Useful facts about acquisition of real estate and taxes in Croatia
Due to a change in the law decided in February 2009 the acquisition of real estate by foreign nationals in Croatia it is now possible for all EU citizens to acquire real estate in Croatia without obstacles. This means that the whole process of real estate acquisition has been significantly simplified and property transfers are comparable with the procedures in Germany, Austria and other European countries.
Based on maintaining a home in Croatia, you are a tax resident if you have a residence there at your exclusive andcontinuous disposal for at least 183 days under circumstances that indicate you intend to keep and use that accommodation. Again, this period may overlap calendar years. Your length of stay is not relevant, nor does it matter if the accommodation is owned or rented.
If you do not receive a salary, consultancy fees, or a similar income in Croatia, then the tax situation is much more favorable, particularly for retirees.
Croatia has no wealth tax, and the following income is tax free:
-Pensions received from abroad
-Interest payments on loans, investments, securities, deposits with financial
institutions, and similar incomes
-Capital gains from trading securities and other financial assets
-Capital gains from real estate if you occupied the property, held it more than three years, or sold it to your spouse or an immediate family member
-Inheritance and gifts are exempt from taxation in the first line of succession. (In other cases, there is a flat rate of 5%.)
Foreigners are subject to tax on the following forms of Croatian income:
-Income from employment that is received in Croatia or from work in Croatia bold
-Income from a business in Croatia
-Income from real estate
-Income from one’s own or chartered marine ships/aircraft used for dispatching goods or people from Croatian ports/airports
-Income from independent personal activities (deliveries of goods or rendering of services) that are carried out in Croatia or abroad, and are used for the performance of an activity in Croatia
-Income from capital or insurance that originates from within Croatia.
For non-EU citizens, there exists the possibility of acquiring the property via a Croatian company. An Agent may find acompany (e.g. d.o.o.) for the buyer for this purpose and transfer the ownership of the desired property to this company. The buyer then acquires a 100% share in the company and in this way acquires all the rights to the property.