Buying or Selling a Real Estate in Croatia - Expenses Overview

Igor Katušić,  Tuesday, 19 November 2013


This article is part of a series of 8 articles about buying property in Croatia. The other articles in the series cover the following topics:

As with everything else; the price of the real estate itself is not the only expense you’ll have during the entire process. Those expenses vary depending of your citizenship status; the region (county) in which the real estate is; the micro location of the real estate (in capital or some other large Croatian city center), and finally the choice you make when it comes to lawyers and real estate agency.

Same applies vice versa also, hence in a case where you are selling the property. But, let’s start with the buying process as this is primary step for you to become an owner of a Croatian property.

Costs Associated with a Real Estate Buying Process

Of course, the prime role in the entire process has the price of the real estate and that is something you will be familiar with in a very moment you make your final decision. It’s pointless to discuss it any further in here for it is an unknown part of the equation for now.
That said, we can move to those paddy expenses that are mostly disregarded but when summed up make a great impact on the overall cost of the project.

For a starter, you would like to consider a lawyer to be a part of the process. Even so this isn’t something obligatory for you; it is a wise thing to do, because you never know what lies ahead of you – you don’t know the seller or the property you are buying.
Lawyer -- specialized for the real estate transfer’s legal matters -- will check and create all relative documents regarding the purchase process. In general, lawyer’s expenses range between 1 % and 2 % of the property’s (deal’s) value so it’s easy for you to calculate the possible expenses. It might seem a lot, but if you do things wrong, thus fail to check the regularity of the provided documents – you are in a serious risk of losing substantial amount of money by trying to close a deal that will eventually be marked as invalid or non-applicable.

Your first step is to target the desired property of course, after what you’ll head to a Land Registry Office and get a hold of a Land Registry Entry for that particular estate. This will cost you 20 KN in a form of public duty stamps that can be acquired in every post office or a local Financial Agency office. Remember its location for you’ll be heading there again in near future.
Next, you’ll make a down payment – an escrow payment. This goes anywhere between 5 % to 10 % of the property’s end price and it’s entirely depending of your agreement with the seller.
Notary office’s expenses come next. Everything has to be pre-checked, approved and verified by the official Notary. Your contract can be made personally, thus without participation of a lawyer, but it has to be verified by the Notary; otherwise it’s invalid and non-applicable.
Generally, Notary office expenses are about 1.5 % of the contract’s value so it’s easy to calculate these costs within everything else to make the final sum which you’ll spend in a process.

Finally there is a specific set of costs if you’re non-EU citizen but eligible to buy the property in Croatia due to the fact that your country has signed the Mutual Reciprocity Agreement with Republic of Croatia.
If this is the case, and in order for you to claim the rights for the purchased real estate, you’ll have to pay the administrative fees in total of 150 KN with the addition of 20 KN for any missing document which would has to be replaced during the right acquisition process between you and Ministry of Justice of Croatia.
Up to 100 KN can be payed in a form of the public duty stamps; while higher amounts must be payed via money order in favor of the State’s Budget.
As there are no legislative that determines the way of how the real estate agencies charging their fees, or even the amount of it - it is thus possible that your chosen real estate agency charge you with the certain fee and in practice that fee is around 3 %. Common practice is for the seller to pay the agency’s fee.

Costs Associated with a Real Estate Selling Process

As a foreign resident in a role of a seller you would have to pay real estate agency’s fees if you are selling your property using their services. In practice, those fees leverage at 3 % of the total deal value and are deducted during the payment process itself.
In Croatia, seller is the party in a legal matter that is paying the agency’s fees, if not agreed otherwise.
Now, if you are about to sell your real estate within the 3-years period from the moment you bought that property, and are about to make an additional profit, you’ll have to pay the tax on a difference between the value of the property at the date you bought it, and the selling value – thus the profit. That tax is 25 %.
As we explained already, the selling value is determined by the current market trends and not by the price within the contract.

This covers all of the expenses associated with the buying and selling process of a real estate in Croatia.  

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x Choosing a good real estate agent can make all the difference in the process of buying a suitable real estate in Croatia. How do you start with your search for the right one and what are the key elements which will point you in the right direction? The methodical approach to this issue, explained in this article, will help you to make the best possible choice. 
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