When buying a Real Estate, especially in a foreign country (and especially in Croatia), you should have all your boxes checked before you sign. Here are six crucial steps you must consider when (and before) buying a Real Estate in Croatia.
FIRST, if you are an EU/EEA citizen / legal entity, then there are no obstacles for you to purchase a Real Estate in Croatia. However, if you are a “third country” citizen / legal entity (meaning that you are not an EU/EEA resident), then your ability to acquire ownership title on a Real Estate in Croatia is dependent on the basis of reciprocity between the Republic of Croatia and your country. Luckily, the Republic of Croatia has reciprocity agreements with a number of non-EU/EEA countries.
SECOND, you should first decide if you will buy the Real Estate as a physical person (directly) or, as a lot of our clients do, first incorporate a Croatian company and then buy the Real Estate on the name of the newly incorporated company (usually an LLC - limited liability company).
THIRD, an expert should perform a due diligence of the Real Estate you intend on buying. Without it, you risk a dispute and a litigation before a Croatian court, which might last for years until it is finally settled.
FOURTH, and assuming the due diligence did not find any red flags, you should obtain a Croatian Personal Identification Number (PIN) from the Tax Administration.
Only after first four steps, you can move to the FIFTH step and start negotiating with the seller and drafting the Real Estate Sale and Purchase (Pre)Agreement.
If and when you agree on the wording of the Real Estate Sale and Purchase (Pre)Agreement, your SIXTH step is to contact a Notary Public in Croatia, share the drafts and schedule a signing conference. During the signing conference, the seller’s signature must be notarized by the Notary Public, who will then – depending on the agreement wording – file the request for title registration in the Land Registry.
Also, the Notary Public will then notify the Tax Administration, which will then, usually within three months, send you a Tax Resolution requesting you to pay Real Estate Transfer Tax in the amount of 3% of the purchase price (in some cases, you will pay the VAT of 25%).
Vukelić Law Office is not only specialised in real estate law but our founder, Luka Vukelić is a certified Real Estate Agent and in the 2021 EMEA edition of a leading international legal directory, The Legal 500, was recommended and categorized as a "Key Lawyer” in the Real Estate and Construction Practice Area.
If you need an experienced Croatian Real Estate Attorney, feel free to contact us at info@vukelic-law.eu