What are the additional costs when buying real estate in Croatia?

In addition to the price of real estate in Croatia, which is determined by the seller, the buyer should be aware that there are potentially other costs waiting for him when buying an apartment or house that must be paid when buying real estate in Croatia. Usually, these costs vary from 5-8%, and depend on several factors.
Real estate transfer tax in Croatia is almost certainly an additional cost unless you are buying a newly built property. Most vacation property buyers use the services of real estate agents, as they usually do not live in the location where the property is located and do not know the area. Mediation service charged by agencies is 3% + VAT.
To check the entire documentation of the real estate, clients can hire a lawyer and/or notary public who define the prices of their services freely. However, it is a common practice that lawyers usually charge for their services in the amount of 1% + VAT of the real estate value. The standard costs of a notary public are not as high as in most European countries, considering that in Croatia it is usual for a notary public to only certify the signature of the party, and not the entire content of the real estate purchase agreement. More about each cost when buying and selling real estate in Croatia below.

Property transfer tax in Croatia is 3% or 0%

Real estate sales tax in Croatia amounts to 3% and is paid by the acquirer of real estate - the buyer, regardless of whether he is a Croatian or a foreign citizen. The buyer does not have to report the sale to the tax office as it used to be, but the notary public does it at the time of certification of the sales contract.
In practice, the tax administration sends the decision on the determination of real estate sales tax to the customer's home address with the exact amount and information for payment, usually 15-30 days after the date of certification of the sales contract. The real estate sales tax must be paid within 15 days from the date of receipt of the Decision on determining the real estate sales tax.
Real estate sold by a company (or less often a person) that is subject to value-added tax (VAT) is taxed with VAT. In this case, there is no real estate sales tax of 3%, because VAT of 25% is already included in the purchase price. If the buyer will use the purchased real estate for commercial purposes (e.g. tourist rental), it is possible to refund the VAT.
 

Agency commission for the purchase of an apartment or house

The usual agency commission for buying an apartment or house in Croatia is 3% + VAT. The agency commission is contracted with the real estate agency on the basis of an intermediary contract that is concluded when viewing the properties. The buyer undertakes to pay the brokerage commission in the event that the purchase is realized by the Brokerage Agreement that he signs with the real estate agency. In the event that the client does not buy the property presented to him, he is not obliged to pay the agency a brokerage commission.
 
Attorney's fees
Legal services, i.e. the services of a lawyer, usually amount to 1% + VAT. Depending on the complexity and duration of the work, the amount may be lower or higher. The lawyer checks the entire status of the real estate, as well as the documentation related to the real estate. The basic documentation that is checked is an extract from the land register (ownership certificate), building and use permit (if it is a building), energy certificate, and location information (for land ).
If it is necessary to fulfil some conditions before concluding the main sales contract, the lawyer draws up the preliminary contract for the sale of real estate, and if everything is ready for the entire sale, the lawyer immediately drafts the main sales contract after checking the documentation.
If you are buying real estate with the help of a real estate agency in Croatia before you decide to hire your own lawyer to check the documentation and manage the legal process of the sale, check whether the engaged agency has its own lawyer. In this case, the agency will provide you with the help of its lawyer and draw up a Preliminary Purchase Agreement / Purchase Agreement. This means that, in that case, they would not have to pay their own lawyer's fees in the usual amount of 1% + VAT. You can read more information about the buying and selling process here.
 
Notary public costs when buying an apartment or a house in Croatia and court fees
In a standard sales process in which the parties' signatures are verified, the costs of a notary when buying an apartment or house, as well as the costs of court fees for pre-registration and registration of the owner's rights, rarely exceed the amount of approx. 200 EUR. In the event that the parties agree on a process that includes the deposit of money or documents with a notary, the price is determined before the process itself, depending on the amount of the purchase price and the period of deposit. The dates and exact costs of the entire process conducted by a notary public are usually agreed upon and paid for by the party that requested such a process.
The above applies to the purchase of real estate in Croatia with ready funds. In case you want to finance the purchase of real estate with a bank loan, you will have additional costs. In addition to the real estate appraisal by an authorized real estate appraiser and the costs of loan approval, you will also have to count on the mandatory cost of real estate insurance and the costs of solemnizing the contract with a notary public. The cost of formalizing the contract largely depends on the price of the property, from approx. 300 EUR and more .
 

Other additional costs of buying real estate in Croatia

If you are a foreign citizen and do not have a Croatian personal identification number (OIB), you could have the cost of obtaining that number in case you do not want to obtain it yourself at the competent tax administration. Also, if you want to read contracts and documentation in your own language, you can count on translation costs that depend on the length of the text. The costs of translating standard pre-contracts and real estate sales contracts in practice do not exceed EUR 300.
 

How can you calculate additional costs when buying property in Croatia?

In order to make it easier for you to imagine what the calculation of the costs of buying and selling real estate looks like in practice, we have prepared two examples of calculations for you. One of them is an example that lists the costs of buying a house in Opatija from a person, and another that lists the costs of buying an apartment in a new building in Rovinj.

CALCULATION OF THE COST OF BUYING AND SELLING REAL ESTATE IN CROATIA - EXAMPLE OF A HOUSE IN OPATIJA (seller is a person)
PRICE OF THE PROPERTY: EUR 940,000
REAL ESTATE SALES TAX 3% : EUR 28,200
AGENCY INTERMEDIARY COMMISSION 3% + VAT = 3.75%: EUR 35,250
LAWYER'S FEES APPROXIMATELY 1% + VAT (NOT MANDATORY): EUR 11,750
NOTARY PUBLIC AND COURT FEES : 200 EUR
TOTAL COSTS = EUR 75,400
TOTAL INVESTMENT = EUR 1,015,400

CALCULATION OF THE COST OF BUYING AND SALE OF REAL ESTATE IN CROATIA - EXAMPLE AN APARTMENT IN A NEW BUILDING IN ROVINJ (seller is a company)
PRICE OF THE PROPERTY including VAT: EUR 620,000
AGENCY INTERMEDIARY COMMISSION 3% + VAT = 3.75%: EUR 23,250
LAWYER'S FEES APPROXIMATELY 1% + VAT (NOT MANDATORY): EUR 7,750
NOTARY PUBLIC AND COURT FEES : 200 EUR
TOTAL COSTS = 3 1,200 EUR
TOTAL INVESTMENT = 651.2 00 EUR

As we have already stated earlier, the mentioned additional costs when buying a house in Croatia can vary from sale to sale, depending on the tax status, the complexity of the process itself, and the possible need to resolve some documentation and thus ensure a safe purchase.
For all additional information and clarifications regarding additional costs when buying real estate in Croatia, contact us at [email protected] or +385994440660.