Let's talk real estate Croatia! Love Croatia so much that you don't want to go home or want a holiday home? Well, join the club!
That is exactly what happened to me!
I only came here for 6 weeks in 2012 and I'm still here! Back then Croatia wasn't even in the E.U and process of buying property in Croatia was an MINEFIELD!
Well, I am glad to say that the tides are slowly turning and purchasing real estate in Croatia is getting a bit easier.
BUT BE WARNED: You will still have a mountain of paperwork to climb and a few hoops to jump through.
The biggest but of advice I can give you right now is to get the local property professionals on board from the start and throughout the entire process.
It will save you time, headaches and plenty of sleepless nights!
Buying Property in Croatia
Buying a house in Croatia is actually one of the ways you can be granted an extended stay in Croatia.
Your nationality and the agreements between Croatia and your country will also have a decisive role in whether or not you will be allowed to buy a certain type of real estate.
In this basic guide, we talk you through the process of purchasing a house in Croatia and give you some tips on how to deal with obstacles.
The risk of fraud is high in this industry so we recommend you hire a real estate lawyer to help you avoid unpleasant situations.
Besides the risk of fraud, the purchase implies a lot of legal procedures so you better be guided by a professional through the sales process.
Real Estate Croatia: Finding a Property
Properties can be purchased on many real estate platforms. One of the most popular with the locals is Njuskulo. Here are some general steps to help guide you through the process:
Determine your budget: Before you start looking for properties, it's important to have a clear idea of your budget. This will help you narrow down your search and avoid wasting time on properties that are out of your price range.
Find a real estate agent: A local real estate agent can be a valuable resource in your search for a property in Croatia. They can help you find properties that meet your criteria, provide guidance on the buying process, and negotiate on your behalf.
Choose your location: Croatia has many beautiful coastal areas, as well as inland regions. Consider the type of property you want (e.g. apartment, house, land), and then choose the location that best suits your needs.
Conduct due diligence: It's important to conduct thorough due diligence on any property you are interested in buying. This may include a survey, title search, and inspection.
Make an offer: Once you have found a property you want to buy, you will need to make an offer to the seller. Your real estate agent can help you with this process.
Sign a sales contract: If your offer is accepted, you will need to sign a sales contract. This document will outline the terms of the sale, including the price, payment schedule, and any contingencies.
Finalize the sale: The final step in buying a property in Croatia is to complete the sale. This will typically involve transferring funds to the seller and registering the property with the local land registry office.
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Real Estate Croatia: The Next Steps
Once you have found a house or an apartment that meets your requirements, here are the next steps you need to follow:
1. Check the property's records
Before you contact the seller, make sure to look up the property records.
Getting familiar with them will make you a hard nut to crack for scammers and help the negotiations flow more easily.
The information you want to check includes:
- Size of the house
- Purpose of the property
- Name of the person(s) who holds the property
- Owner's OIB (personal identification number)
- Registration address of the owner
- Burdens or rights the property is subject to
2. Check how the property is zoned
Another important information you want to know is how the real estate is zoned. A property can be zoned as agricultural or residential.
Foreigners are not allowed to purchase agricultural land, unless they are the owner of a Croatia-based company.
Even if they do own a Croatian company, it's still a long way to go until they are finally given the right to purchase agricultural land.
As I said before, you are best off hiring a lawyer to assist you through the process.
To find out how the real estate you are interested in is zoned, you should send a request to the state department for construction and physical planning.
Here is their website which is available in English too. If you are not a Croatia citizen and the property you are looking for is zoned as residential, you should request a certificate confirming this.
3. Prepare the contract
The buyer is the one who prepares the sales contract being assisted by their laywer. Besides the terms of the purchase, the contract usually includes a deposit, called kapara, which is generally 10%.
If the buyer doesn't meet their obligations, they lose the deposit and the house. If the seller doesn't hold up to their end, they have to pay the purchaser double the deposit.
You also need to notarize the contract in two copies - one for each signing party.
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4. Ask for consent from the Ministry of Justice to buy the property
Before you seal the deal for purchasing the real estate, you must request the official permission from the Ministry of Justice.
If you are an EU/EEA citizen, you don't need permission. As they get your request, the Ministry will check whether your country or state (if you are from Canada or USA) has reciprocity agreements with Croatia.
If such an agreement exists, you will be allowed to purchase a house in Croatia. The request to the Ministry of Justice should include:
- Certificate from the state department for construction and physical planning
- Notarized copy of the sales contract
- Certificate proving that the seller is also the owner of the house
- Buyer's passport (notarized)
- Copy of the buyer's Croatia residence ID
- Power of attorney of a Croatia resident who will receive mail in your name (in case you don't have a registered address in this country)
The ministry will analyze your request and come up with a response within 60 days. This service costs around 5 Euros.
Sometimes you will have to wait for longer. If you receive a negative response, you won't be able to buy the property.
5. Pay the remaining price
When you receive the permission from the ministry, you can pay the remaining 90% of the property price. EU citizens and permanent residents can apply for mortgage. The banks request permission from the Minister of Justice to give someone financing in buying a house. The lender will also carry out their own evaluation of the buyer.
They will assess your financial situation, ask for income statements and evaluate the value of the house you intend to buy.
If you are not very much linked to Croatia, you are likely to be denied mortgage assistance. For example, the bank won't give you financing if your source of income doesn't come from within Croatia and if you don't have a permanent residence in Croatia.
6. Register the purchase
Once the deal is signed, you have 60 days to register the purchase with the land registry authority. The service costs 35 Euro approx.
If you register later than 60 days after the purchase, you will have to pay 130 Euro approx.
When filing the request for registration, you should provide the following:
- Notarized sales contract
- Certificate from the department for construction and physical planning
- Permission to buy granted by the Ministry of Justice
- Citizenship of the purchaser
- Power of attorney for a Croatia citizen who will get the mail on your behalf
The land registry will assess your package of documents and eventually come up with a denial or an approval of the house purchase registration.
Keep in mind that even the smallest mistake, such as a wrong letter or digit, can be a reason for the authority to deny your purchase. That's why, take your time to check the documents and make sure that all information is 100% accurate.
7. Request a copy of the ownership certificate
Once you get approved as the new owner, request a copy of the ownership certificate. This will cost you 5 Euro approx.
After the certificate arrives, get to the next step which is switching the utility bills to your name.
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Real Estate Croatia: Summary
I told you it was a bit of a process didn't I?
Those are the basics but please do not think that it is a simple process.
The bureaucracy and paperwork in Croatia is complex and time consuming and we HIGHLY suggest you employ professionals and experts in real estate to navigate this for you.
Yes, it can be a little stressful but, at the end of the process, you will have your very own piece of Adriatic property you can call home.
Just be patient and try not to drink too much Rakija if things get tootough!