04.10.2024

Buying real estate at KrK as a foreigner: What you need to know



Buying a property on the Croatian coast can be a great investment for foreign nationals, whether they are looking for a second home, a seaside holiday or a rental opportunity. However, there are specific legal and tax aspects to consider. Here is what you need to know if you are a foreign buyer interested in real estate on the Croatian coast.
 

Legal framework for foreign citizens

Foreign citizens from the European Union have the same rights as Croatian citizens when buying real estate, except for agricultural land. Citizens from countries outside the EU can buy real estate, but with additional legal restrictions. In this case, it is necessary to obtain the consent of the Ministry of Justice, provided that there is reciprocity between Croatia and the buyer's country, which means that Croatian citizens can buy real estate in that country under equal conditions.
 

Purchase procedure

The process of buying real estate includes several key steps:
  1. Find a property and agree the terms of purchase.
  2. Check the land registry status of the property to make sure the property is clear and free of encumbrances.
  3. Signing a pre-contract, usually with an advance payment of 10% of the property's value.
  4. Signing of the main purchase agreement and transfer of ownership.
Foreign nationals are recommended to hire a lawyer to help them with the legal process, as the documentation must be properly managed and submitted to the land registry.
 

Taxes and expenses

The purchase of real estate in Croatia is subject to real estate sales tax, which amounts to 3% of the estimated value of the real estate. In addition, the costs of legal services, notary public and fees for registration in the land register should also be included.

If you plan to use the property for tourist rental, you will have to register this activity and pay tax on rental income, depending on the amount of earnings.
 

Property maintenance and management

As a foreign owner, it is important to plan how your property will be maintained while you are away. Many foreign owners hire property management agencies that can take care of maintenance, paying bills and organizing tourist rentals. Investing in good maintenance is important to preserve the property's value in the long term.
 

Investment potential

The Croatian coast, and especially islands like Krk, are extremely popular among tourists, which means that buying real estate can be a profitable investment. Locations by the sea and near tourist attractions have great potential for renting, especially during the summer months. It is good to research which locations are most desirable and in line with your plans, whether you are looking for a property for personal use or as an investment.
 

Bank accounts and financing

If you are planning to buy real estate in Croatia, you may need to open a bank account in a Croatian bank for easier payment of taxes, utilities and other expenses. Also, some foreign citizens can take advantage of the possibility of obtaining mortgage loans in Croatian banks, under certain conditions.

Buying an offshore property as a foreign national can be an exciting and profitable move, but it requires careful planning and an understanding of the legal aspects. With good preparation and expert advice, this process can result in a valuable investment in Croatian coastal real estate.

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