Your guide to buying property in Croatia

Real estate market situation

The Croatian real estate market has shown significant growth in recent years, with the average price of newly built apartments in 2023 at around €2,246 per square metre. Prices have risen by more than 60% over the last five years and are set to increase by a further 12% in 2023. At the same time, the number of transactions has fallen by 30% nationally and by 25% in Zagreb, mainly due to deteriorating availability and tight supply.

Why choose Croatia?

With its picturesque coastline, medieval towns and vibrant cultural life, Croatia can be a dream holiday destination for many. The climate is Mediterranean and rarely drops below freezing in winter, making it an ideal choice for either permanent residence or holiday. Historic cities such as Dubrovnik and Split, and beautiful islands such as Brač and Hvar, offer excellent opportunities for property buyers, whether it's for bustling city life or a quiet, natural setting.

Reasons for price trends

Property prices are driven by a number of factors: there are few new residential developments, many apartments are being converted for short-term tourist rentals and around 25% of properties are unoccupied. The introduction of the euro and the growing interest of foreign investors have also contributed to the price rises, as a significant proportion of transactions are carried out by foreign buyers. EU-funded infrastructure developments are also boosting demand, while construction capacity is stretched, limiting the delivery of new projects.

Real estate buying process in Croatia

Buying a property consists of several steps. It is important to check the property's registration, as there may be encumbered properties for sale. EU citizens can buy property under the same conditions as Croats, while non-EU citizens need to obtain a permit from the Ministry of Justice, which can take up to months. The sale requires a prior contract, notarisation and usually a 10% deposit, which is doubled if the seller fails to fulfil the contract.

Fees related to the purchase of real estate

When buying a property in Croatia, there are a number of additional costs and fees on top of the purchase price. One of these is the notary and registration fee, which is usually 0.01-0.05% of the contract value of the property. In addition, the cost of official translations can be estimated at around €200-300, including the translation of the contract. The real estate agent's fee is 3% of the contract value plus VAT, while the lawyer's fee is usually 1% of the contract value plus VAT. The real estate transfer tax is 3% of the value of the property as estimated by the tax office.

It is important to note that if you buy a property from a developer who is subject to VAT, you may be exempt from the property transfer tax. However, if the property was let for two years before the purchase, the buyer will again be liable to pay the 3% levy. These costs do not include any additional inspections, such as technical inspections of the building or the preparation of business plans. The exact costs may vary depending on the type of property, its location and the details of the transaction, so it is advisable to do your research and seek expert advice before buying.

Rental market and credit facilities

The rental market in Zagreb is constantly growing, driven by tourism, young workers and student demand. Landlords often prefer short-term rentals, which further narrows the supply of long-term rental apartments. The Croatian credit market is stable, with low indebtedness levels and a favourable average mortgage interest rate of 3.3%. For foreigners, access to credit can be more difficult, but it is worth looking in your own country for financing options.

Life in Croatia

Croatia attracts property buyers not only for its natural beauty and cultural heritage, but also for its excellent healthcare and education systems and relatively low cost of living. The country is an ideal choice for those seeking a Mediterranean lifestyle and for those who value a safe, friendly environment.