TAXES & FEES ON PROPERTY PURCHASE

Before reading this page, we refer clients to Buying Procedure

There are 2 possible taxes imposed on property purchase in Croatia, VAT or Sales Tax.

All property built after Jan 1st 1998 is subject to VAT at 22%.

For property built prior to 1998, a sales tax of 5% is applied to the sale price.

It is possible that Sales Tax of 5% will be applied to the land and VAT at 22% to the value of the building.

In the case where property is purchased via a Croatian Company, in theory the VAT can be reclaimed, but unless the property is going to be used commercially or let, it is not practical to register for VAT as this implies that the company will be trading.

TAXES ON SALE OF PROPERTY

When a property is sold, there are two taxes which may be applied: Capital Gains Tax (CGT) if sold by an individual or Corporation Tax (CT) if sold by a Company.

Recently the CGT rate has been reduced to match the CT rate, i.e. 20%.

CGT is only applicable to properties sold within 3 years of purchase; CT is applied annually to company profits, which take into account normal trading factors.

AGENT'S FEES

In Croatia, the Vendor and buyer share the selling agent's fees; a buyer will be asked to pay 4% (+VAT) of the sale price to the agent.

In addition, there are legal fees of approximately 3% (+VAT).

These taxes are valid as of 4th March 2005, but may change in the future.