Finding and buying a property in Croatia, for anyone who does not speak the language fluently, and without the services of an estate agent, would be almost impossible. These days, Croatian agents are perfectly accustomed to being called on their mobiles, so if they are not in, its more than likely that they will have left a message with the number on their office or shop door.
As in all property transactions, the purchaser must use the services of a lawyer who acts solely for him. It is also essential that the lawyer should speak both Croat and English fluently.
It is important for the lawyer to check that the propertys title is clean. Because Croatian families used always to hand properties down from father to son for several generations, in some cases the paperwork is either incorrect or non-existent.
Getting a survey done is somewhat unusual in Croatia, but it can be arranged through surveyors located in the bigger towns.
In the case of a foreign national buying as a private individual, permission to purchase must be sought from the Ministry of Foreign Affairs. If a foreign national has registered a company in Croatia and is buying through that company, permission is not necessary.
The stages of the purchase include:
1.)The reservation contract
2.)The preliminary contract. This will include the payment of a deposit, usually of between 5 and 10 per cent of the purchase price. It is usual for the contract to include a clause stating that should the vendor withdraw the property from sale, he must pay an equivalent sum to the purchaser
3.)The certifying of the contract by a notary
4.)The submission of the documents to the Land Registry for the recording of the legal title
5.)The payment of Real Estate Purchase Tax and/or VAT (known as PDV in Croatia)
Costs
Estate agents charge between 2.5 and 3 per cent of the propertys sale price.Lawyers will charge around 1.5 per cent. This will usually include the Land Registry search and the preparation of the purchase contract. Permission from the Ministry of Foreign Affairs for a foreign national to acquire property costs around 70 kuna (approximately 6.50 pounds).The notarys fee and that of the translator (officially required) total approximately 500 kuna (around 50 pounds).The fee charged by the Land Registrar is about 400 kuna (approximately 38 pounds). Check with your lawyer whether this has been included in his or her fee. Property transfer tax is currently set at 5 per cent. This is paid by the buyer. Once the transaction has been completed, the change of ownership should be registered within 30 days. The tax can be paid by money transfer, and is then changed into kuna.
VAT (PDV in Croatia) is currently 22 per cent and payable only on the value of a newly constructed building or a resale for which the VAT was already paid, if disposed of by a business VAT payer. It is also charged on the services provided by both estate agents and legal advisers.
Mortgages
At present, the situation relating to mortgages on Croatian property is changing, with some UK-based companies now able to offer them. The main criterion appears to be that the potential purchaser must set up a company that is registered in Croatia.
Of course, for UK buyers who already have a mortgage, it is perfectly possible to add to it. This will be linked to UK rates, which differ from overseas ones.
Overseas mortgages generally attract higher set-up costs, typically around 3 per cent. Following this route will not add an additional burden to an existing UK mortgage. It is essential to note, however, that there is an exchange risk attached to basing repayments on a foreign mortgage from UK income. It is also essential to ensure that the overseas mortgage documentation complies with both local and UK law. Above all, it is important, as in all overseas property transactions, to take professional advice.
Euro mortgages
Many lenders have been inundated with enquiries from people seeking a mortgage to buy property in Croatia, and some are now offering mortgages averaging 60 per cent based in euros. Generally, these are linked to terms of 15 years and provide for completion at a maximum age of 65. Agricultural land is not eligible for a mortgage.
Its worth noting that the mortgage will most likely be only for the purchase of the property. Any additional costs or overheads, such as notarys fees, agents commission or completion fees, will have to be met by the buyer separately.
Croatia Property For Sale
Which region of Croatia to purchase property in?
Istria
Easy and inexpensive access, including by public transport from Italy. Istria is often called "the Croatian Tuscany" - there are lovely historic coastal towns (Porec, Rovinj, Pula) whilst the interior is very picturesque. The climate includes warm summers and cooler winters. Property is quite expensive due to high demand and Istria's proximity to the rest of Europe.
Kvarner Riviera
The main town is Rijeka, which has an airport on the nearby island of Krk and also has reasonable access from Zagreb (bus/train journey is just over 3 hours). Lovely coastal resorts include Crikvenica (one of the Croatians' favourites), Kraljevica and Novi Vinodolski. The climate is warm in the summer but some winter days can get quite cold. Bargains are hard to find as this area is close to the Croatian interior and therefore popular with many Croats.
Nothern Dalmatia
Some lovely historic towns (Zadar, Sibenik, Trogir) with small coastal resorts between them. Warm in the summer with mild winters, although some strong winds occasionally. Some bargains to be had, particularly in the smaller towns!
Southern Dalmatia
The main town is Split, with good transport links by ferry to the Italian port of Ancona. Rather long journey times if travelling to/from Zagreb by bus or train. The Makarska Riviera and the ancient town of Dubrovnik are amongst the most attractive places, although both these locations are quite expensive to buy property, especially due to the popularity of Dubrovnik. Very warm summers and mild winters.
The Islands
There are thousands of them - just take your pick, although only about 60 are inhabited. On the other hand, if you are really determined, you could splash out and purchase a whole Croatian island of your very own!
Inland Croatia
Zagreb, as the capital, is where property can get very expensive, although it is, of course, still cheaper than comparative property in other European countries. Many smaller towns in Northern Croatia, in which property is very cheap, are close to Austria and Hungary and might be suitable for those wanting the quiet life.
Advice on purchasing Croatia Property
If you decide to purchase a property you will need a proof of citizenship: your passport has then to be notarised in Croatia.
Legal Fees and Taxes
The property transfer tax in Croatia is currently 5 will be levied just on the cost of the land.
If the property is older, the 5% will be on the entire property value.
Mortagages
At the present time, mortgages are not available to foreigners in Croatia secured on property in Croatia.
The Contract
On the assigned day of completion, the buyer and seller (or their authorized representatives) will be presented at the office of the Notary (Javni Biljeznik) to sign the title deed (Ugovor or Kupoprodaji Nekretnine).
The Croatian Notary does not check any terms when buying property in Croatia, but certifies that both parties have agreed to the terms stated, (the Notary is in place to witness both parties' signatures). At that stage your agent will prepare a copy of your contract and all other (see below the list of documents needed) necessary documents to be sent to the Ministry of Foreign Affairs of Croatia.
A clause in the contract allows you to take advantage of your property with immediate effect while you wait for the paperwork
When acquiring a property in Croatia, foreign citizens need to obtain the approval of the Ministry of Foreign Affairs of the Republic of Croatia.
This is a formality that requires 12 to 18 months to complete.
Applications are not refused unless the individual has an adverse history with relation to Croatia.
In Croatia the ultimate proof of ownership is entry of the owners name in the local Land Registry (Zemljisne Knjige) on that specific property.
The local courts will not allow a foreign citizen to be entered in the Land Registry without the MFA approval.
Here is a list of the documents, which have to be supplied to the MFA when requesting an approval to purchase property in Croatia: The sales contract;
An excerpt from the land registry for the particular property (In Croatian ZK izvadak). This document is usually obtained in each municipality (Opcina) at the local municipal court (Opcinski Sud); it's land registry division (Gruntovni Odjel);
A document from the local municipality (Opcina), from the following department: "Ured za prostorno planiranje". The document is called "Uvjerenje o namjeni", for the particular property;
Proof of citizenship for both buyer and seller (photocopy of passport); any photocopies have to be notarised by a Croatian Notary Public.
When buying property in Croatia, a clause in the contract safeguards your finances, protects your rights and allows you to take advantage of your property with immediate effect while you wait for the paperwork.
Once the approval arrives from the Ministry of Foreign Affairs of Croatia your agent will fax it to the local Land Registry and confirm you as a new owner, then the final step is to pay the tax for your new property in the Taxation Office.
These guidelines are meant for guidance only and describe a straightforward purchase scenarios. However this information is not meant to replace proper legal advice, which we always insist you take.
Both Leo Fogarty & Anthony Riley are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Leo Fogarty has sinced written about articles on various topics from Property Guide, Banking and Portugal Holiday. Leo Fogarty is Managing Director of portals www.Overseas-Property.ie and .co.uk . He has worked in the overseas property industry for companies suc. Leo Fogarty's top article generates over 18100 views. to your Favourites.
Anthony Riley has sinced written about articles on various topics from Home Remodeling Ideas, Property Guide and Real Estate. Anthony Riley is a consultant to . Anthony Riley's top article generates over 18100 views. to your Favourites.
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