All costs when buying real estate in Croatia

Real estate costs in Croatia
Image by Partha Narasimhan

When buying a new property in Croatia, there is a lot to think about and consider. The sales price of the property is usually at the top of that list, but there are a lot of other costs involved as well. These costs may or may not be similar to what you are used to in your home country.

Aside from the price of the property itself, there are some other costs that are not as obvious, especially to foreigners relocating to Croatia.

To be clear, there are the costs of purchasing real estate in Croatia, and there are costs of owning real estate in Croatia. In this post, we cover all possible costs associated with buying a property.

These costs include:

Let’s get movin’…

#1 Cost of the property itself

The biggest cost that you will have when buying a property is the cost of the property itself. The cost of a property in Croatia depends on various factors.

These factors include:

  • Current state of the real estate market
  • Time of year
  • City/place where the property is located
  • Exact location of the property, i.e. neighborhood
  • Proximity to the city center
  • Proximity to the sea
  • Floor on which the property is located
  • Age of the property
  • Whether it is a house or apartment
  • Size of the property
  • Whether the property is furnished or not
  • Amenities
  • Condition of the property
  • Quality of the building
  • Whether the building has an elevator or not
  • Whether the property has a garage or parking spaces
  • Lot size of the property

There are a few ways to determine the average prices of properties according to your needs. First, you can contact a real estate agency. They can inform you of the realistic price for a property according to your requirements. If you’d like a vetted recommendation, contact us using the below form.

The second method is to poke around on Njuškalo.hr to see the types of properties that are currently available. These prices can be a little less reliable as they have been known to be a little higher than what the owners will actually take (in some cases). Njuškalo is the biggest Croatian advertising web site. View our English guide to Njuškalo here.

For the latest average property prices in Croatia’s biggest cities along with a guide on how far your money will go, check out our post here.

#2 Down payment

If you plan to get a mortgage in Croatia, it is important to understand how much a bank may fund for the purchase. Most Croatian banks will only fund 75% of the cost of the property. This means you will need to pay 25% of the property cost in cash or funded in some other way, which serves as a down payment.

If you are a foreigner, there are restrictions to getting mortgages in Croatia. You can learn about getting a mortgage loan here.

#3 Deposit

When buying a property, signing a pre-contract between a seller and a buyer is common and recommended. In addition to defining key information about the property, this pre-contract also defines the amount of the deposit called “kapara”.

The deposit secures the property, but also can act as a type of severance pay. If the buyer backs out of the purchase or doesn’t meet the pre-contract terms, they will lose this deposit with no chance of refund. If the seller backs out or violates the pre-contract terms, they must pay double the amount of the deposit to the buyer. The usual amount of the deposit is 10% of the property sales price.

This deposit is part of the 25% of the property cost you would need to pay in cash.

#4 Real estate agency fees

Hiring a real estate agency can be helpful as they know the area, can negotiate with the owner on your behalf and take care of the bulk of the buying process. This can make buying a property faster and easier.

Many agencies charge a fee only to the seller of the property, meaning the buyers are exempt from paying agency fees. However, other agencies charge this agency fee to the buyer.

When hiring an agency, fees will usually vary between 2% to 4% of the agreed property purchase price. PDV (Croatia’s VAT) of 25% will also be charged on top of this agency fee. Agencies usually define a minimum fee, which can also vary. For example, for some agencies, the lowest fee is 2.500€ and 4.000€ for others.

Agencies define their terms, conditions, and fees in their mediation agreements which are determined between the agency and the buyer. Fees will usually be charged after signing the purchase pre-contract or contract.

Make sure you know what a real estate agency charges before formally engaging with them. If you’d like to be connected with an expat-vetted real estate agency, contact us using the below form.

#5 Lawyer fees

Using a lawyer is absolutely critical when purchasing a property. There are so many ways a buyer can get screwed over in Croatia when it comes to property, and it can take years, sometimes decades to resolve in court. This is a risk for all buyers, not just foreign buyers. Anything to do with property in Croatia should be taken very seriously.

Lawyer services may include:

  • Checking the ownership of a property
  • Researching a property to see if the title is clean
  • Cleaning a title
  • Checking the legality of a property and sale
  • Writing a purchase pre-contract
  • Writing a purchase contract
  • Submitting the request to the Ministry of Justice (for purchases by foreigners)
  • Submitting the request to the land registry office for change of ownership

To get an idea of what the process looks like for buying real estate, check out our detailed guide here.

The fees that a lawyer may charge for their services when buying a property can vary. Some charge a flat rate for specific services and some charge a certain percentage of the property. Those that charge based on a percentage usually always have a minimum fee. If the lawyer is in the PDV system, they will charge 25% PDV on top of any service fee.

When talking about bigger transactions, sometimes it is more cost effective to hire a lawyer who charges by the hour. However, it all depends on the individual case.

It is good to know that some real estate agencies cover the lawyer’s fees using their agent fee. That is usually the case when the legal work is done in-house. So, if the agency has an in-house lawyer, the cost will usually be included into the agency fee.

Many real estate agencies have trusted lawyers that they work with regularly. If you are purchasing a property without an agency or you’d rather just have someone not connected to the agency you are using, we can connect you to a vetted property lawyer who can assist you with your purchase or sale. To request a referral, contact us here.

#6 Evaluation of the property

Evaluation of the property (procjena vrijednosti nekretnine) is a service that is usually performed by the bank when requesting a housing loan. This service will ensure that the property for which the loan is approved is more valuable than the amount of the loan itself.

Most Croatian banks will perform this service free of charge. However, if they ask you to pay for this service, the approximate price will vary. A typical price for evaluation of a property up to 90 square meters is 1.300 kuna.

#7 Fees at notary public

When buying a property, you can’t avoid fees from the notary public regardless of whether you are using a housing loan or not. During the buying process, you will need a purchase contract at a minimum, but best is to have both a pre-contract and a full purchase contract.

A purchase pre-contract must be verified by a notary public. By verifying it, the authenticity of the contract is confirmed.

Multiple copies of the purchase contracts must be printed and verified. You’ll need a copy for the:

  • Seller
  • Buyer
  • Notary public
  • Ministry of Justice (if you are a foreigner)
  • Land registry department of the municipality court
  • Tax administration
  • Bank (if you are using a loan)

The price of verifying the original contract is ~40 kuna. The price of verifying each copy of the contract is ~20 kuna.

When you use a housing loan

When using a housing loan from banks to purchase real estate in Croatia, there is one additional cost.

In addition to the verification of the purchase pre-contract and purchase contract, the loan contract must go through a procedure called “solemnizacija” (solemnization). This is also done by the notary public. It includes verification of the contract and clarification of all legal consequences of the contracted work.

Solemnization of the contract is a complex procedure, so the price is higher than the verification price. The price depends on the amount of the loan.

Below are some examples and approximate prices:

  • Loan amount of 120.000 kuna – ~700 kuna
  • Loan amount of 50.000 € – 2.000 kuna
  • Loan amount of 100.000 € – 4.000 kuna
  • Loan amount of 150.000 € – 5.000 kuna

Additional costs that may appear when taking a loan from the bank are signing a promissory note and verification of the seizure statement. The bank will ask you to verify these at the notary public. These costs can’t be avoided if you are buying a property using a mortgage loan from a bank in Croatia.

View our guide to the biggest banks and their services in Croatia here.

When you don’t use a loan

If you are not obtaining a bank loan in Croatia, you do not have to go through the solemnization step. You will still have to obtain notarized copies of your contracts per the list at the beginning of this section.

#8 Official court translator

Any non-Croatian citizen must have an official court translator present at the notary public. This is a legal requirement to ensure you understand what you are signing.

They will go through all of the documents with you and explain what they say in your native language. This cost can vary a little, but is usually about 1.500 to 2.500 kuna.

#9 Property transfer tax

Whenever a property transfers ownership, the new owner must pay a property transfer tax called “porez na promet nekretnina” if the seller already didn’t pay PDV on the property. This is mandatory for all property owners regardless of how the property was acquired (purchase, inheritance, etc.). The tax rate is 3% of the market value of the property at the time of its acquisition.

Sellers who are registered to the PDV register must pay PDV in only two scenarios:

  • They sell, give or transfer an ownership on building lands
  • They sell, give or transfer an ownership on buildings or their parts and the land on which they were built if these buildings or their parts were inhabited or used for less than 2 years

However, some groups are exempt from the property transfer tax.

These are:

  • Protected tenants who buy residential buildings or apartments in which they live on the basis of a rental contract
  • Citizens who buy residential buildings or apartments (including land) on which they had occupancy rights or with the consent of the occupancy right holder according to regulations that define selling of apartments that have occupancy rights. The same applies to protected tenants who buy residential buildings or apartments in which they live on the basis of a rental contract

Property transfer tax incurred after January 1, 2017 must be reported by:

  • Notary public
  • Court
  • Competent public legal bodies

After verifying the purchase contract at the notary public, the notary will send the contract to the Tax administration (Porezna uprava). Porezna uprava will then bring a temporary solution or a permanent solution (called a “Rješenje o utvrđivanju poreza na promet nekretnina”) on the property transfer tax.

If you received a permanent solution (“Rješenje o utvrđivanju poreza na promet nekretnina”) and paid the tax, you are safe. However, if you received a temporary solution, the tax administration has the right to recalculate the tax during the next 6 years if they conclude that this is necessary. They may determine that the purchase price deviated from the market value of the property at the time of the purchase, hence, the tax amount must be adjusted.

Sometimes the property transfer tax isn’t reported according to the market value of the property. People usually report lower amounts. In this scenario, Porezna uprava will evaluate the property in the next 6 years after delivering a temporary solution to determine its true market value. After confirming the real market value, they will send a permanent solution to the owner. The owner will then have to pay for the tax difference.

If the owner is exempt from paying the property tax, they won’t receive a solution on the exemption.

The deadline for paying the property transfer tax is 15 days after the solution was received. An appeal won’t delay the execution of a temporary or permanent solution.

Furthermore, if the purchase contract wasn’t verified by a notary public, this doesn’t mean that the property transfer tax doesn’t have to be paid. Cases like this must be reported to the Porezna uprava office nearest to the location of the property. The deadline is 30 days after the contract was signed.

#10 Renovation costs

When you decide to buy a property, you may already know that you want to renovate it to suit your tastes. On the other hand, some properties in Croatia need a full renovation. Some properties are stone ruins, in which case they basically need to be rebuilt from the ground up.

If you are not familiar with the construction and renovation industry in Croatia, we will give you the headlines. This topic warrants its own novel on its own, which we will chip away at bit by bit.

When you want to renovate or rebuild, there will be permits, material costs and labor costs. Whatever you think it might cost, triple it. Whatever time you think it might take, triple it.

All this must be taken into consideration if you are planning to buy something that needs work, regardless of what work that may be.

#11 Moving costs

If you’ve just landed in Croatia and do not have many things, then perhaps you can just rent a car and move over your things piecemeal. However, if you have a life here already or you’ve imported your belongings overseas, a moving company is probably a better option.

Moving costs vary depending on the moving company and the city in which you are moving. If you hire a 3-hour moving service that includes 4 workers who will help with the moving and a truck size up to 36 cubic meters, the approximate cost will be 1.600 kuna.

If you need boxes, tape and other packing material, those can usually be obtained by moving company and delivered to your address in advance. The approximate cost of one box is 15 to 18 kuna. You can avoid this cost if you ask your supermarket or local shops for empty boxes.

Conclusion

Be sure to take all of these costs into account when searching for real estate to buy in Croatia. In a future post, we will address the costs associated with owning a property in Croatia.

Need help buying real estate in Croatia?

If you need help finding and purchasing a property, we can help! We have carefully vetted a network of real estate agents and lawyers who can help you buy real estate in Croatia with confidence.

They can:

  • Answer all of your property questions
  • Find property records
  • Clean property titles
  • Help you find the right property
  • Help you purchase a property and represent you during the process
  • Ensure you are not taken advantage of by property sellers
  • Prepare and review contracts
  • Help you sell a property
  • Engage local contractors and interior designers

To get help from a vetted real estate agent, please share your needs with us using the below form. Based on those needs, we’ll match you with the right person best suited to help.

Sources:
https://gov.hr/moja-uprava/financije-i-porezi/porezi-i-prijava-poreza/porez-na-promet-nekretnina/427
https://www.jutarnji.hr/vijesti/hrvatska/skrivene-naknade-kupnja-stana-i-selidba-znace-jos-30-000-kn-troskova-o-kojima-niste-ni-sanjali-15023112
https://www.rightpropertycroatia.com/hr/troskovi-kupnje-nekretnine-u-hrvatskoj/
https://www.firstpropertycroatia.com/hr/kupnja/troskovi-kupnje-nekretnine-u-hrvatskoj/
https://www.moj-bankar.hr/Vijesti/Cijena-solemnizacije-kredita
https://novac.jutarnji.hr/novac/novcanik/trikovi-poreznika-koja-je-razlika-izmedu-konacnog-i-privremenog-poreznog-rjesenja-7724838

Check out our other property posts

Please note: All information provided by Expat in Croatia is only for the purposes of guidance. It does not constitute legal advice in any form. For legal advice, you must consult with a licensed Croatian lawyer. We can recommend one if you contact us.

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