Frequently Asked Questions

WHAT IS REAL ESTATE?

According to the principle of unity of real estate, a property is a parcel of land together with everything that is permanently attached to it on or under its surface. This means that when you purchase an apartment, you simultaneously acquire an ideal share of the building and the land on which it is built. Similarly, if you purchase a cadastral parcel, you automatically become the owner of everything constructed on it, regardless of whether it is officially registered, mapped, or entered in the cadastral plans and land registry.

WHAT ARE LAND REGISTERS?

Land registers are public records of the legal status of real estate, relevant for legal transactions. Any interested party is entitled to examine them and request an excerpt. They enjoy public trust and have the evidentiary power of public documents. A purchaser acting in good faith, or relying on the land register, is legally protected if they were unaware, or had no reason to suspect, that the registered information was incomplete or different from the off-register situation.

WHAT IS A PROPERTY OWNERSHIP SHEET?

There are two types of extracts from the Land Register, depending on whether the property is recorded in the main land register or in the Book of Deposited Contracts.

Property ownership sheet (main land register) consists of:

• Possession sheet (A) – contains information on all cadastral parcels forming one land registry unit and all related cadastral changes.
• Ownership sheet (B) – contains information about the owner, changes in ownership, and personal restrictions on the owner regarding property disposal.
• Encumbrance sheet (C) – contains information about rights and encumbrances on the property (mortgages, personal and real easements, building rights, obligatory rights).

Property ownership sheet (Book of Deposited Contracts) consists of:

• Listing sheet (A1) – contains information about all cadastral parcels forming one land registry unit and all related cadastral changes, and if there is a building on the parcel, its location, address, and house number.
• Listing sheet (A2) – if a building exists on the parcel, contains a description of the property (floor, area in square meters, etc.).
• Listing sheet (B) – contains information about the owner, changes in ownership, and personal restrictions.
• Listing sheet (C) – contains information about rights and encumbrances on the property.

HOW IS THE VALUE OF REAL ESTATE DETERMINED?

The sale price of a property is determined by the seller according to market trends and supply-demand dynamics. The market value is determined by the Tax Administration according to its tables, while the value needed for a bank loan is determined exclusively by authorized appraisers.

WHO CAN PURCHASE REAL ESTATE IN CROATIA?

There are no restrictions or penalties for purchasing real estate in the Republic of Croatia. However, to register the property in the land register, proof of Croatian citizenship must be attached to the purchase agreement.

CAN FOREIGN CITIZENS PURCHASE REAL ESTATE IN CROATIA?

Yes. They must obtain approval from the Ministry of Foreign Affairs for the contract through which they purchase the property, to attach this approval to the registration request. This approval, subject to reciprocity, is issued by the Ministry of Foreign Affairs following prior approval from the Ministry of Justice. Based on Article 60 of the Stabilization and Association Agreement between Croatia and the EU and its member states, from February 1, 2009, EU citizens are granted the same treatment as Croatian citizens in acquiring property.

OBLIGATIONS OF BUYERS AND SELLERS IN REAL ESTATE TRANSACTIONS

The buyer must pay the seller the full agreed purchase price, and the seller must deliver the property to the buyer and allow the transfer of ownership rights.

WHAT IS A DEPOSIT AND WHAT DOES IT MEAN?

A deposit signifies the seriousness and genuine intent of purchasing the property and is usually 10% of the purchase price. The deposit is regulated by the Civil Obligations Act:

• If one party gives a sum of money or other fungible items as a deposit, the contract is considered concluded when the deposit is given, unless otherwise agreed.
• Unless otherwise agreed, the buyer who paid the deposit may withdraw from the contract leaving the deposit to the seller, whereas if the seller withdraws, they must return double the deposit.

WHAT IS THE CADASTRE OF LAND?

The cadastre is an administrative body responsible for maintaining cadastral data about real estate, land, and utilities.

• The cadastral file refers to all documentation maintained for a particular cadastral municipality.
• The land cadastre is a public record of the location, shape, area, construction, usage, productive capacity, and users/holders of the land.
• It records parcel numbers, size, shape, buildings and other constructions on or below the land, and their users or holders.

WHAT IS LAND PARCELATION?

Land parcelation is the division or merger of two or more cadastral parcels. It can occur in construction or agricultural zones.

• Parcelation of construction land must follow building permits, location permits, cadastral determinations, and zoning plans.
• Parcelation of agricultural land requires a certificate from the competent construction office that the parcel is outside construction boundaries.
• Parcelation is carried out in the cadastre.

WHEN IS OWNERSHIP ACQUIRED?

The buyer does not acquire ownership by paying the purchase price, but by registering the right in the land register (Article 119 of the Ownership Act).

WHAT IS A PRE-CONTRACT?

A pre-contract is a document in which two parties declare their intention to conclude a main contract under specified terms. It must contain all essential elements of the main contract. For real estate transactions, the pre-contract must be in writing.

WHERE AND WHO CERTIFIES THE PURCHASE AGREEMENT?

The seller signs and certifies the purchase agreement with a notary in Croatia or at a Croatian diplomatic mission abroad. If notarized abroad, it must be apostilled or authenticated by the competent court.

WHAT IS A TABULAR DECLARATION?

A declaration by which the seller confirms receipt of the full purchase price and allows the buyer to register ownership rights in the land register.

WHAT IS THE REAL ESTATE TRANSACTION TAX IN CROATIA?

All real estate transactions in Croatia are taxed at a uniform rate of 5% of the purchase price. The tax is based on the purchase agreement price and the Tax Administration’s assessment. The buyer bears the tax obligation.

IS THERE A DIFFERENCE BETWEEN DOMESTIC AND FOREIGN TAXPAYERS?

Domestic and foreign persons are equal regarding real estate transaction tax, unless otherwise specified by an international agreement.

WHO DETERMINES THE TAX BASE FOR REAL ESTATE TRANSACTIONS?

The competent Tax Administration office determines the tax base for the transaction, which the buyer is obliged to pay.

WHAT IS THE SELLER'S TAX LIABILITY?

The seller may pay income tax if selling the property within three years of acquisition, on the difference between the purchase and sale price, but may be exempted.

WHAT IS THE DEADLINE FOR TAX REPORTING AND PAYMENT?

The buyer must report the tax within 30 days of notarization and pay within 15 days of receiving the tax assessment.

WHAT IS A BUILDING PERMIT?

A building permit authorizes the start of construction. It confirms that the project complies with legal requirements and that all prerequisites for construction are met. Issued by the local administrative office, it expires if construction does not start within two years but may be extended once for two more years.

WHAT IS A USE PERMIT?

A use permit confirms that the building was constructed according to the project and building permit, is safe, and may be used for its intended purpose.

HOW TO VERIFY THAT DOCUMENTS ARE “IN ORDER”?

Properties are checked by Agency Neelcon before sale, but buyers can also verify documents with a notary or lawyer (approx. €50–100) at the pre-contract or main contract stage. Proof of ownership is the land register extract, describing the property (A), the owner (B), and encumbrances (C). Unofficial documentation can be viewed at www.pravosudje.hr

CAN PROPERTIES BE PURCHASED IF DOCUMENTATION IS NOT “ORDERLY”?

It is recommended to consult a lawyer or notary before signing any sales document.

WHAT IS OWNERSHIP?

Ownership is the real right to a thing, allowing the owner to use it and exclude others, within legal limits. Ownership is recorded in the land register.

WHAT IS CO-OWNERSHIP?

When multiple people own a thing with proportional shares, they are co-owners, and their portions are determined by agreement or, in doubt, assumed equal.

WHAT IS JOINT OWNERSHIP?

Stvar je u zajedničkom vlasništvu kad na nepodijeljenoj stvari postoji vlasništvo dviju ili više osoba (zajedničara) koje sve u njemu imaju udjela, ali veličina njihovih udjela nije određena, bez obzira na to što je odrediva

HOW TO DETERMINE THE RELIABLE MARKET VALUE OF A PROPERTY?

A licensed real estate agent or certified construction appraiser can provide an accurate market valuation.