line), as well as adoptees and adoptive parents in such a relationship with the deceased or donor.<\/li>\n
- Legal entities and individuals to whom the Republic of Croatia<\/strong> or local\/regional self-government units gift property<\/strong> without compensation.<\/li>\n
- Former spouses<\/strong> when settling their property relations.<\/li>\n<\/ul>\n
The direct line<\/strong> includes individuals who descend from one another, i.e., ancestors and descendants.<\/p>\nFor example, when a parent gifts property to their child, or a grandparent to their grandchild, and vice versa.<\/p>\n
The same applies to inheritance<\/strong>.<\/p>\nFor example, if Ivo Ivi\u0107 inherits a house from his great-grandfather, he will not be obligated to pay the real estate transfer tax.<\/p>\n
However, if a brother gifts property to his sister, this transfer is subject to the real estate transfer tax, as it is for inheritance. Technically, a brother and sister are in the collateral line, not the direct line like a great-grandparent and great-grandchild.<\/p>\n
<\/p>\n
How can tax policy impact a buyer\u2019s long-term investment?<\/strong><\/h2>\nBranimir Zub\u010di\u0107:<\/em><\/strong> Tax policy should significantly impact long-term investments.<\/p>\nIn Croatia, the property market is very attractive to foreign investors<\/strong>, especially EU nationals. Tax policy has historically had little impact on investments and is unlikely to affect them shortly.<\/p>\nThe property market is a significant revenue source and economic driver for Croatia<\/strong>. With favorable geographic conditions, Croatia remains competitive among neighboring countries. Real estate investment here has become popular due to a stable, growing market that requires little expertise or substantial capital.<\/p>\nAccordingly, tax policy changes are not expected to affect investment trends<\/strong>.<\/p>\nFinally, we hope that you found information in this interview useful. We also thank Branimir Zub\u010di\u0107<\/strong> for sharing his expertise on property taxes in Croatia. If you need advice or a lawyer in the field of property law, contact his office in Zadar at <\/strong>ured@gn.hr<\/strong><\/a>.<\/p>\nAlso, if you are thinking about buying a property in Croatia, learn more about real estate investment in our wonderful country on this blog<\/strong><\/a>. Or contact us<\/strong><\/a>, we will happily help you find your dream home!<\/p>\nPhoto:<\/em> Pexels – <\/em>Nataliya Vaitkevich<\/em><\/a>,\u00a0 <\/em>Ivica D\u017eambo<\/em><\/a>, \u00a0<\/em>RDNE Stock project<\/em><\/a>, <\/em>Pixabay<\/em><\/a>, <\/em>Ron Lach<\/em><\/a>, <\/em>Jakub Zerdzicki<\/em><\/a>. <\/em><\/p>\n","protected":false},"excerpt":{"rendered":"Thinking about buying a property in Croatia? Curious about the taxes and how they might impact your investment? In 2025, Croatia will introduce a new property tax law. To give you all the important information, we spoke to Branimir Zub\u010di\u0107, a lawyer specialised in property low. We talked about all the significant issues and topics […]<\/p>\n","protected":false},"author":1,"featured_media":5200,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[12],"tags":[],"class_list":["post-5334","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/solhome.hr\/en\/wp-json\/wp\/v2\/posts\/5334","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/solhome.hr\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/solhome.hr\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/solhome.hr\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/solhome.hr\/en\/wp-json\/wp\/v2\/comments?post=5334"}],"version-history":[{"count":3,"href":"https:\/\/solhome.hr\/en\/wp-json\/wp\/v2\/posts\/5334\/revisions"}],"predecessor-version":[{"id":5337,"href":"https:\/\/solhome.hr\/en\/wp-json\/wp\/v2\/posts\/5334\/revisions\/5337"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/solhome.hr\/en\/wp-json\/wp\/v2\/media\/5200"}],"wp:attachment":[{"href":"https:\/\/solhome.hr\/en\/wp-json\/wp\/v2\/media?parent=5334"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/solhome.hr\/en\/wp-json\/wp\/v2\/categories?post=5334"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/solhome.hr\/en\/wp-json\/wp\/v2\/tags?post=5334"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
This tax is 3% of the property’s market value<\/u><\/strong> when the tax obligation arises. There are conditions under which a property buyer can be exempt from paying this tax, which we will explain later.<\/p>\n Besides the real estate transfer tax, a 25% value added tax (VAT)<\/u><\/strong> may apply. A buyer who pays VAT on a purchased property is exempt from the 3% real estate transfer tax, and vice versa, to prevent double taxation.<\/p>\n The 25% VAT applies to:<\/u><\/strong><\/p>\n VAT also applies to renovated buildings or parts and the land on which they are located if renovation costs<\/strong> within the two years before delivery exceed 50% of the selling price.<\/p>\n <\/p>\n In some countries, property owners and landowners pay annual taxes. We asked Branimir Zub\u010di\u0107 to clarify whether Croatia has any annual property or land taxes after purchase.<\/p>\n Branimir Zub\u010di\u0107:<\/em><\/strong> Currently, in 2024,<\/strong> neither Croatian citizens nor foreigners are generally required to pay any monthly or annual property taxes on purchased properties (e.g., apartments, houses, or land).<\/p>\n The only expenses are typical utilities<\/strong>, such as water, electricity, and communal services.<\/p>\n However, an exception applies to holiday homes<\/u><\/strong>, which are subject to a tax under the local tax act.<\/p>\n This act defines holiday homes<\/strong> as buildings (or parts) used seasonally or occasionally.<\/p>\n Tax for holiday homes ranges from 0.60 to 5.00 euros per square meter<\/strong> of usable area, with the rate set by local government councils.<\/p>\n The amount payable depends on the municipality or city where the property is located.<\/p>\n <\/p>\n Branimir Zub\u010di\u0107:<\/em><\/strong> It\u2019s essential to note that, as of January 1, 2025, significant changes<\/strong> will take effect under the Amendments to the Local Tax Act<\/em>.<\/p>\n The new law broadens the definition of taxable property<\/strong>.<\/p>\n This definition will include any residential building or part of a residential-commercial building, apartment, or any other self-contained residential space.<\/p>\n This excludes buildings used exclusively for storing agricultural machinery and equipment or properties designated for production or non-production purposes, as defined by the utility fee decision.<\/p>\n Currently, the Local Tax Act<\/em> allows local governments to decide whether or not to levy a holiday home tax.<\/p>\n Under the new<\/strong> amendments, local governments will be required to implement property taxes<\/u><\/strong>.<\/p>\n Both domestic and foreign individuals and companies owning property <\/strong>on March 31 of the tax year will be liable for this tax<\/strong>.<\/p>\n Revenue will be distributed, with 80% going to local governments and 20% to the national treasury.<\/p>\n For newly built properties, the tax obligation begins:<\/strong><\/p>\n The new property tax will be 0.60 to 8.00 euros per square meter<\/strong> annually, compared to the current holiday home tax of up to 5 euros per square meter.<\/p>\n Exemptions under the new law include properties:<\/u><\/strong><\/p>\n Socially vulnerable citizens<\/strong> may qualify for tax exemption<\/strong>, subject to conditions set by the local government\u2019s representative body.<\/p>\n <\/p>\n Branimir Zub\u010di\u0107:<\/em><\/strong> Foreign buyers do not have any tax relief or exemptions. Croatian and foreign nationals are equal under the law.<\/p>\n <\/p>\n What taxes apply if you sell, exchange, or gift a property? Are capital gains on property sales taxable?<\/p>\n Branimir Zub\u010di\u0107:<\/em><\/strong> This concerns income from property transfers, governed by the Income Tax Act<\/em>, including sales, exchanges, and other transfers.<\/p>\n Taxable income<\/u><\/strong> is the difference between the property’s market value (or transferred asset) and its purchase price (adjusted for inflation). Transfer costs are deductible.<\/p>\n Capital gains tax does not apply if:<\/u><\/strong><\/p>\n Capital gains tax applies if:<\/u><\/strong><\/p>\n Income from the disposal of real estate and property rights is not taxed in the following cases:<\/strong><\/p>\n <\/p>\n What taxes do you need to pay if you rent out your property long-term rather than for tourism?<\/p>\n Branimir Zub\u010di\u0107:<\/em><\/strong> Rental income tax is governed by the Income Tax Act<\/em>, at a rate of 12%, paid monthly<\/strong>.<\/p>\n After signing a rental contract, landlords must submit it to the tax authority within 8 days. If the contract is notarized, the notary submits it on the landlord\u2019s behalf.<\/p>\n For rental income, a 30% expense deduction is applied<\/strong>, except for tourism rentals, which have different rules and rates.<\/p>\n For example<\/u><\/strong>, if Ivan Ivi\u0107 rents an apartment in Zadar for 1,000 euros monthly, his taxable income would be 700 euros after a 30% deduction. With a 12% tax rate, he pays 84 euros monthly.<\/p>\n The upcoming Income Tax Act 2025<\/em> introduces a new exemption<\/strong>: rental income between close family members will no longer be taxable.<\/p>\n <\/p>\n Certain conditions allow exemption from the 3% Real Estate Transfer Tax<\/em> <\/strong>on gifted properties<\/strong>.<\/p>\n Tax-exempt scenarios include:<\/strong><\/p>\n The direct line<\/strong> includes individuals who descend from one another, i.e., ancestors and descendants.<\/p>\n For example, when a parent gifts property to their child, or a grandparent to their grandchild, and vice versa.<\/p>\n The same applies to inheritance<\/strong>.<\/p>\n For example, if Ivo Ivi\u0107 inherits a house from his great-grandfather, he will not be obligated to pay the real estate transfer tax.<\/p>\n However, if a brother gifts property to his sister, this transfer is subject to the real estate transfer tax, as it is for inheritance. Technically, a brother and sister are in the collateral line, not the direct line like a great-grandparent and great-grandchild.<\/p>\n <\/p>\n Branimir Zub\u010di\u0107:<\/em><\/strong> Tax policy should significantly impact long-term investments.<\/p>\n In Croatia, the property market is very attractive to foreign investors<\/strong>, especially EU nationals. Tax policy has historically had little impact on investments and is unlikely to affect them shortly.<\/p>\n The property market is a significant revenue source and economic driver for Croatia<\/strong>. With favorable geographic conditions, Croatia remains competitive among neighboring countries. Real estate investment here has become popular due to a stable, growing market that requires little expertise or substantial capital.<\/p>\n Accordingly, tax policy changes are not expected to affect investment trends<\/strong>.<\/p>\n Finally, we hope that you found information in this interview useful. We also thank Branimir Zub\u010di\u0107<\/strong> for sharing his expertise on property taxes in Croatia. If you need advice or a lawyer in the field of property law, contact his office in Zadar at <\/strong>ured@gn.hr<\/strong><\/a>.<\/p>\n Also, if you are thinking about buying a property in Croatia, learn more about real estate investment in our wonderful country on this blog<\/strong><\/a>. Or contact us<\/strong><\/a>, we will happily help you find your dream home!<\/p>\n Photo:<\/em> Pexels – <\/em>Nataliya Vaitkevich<\/em><\/a>,\u00a0 <\/em>Ivica D\u017eambo<\/em><\/a>, \u00a0<\/em>RDNE Stock project<\/em><\/a>, <\/em>Pixabay<\/em><\/a>, <\/em>Ron Lach<\/em><\/a>, <\/em>Jakub Zerdzicki<\/em><\/a>. <\/em><\/p>\n","protected":false},"excerpt":{"rendered":" Thinking about buying a property in Croatia? Curious about the taxes and how they might impact your investment? In 2025, Croatia will introduce a new property tax law. To give you all the important information, we spoke to Branimir Zub\u010di\u0107, a lawyer specialised in property low. We talked about all the significant issues and topics […]<\/p>\n","protected":false},"author":1,"featured_media":5200,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[12],"tags":[],"class_list":["post-5334","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/solhome.hr\/en\/wp-json\/wp\/v2\/posts\/5334","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/solhome.hr\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/solhome.hr\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/solhome.hr\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/solhome.hr\/en\/wp-json\/wp\/v2\/comments?post=5334"}],"version-history":[{"count":3,"href":"https:\/\/solhome.hr\/en\/wp-json\/wp\/v2\/posts\/5334\/revisions"}],"predecessor-version":[{"id":5337,"href":"https:\/\/solhome.hr\/en\/wp-json\/wp\/v2\/posts\/5334\/revisions\/5337"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/solhome.hr\/en\/wp-json\/wp\/v2\/media\/5200"}],"wp:attachment":[{"href":"https:\/\/solhome.hr\/en\/wp-json\/wp\/v2\/media?parent=5334"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/solhome.hr\/en\/wp-json\/wp\/v2\/categories?post=5334"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/solhome.hr\/en\/wp-json\/wp\/v2\/tags?post=5334"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}\n
Are there any monthly or yearly property taxes in Croatia?<\/strong><\/h2>\n
<\/p>\nWhat changes does the new property tax law in Croatia brings?<\/strong><\/h3>\n
<\/p>\n\n
\n
Are there tax reliefs or exemptions for foreign buyers?<\/strong><\/h2>\n
What about capital gains tax on property sales?<\/strong><\/h2>\n
<\/p>\n\n
\n
\n
How are rental income taxes calculated?<\/strong><\/h2>\n
<\/p>\nAre there taxes on gifted properties?<\/strong><\/h2>\n
<\/p>\n\n
How can tax policy impact a buyer\u2019s long-term investment?<\/strong><\/h2>\n