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How to rent out a house or apartment in Croatia to long-term tenants: Guide for 2023

Austro Hungarian building in Rijeka, Croatia
Apartment building in Rijeka, Croatia

PUBLISHED: 09/10/2022

Many people come to Croatia with the idea that they will buy a property and rent it out to tourists. It’s not as easy as it appears.

If you are an EU/EEA citizen or their family member, or have the right to work freely, then you can rent out accommodation once you register it.

However, if you are a third-country national without the right to work freely, it’s a lot more complicated and, quite possibly, cost-prohibitive.

A great alternative is renting out to a long-term renter. Anyone can rent out to a long-term renter without a special permit or the right to work.

Many cities in Croatia have a long-term housing shortage precisely because of the oversaturation of tourist accommodation. Renting out to a long-term renter would help curb that shortage as well as provide stable income, unaffected by tourism, wars, and pandemics.

This post will be valuable to anyone considering renting a property out long term. We gathered the essentials about the rental contract, your rights and obligations, as well as taxes.

If you want to rent out accommodation to tourists, find out all you need in this post. If you are on the other side and looking for a house or apartment to rent in Croatia, this post is for you.

In this post, we cover:

The facts are these…

How to rent a property you own to long-term tenants in Croatia

How to prepare a property for rent?

Before publishing a rental ad, take all the necessary steps to prepare the apartment for long-term rent.

The apartment should be clean and representative, so you should:

  • Remove excess personal stuff
  • Thoroughly clean the apartment
  • Paint the walls
  • Repair the furniture
  • Remove moisture

What should the property include?

It is unusual for a property to be rented out to a long-term tenant unfurnished. Usually, rentals in Croatia are fully furnished.

There is not a strict list of what should be provided, but these are the items that are typically included in a long-term rental:

  • All furniture, including beds, mattresses, couch, tables, chairs
  • Television
  • Air conditioning unit
  • Washing machine
  • A full set of dishes, utensils, and dishes
  • Pots and pans
  • A set of linens and pillows for each bed
  • Lights and lamps
  • Vacuum cleaner
  • Laundry drying rack
  • Storage cupboards

Since it is common to furnish, it’s safe to assume that your tenant will not come with their own furnishings.

Once you hand over the apartment to your brand-new tenants, you should inform them about the basics of how to use the devices and appliances. You can leave them instruction manuals for the washing machine, air conditioner, dishwasher, and other devices.

Unfurnished properties are usually at the higher end of rent.

Insurance of the property

You certainly want to be sure that your rented apartment or house will be in good hands. In addition to finding responsible tenants, another way to protect your house from unexpected occurrences is insurance. You never know what can happen.

Some of the most common insurances are the ones against:

  • Fire
  • Explosion
  • Lightning strike
  • Aircraft crash
  • Storm
  • Hail
  • Landslides
  • Property liability
  • Glass breakage
  • Burglary
  • Robbery
  • Earthquakes
  • Other disasters

Where to publish rental ads?

A decent rental ad should contain the following information on the apartment:

  • Rental price
  • Square footage
  • Orientation
  • Number of rooms
  • Equipment
  • Neighborhood
  • Parking spaces
  • Quality photos.

The fastest way to find tenants is by publishing a rental ad online on Njuškalo or another site. Alternative ways to publish rental ads are available here.

You may hire a real estate agency if you do not have time to deal with the rental process. However, their fees are not negligible, and you may not get the chance to meet all the potential tenants.

Basics about rental contracts in Croatia

The rental contract is concluded in written form with only one person. It may eventually be concluded with both spouses/partners.

What should be in a rental contract

The rental contract should include:

  • Contracting parties
  • Description of the apartment or the rented part
  • Amount of rent and payment method
  • Other costs and payment methods
  • Information about people who will use the apartment together with the lessee
  • Duration of the lease
  • Provisions on apartment maintenance
  • Provisions on the use of common rooms, parts of the building, devices, and the land
  • Provisions on the handover of the apartment.

An example of a rental agreement is available here.

A rental contract usually defines the landlord’s right to a monthly inspection of the apartment. However, the landlord should not enter the apartment without notifying the tenants.

Once the contract is concluded, the landlord must deliver a signed rental contract to the Tax Administration according to the address of the apartment. This is most easily done by having the contract notarized by a public notary.

[Read: How to get something notarized]

If renting to a foreigner, they will insist on this anyways because MUP requires it for address registration.

A list of all Tax Administration offices in Croatia is available here.

The Tax Administration will then deliver a tax solution with the monthly tax you must pay. The tax is calculated based on the amount of rent. You must pay the tax before the last day of the month for the current month. Learn more about taxes in this section.

Change of facts in rental contracts

Landlords must deliver the document on the occurrence or change of facts related to the rental and lease of a property or movables to the Tax Administration within 8 days. They must contact the Tax Administration according to their address.

A list of all Tax Administration offices in Croatia is available here.

If the notary public has certified the taxpayer’s signature on the document or has confirmed (solemnized) or written document in the form of a notary deed, they must deliver a digital example to the Tax Administration within 30 days. In this case, the landlord does not have to deliver the document to the Tax Administration.

Termination of the rental contract

A landlord has the right to terminate the rental contract if:

  • Tenant does not pay the rent and other related costs within an agreed period
  • Tenant subleases an apartment or a part of the apartment without the permission of the landlord
  • Tenant or other users of the apartment interfere with other tenants or users of the building and disable peaceful use of the apartment or business premises
  • Another person who is not specified in the lease agreement uses an apartment for more than 30 days without the permission of the landlord (a spouse, descendant, or parent do not count)
  • Tenant or other users of the apartment use a whole apartment or a part of it for other purposes instead of housing

Before they terminate the rental contract, a landlord must send a written notice to a tenant. They must inform them that they are obliged to remove the reasons for cancellation within 30 days. Otherwise, their contract will be canceled.

A contract must be terminated in written form. Tenants must move out within 3 months from the first day of the following month safety they received a notice.

A landlord also has the right to terminate the rental contract if:

  • Tenants or other users of the apartment cause damage to common areas, devices, and parts of the building through their own fault, and they didn’t eliminate it within 30 days
  • Tenants are remodeling the apartment, common rooms, and devices of the building without the prior written consent of the landlord

In the two cases mentioned above, a rental contract must be terminated in written form. It must include an explanation and the deadline for moving out of the apartment. The deadline for moving cannot be shorter than 15 days.

Tenants have the right to cancel a rental agreement that is concluded for an indefinite period of time. However, they must inform the landlord at least 3 months before the day they intend to move out of the apartment.

What are the landlord’s rights and responsibilities?

According to the rental contract, the landlord must keep the apartment in a habitable (decent) condition. They must maintain the apartment and make the necessary repairs on time at their own expense.

If a tenant has managed the repairs, a landlord must pay for repair costs regardless of why the tenant has taken care of the situation. They may not want to wait for the landlord to repair, or repairs were not done in a reasonable period.

Sometimes, a landlord has the right to terminate the rental contract without adhering to the notice period. This is possible if a tenant does not pay the rent twice in a row. However, a rental contract remains valid if tenants pay rent before the landlord notifies them about the cancellation.

If a tenant has acted contrary to the contract or the Zakon o najmu stanova (Law on the apartment rental), a landlord can terminate a rental contract without a written warning. The law on apartment rental is available here.

A property owner must give the energy certificate or a copy of an energy certificate to a tenant, a lessee, or a lessee of the property/building.

What are the tenant’s rights and responsibilities?

A tenant has the right to use the building’s common areas, parts, and devices that are necessary for using the apartment. They can also use land that belongs to the building, i.e., that serves the building.

Tenants must protect the apartment from damage and be careful in its use. If they want to make alterations to the apartment, common areas, or devices, they must send a prior written notice to the landlord.

If something has to be repaired in the apartment or common parts of the building, tenants must notify the landlord. The landlord is obliged to cover the repair costs.

If a tenant causes any damage to the apartment, they will be responsible according to the Law. They are obliged to pay the rent within the deadlines that are defined in a rental contract.

Do tenants have to register their addresses?

The answer is yes. Tenants must register their addresses at the police station closest to the apartment, and the landlord has nothing to do with it. The landlord is only obliged to deliver the contract to the Tax Administration and pay monthly taxes.

If you rent the apartment for less than a year, tenants must register their new address as temporary address. To register the address, they must visit MUP with their rental contract. A temporary address is called boravište in Croatian.

[Read: How to find administrative police stations in Croatia]

If the rental agreement is concluded for a period longer than a year, tenants who are Croatian nationals must register a permanent address. It is called prebivalište in Croatian.

Learn all about prebivalište and boravište in our guide which is available here.

Learn how to register or change your address with the Croatian police in our guide available here.

Who has to pay the utilities in Croatia?

There is no exact rule on who must pay the utilities for the rented apartment, and this depends on the deal between the landlord and tenants. It is most common for the invoices to come to the address in the landlord’s name, and then the tenants pay them.

If this is the case and you are a landlord, you can open user accounts on HEP and GPZ pages to track consumption. This way, you can follow the consumption of electricity and gas, previous payments, and meter statuses.

You can open a user account on the HEP pages here and the GPZ pages here.

If you prefer to control costs and be sure that everything is paid on time, you can pay the utilities instead of the tenants. In this case, you should send them bills so they can make additional payments for the utilities to your bank account.

[Read: How to set up utilities for a property in Croatia]

The exceptions are the internet and phone, which are set up by the tenants.

Another thing you can add to the rental contract is an apartment cleaning service which can be included in the total amount of rent. The monthly cost is around 200 kuna.

Which taxes must a landlord pay?

Landlords may be obliged to pay several taxes listed in the following sections.

#1 Property income tax

Porez na dohodak od imovine (property income tax) is paid on the amount of rent reduced by 30% of expenses at the rate of 10%.

Property income tax from self-employment is paid on property income determined from the business books and records as the difference between the business receipts and expenditures at rates of 20% and 30%.

Property income tax is paid on property income exempt from value-added tax (PDV) according to the Zakon o porezu na dodanu vrijednost if total receipts in a tax period are higher than the amount prescribed for mandatory entry into the value-added tax system.

[Read: PDV (Value Added Tax) in Croatia]

#2 Surtax on income tax

Prirez porezu na dohodak (surtax on income tax) is paid on the amount of income tax when the landlord has a permanent residence (prebivalište) or temporary residence (boravište) in the municipality or city that prescribed the surtax on income tax.

#3 Profit tax

Porez na dobit (profit tax) is paid if the Tax Administration has approved the payment of profit tax instead of income tax. It is paid at the rate of 18% or 10% on profit, which is determined according to the provisions of the Zakon o porezu na dobit (Profit tax act).

#4 Compulsory contributions

Compulsory contributions are paid according to Zakon o doprinosima if the property income tax is determined in the manner prescribed for independent activities.

[Read: All the taxes you might pay in Croatia]

If you are interested in buying a property in Croatia, check out this guide. And then, if you own more than one property, you may eventually rent one.

View our other property articles


Sources:
Najam nekretnine by e-Građani
Najmodavac stambenog prostora by Tax Administration
Zakon o najmu stanova
Kako iznajmiti stan by Uniqua
Vodič za bezbrižno iznajmljivanje stana by Stanolovke

Please note: All information provided by Expat in Croatia is only for the purposes of guidance. It does not constitute legal or financial advice in any form. It is important to understand that Croatian laws and bureaucratic rules often change and each personal case is individual and different rules may apply. For legal advice, you must consult with a licensed Croatian lawyer. For financial advice, you must consult with a licensed Croatian tax advisor or accountant. We can recommend one if you contact us.

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