GUIDE TO PURCHASING PROPERTY IN CROATIA

Free Copy
www.real-estate-dubrovnik.com
Aedium d.o.o. 2nd floor, business building
Tommy, Vukovarska 36/II
20000 Dubrovnik
Croatia
te
sta
E
l
Rea
•
ncy
e
g
A
te
sta
E
l
Rea
te
sta
E
l
Rea
l
Rea
•
ncy
Age
cy
gen
A
ate
Est
G A
N
I
S ATI
A
H RO
C
R
C
U
P
N
I
O
Y
T RT
E
E
D
I
P
GU PRO
cy •
n
e
Ag
cy
gen
A
ate
Est
l
a
Re
•
ncy
e
g
A
tate
s
E
eal
•R
ina
etn
r
k
e
et n
m
o
pr
za
a
j
i
nc
Age
et
rom
p
za
cija
n
e
g
•A
•
ina
n
t
re
nek
Ag
WHY BUY A PROPERTY THROUGH
THE AEDIUM AGENCY?
TIME SAVING at a meeting in the Agency you can immediately get all the information
about the property and view photos and other documents.
SUPPLY WIDTH The Agency has a wide range of properties and can give you the
best information about the same.
GUIDE TO PURCHASING
PROPERTY IN CROATIA
NEGOTIATION AND VERIFYING DOCUMENTS many people do not have
sufficient knowledge about the legal procedure or business practice, which is to be
complied with during the sale of property. A representative of the agency shall previously
check all documentation related to the property being offered.
»» Why choose the AEDIUM Agency?
THE AGENCY WILL SEARCH FOR YOU The agent will record all your needs and
criteria on the potential property you want to buy and keep you timely informed on new
offerings.
»» Funding - Costs
»» Check of the documentation about the property
»» Purchase agreement (conclusion of a legal transaction)
»» Acquisition of ownership right - registration
LEGAL SECURITY we work in collaboration with two Law Offices registered with the
Croatian Bar Association, and with the Public Notary Office, and all of our clients
have full legal security.
»» Capital transfer tax
»» Acquisition of property in the Republic of Croatia for
LICENCE The Agency has contracted an insurance policy against liability to third
parties.
foreign nationals
LEGAL SECURITY we work in collaboration with two Law Offices registered with the
Croatian Bar Association, and with the Public Notary Office, and all of our clients have
full legal security.Prije nego se odlučite na kupnju nekretnine, morate procijeniti Before you
FINANCING - COSTS
CHECKING THE DOCUMENTATION ABOUT
THE PROPERTY BEING PURCHASED
Agency commission amounts
to 2.5% (including VAT) of the
established purchase price. This
commission includes:
»» cost of lawyer who drafts the
(pre)contract of sale
decide to buy a property, you need to estimate
your financial possibilities (budget).
»» verification of signatures
If you do not have a sufficient amount
for the purchase of real estate and you
plan to include into financing a credit
from a commercial bank, it is necessary
to draw attention to the possible costs:
credit processing (depending on the bank),
solemnization of the loan agreement, making
real estate appraisal by a certified appraiser,
mortgage statement etc.
»» making proposal for the reg-
If payment of the purchase price is to another
bank, then there is the cost of money transfer
(from one account to the other), which is a
maximum of 100.00 Kn (Croatian Kuna).
in the contract by a Notary
Public
istration of ownership in the
Land Registry Department of
the Municipal Court in which
the property is located, and
submitting it.
»» at the request of the party,
providing assistance in filling out the application for
real estate transfer tax and
handing it over to the competent Tax Authorities.
When buying real estate, it is advisable to check the status of the property
you want to buy:
»» Ownership Certificate (land registry entry) is the most important document, where you
can get the exact situation of the day on the Internet. At the excerpt it should be written that it has been verified, that the seller is registered as the owner and that there
are no registrations or burdens to prevent or impede the transfer of ownership. If the
Ownership Certificate has recorded a mortgage burden which is less than the purchase
price, then it is possible at the payment of the sale price for a part of the purchase
price to be paid first directly to the bank (for the payment of loans and obtaining statement of release), and then the rest to be paid off to the seller’s account.
»» Approval for use
-the ultimate confirmation of the possibility of using and the final
evidence of the legality of a building or facility
*Buildings constructed before 15th Feb 1968 are considered legal (all things that
have been constructed on the same facility after that date should be legalized)
* Buildings constructed under a building permit issued prior to 19th June 1991,
are considered legal because their building permit also have the status of the
approval for use.
* For buildings constructed on the basis of building permits issued between 20th
June 1991 and 1st Oct 2007, the competent administrative body shall issue a
certificate establishing if it is all in accordance with the building permit in terms
of external dimensions and purpose
(CONCLUDING A LEGAL TRANSACTION)
»» Energy
certificate - all objects
that are in the building
total useful floor area
larger of 50sq.m
a
»» Use Certifi-
cate - if you are
buyer of land on which
there are no buildings,
request a certificate
for review on the use
of land in order to
determine whether it
is a building or nonbuilding plot, i.e. what kind of facility could be built on the plot in question.
»» Title deed – review of information about a property. In one title deed several cadas-
a
tral plots can be entered, i.e. one cadastral plot can be entered in more title deeds.
Right-holders of cadastral plots are also entered into the title deed. Being entered in
a title deed does not acquire the right of ownership or other registrable rights.
»» Copy of cadastral plan - graphical representation of cadastral plots of a
municipality area
SALES CONTRACT
cadastral
After reaching an agreement on all components of the legal transaction, at the
request of the parties we start drafting the same (pre-contract or contract). Pursuant
to the General Terms of the Agency business operation, in order to access the legal
transaction preparation through a legal office,
it is necessary to previously pay the costs of the
legal transaction preparation that amount to 10%
of the agreed Agency commission.
Purchase Agreement
stipulates provisions on
If you are unable to pay the one-time purchase
the real estate, price
price (for example, in order to take credit by
and method of payment,
establishing a mortgage on the property), it is
covering of overhead
necessary to conclude a preliminary agreement
costs and registration
to the main contract. Preliminary agreement
of ownership right and
commits the parties to conclude the contract,
changes in possession
upon the fulfillment of a certain condition and
status of the property as
/ or after a specific period of time and usually
well as all potential claims
with a cash advance payment on account, which
/ suggestions of the
usually amounts to 10% of the purchase price.
contracting parties.
If the buyer desists in that period from buying
the real estate, then the paid-up down payment
remains to the seller. If the seller withdraws
from the sale of real estate, then he must
return a double deposit amount to the buyer.
The preliminary agreement contains all the essential elements of the main (purchase)
contract.
ACQUISITION OF OWNERSHIP RIGHTS -
REGISTRATION
The right of ownership over the property is acquired by entry in the land-registry books
on the basis of the Sales Contract. Proposal to register property is submitted to the Land
Registry Department of the Municipal Court competent for the place where the property
is located.
REAL ESTATE TRANSFER TAX
(CAPITAL TRANSFER TAX)
»» Within 30 days from the date of signing the Sales Contract, the Agency will submit a
tax return (tax declaration) to the tax authorities (Internal Revenue Service) according to the place where the property is located. The buyer is required to complete the
tax return, sign it, and attach the required documentation.
»» Real estate transfer tax amounts to 5% (five percent) of the value of the property.
»» Byers of the first property that resolve their housing problems, may be exempt
from the payment of real estate transfer tax on certain conditions that need to be
checked at the IRS (e.g. all members of the immediate family must register their
residence at the address of the apartment / flat that is being purchased, and state
that the immediate family members own no other valuable real estate ...) . Depending on the number of household members, exemption is made up to specific floor
space. (5% tax is paid for the difference in square meters). If within 3 years from the
date of acquisition of property the citizen alienates, leases or changes residence,
subsequently he has to pay the tax from which he was exempt.
»» If the real estate is located in an area of special state concern, there is a possibility
of a right to exemption, accompanied by the necessary documentation (change of
residence to the address of the flat/apartment). Purchased property shall not be alienated within 10 years, otherwise you will be required to pay 5% tax on real estate
transfer.
»» Tax when purchasing property under construction - new building-which is bought
directly from investors - newly built properties are subject to 25% VAT included in
the price of the property (not charged separately), and the additional tax on the
value of land on which it is erected, proportional to the size of the real estate that is
purchased, at the rate of 5% percent.
* In these conditions, there is also the possibility of exemption from tax of 5% if this
is the first real estate or property that is located in areas of special state concern.
ACQUISITION OF PROPERTY IN THE REPUBLIC
OF CROATIA FOR FOREIGN NATIONALS
EU citizens
Natural and legal persons from EU member states acquire legal ownership of real estate
in Croatia under the same conditions as nationals of the Republic of Croatia.
Non-EU citizens
Foreign nationals from outside the EU can buy real estate on the principle of reciprocity.
Before buying a property, it is necessary to seek approval from the Ministry of Justice
of the Republic of Croatia. Foreign citizens without mutual consent, i.e. reciprocity,
can purchase the property on behalf of the company. The company is established with
headquarters in the Republic of Croatia, whose owner is a foreigner who buys a property.
Limitations
All foreign nationals are not able to buy i.e. to register the property in their own name
which is located in the exclusive territories, which are:
»» Agricultural land
»» Protected nature areas
Personal Identification Number
Before the conclusion of the legal transaction it is necessary to obtain a VAT number
issued by the IRS office.
To make the registration of property in the land register it is necessary to submit a copy
of your passport previously certified at the Public Notary Office.
Aedium d.o.o. 2nd floor, business building Tommy, Vukovarska 36/II, 20000 Dubrovnik,Croatia
T. +385 (0)20 311-344, F. +385 (0)20 311-345, e-mail:[email protected]
www.real-estate-dubrovnik.com
All rights reserved C All rights reserved:
No part of this publication may be downloaded, copied, translated or in any way reproduce in any
printed or eletronic media without prior written consent and premission