Zagreb
Buy house or flat in Zagreb
Housing Market
Flats or apartments in shared buildings comprise the majority of housing in the center of Zagreb. Freestanding houses are more common in the surrounding neighborhoods and the suburbs. The price of a flat in the center may depend on location, condition, and the age of the building and any furnishings, and generally ranges between 1,500 and 2,500 euro per square meter. Pricing for detached houses is comparable.
Prices are generally stated in euro, although you may be required to pay in kunas.
Expats Buying Real Estate
There are currently two options for foreign nationals who wish to buy property in Croatia: you can purchase as a private owner or as a company.
Private Owner
In February 2009, nationals from the European Union were granted the same property buying rights as Croatian citizens.
Foreign nationals who are not EU citizens but whose country has a reciprocal property purchase agreement with Croatia may also buy property, but only after gaining approval from the Croatian Ministry of Justice.
This process may take up to six months, but you can take possession of the property in the meantime. Once you gain approval, the court will authorize your contract and you will receive the title deeds.
Company
The other option is to set up a company that will purchase the property. The process takes about two weeks and involves your lawyer, a notary public, and the commercial court to approve. The practice was fairly commonplace until recently: laws now require aliens who are self-employed in their own company to invest 200,000 kunas and hire three Croatian nationals.
Purchasing property by starting a company may be an appropriate course of action if the property is intended for commercial use, either for renting or as a developer. In this case, you could reclaim some of the VAT.
Keep in mind that owning property in Croatia does not automatically allow foreign nationals to stay in Croatia without a visa. Those wishing to stay longer than 90 days must apply for a temporary stay visa. Refer to the "Visa" section for more information.
How to Search for Real Estate
Online Listing
The best way to start your search for property is to browse online listings. Both classifieds websites and real estate agencies list available properties online. Popular classifieds sites include:
Keep in mind that these most of these listings will be in Croatian.
You can also check the Croatia classifieds on EasyExpat and chat with other expats on the Croatia forum or network and receive advice.
Newspapers
Newspapers are generally not a popular source for listing real estate. Instead, try the classifieds sites listed above.
Public Postings
There are often public bulletin boards in cafes and near university buildings. Though these are generally dedicated to advertising goods, services, and events, occasionally you might find real estate listings.
Estate Agent
Because it is often complex for a foreign national to buy property in Croatia (see "Expats Buying Real Estate" above) many future homeowners choose to work with a real estate agency that will assist them with every step of the process, from the initial search to closing day.
A real estate agent will not only help you select a suitable property, but will also advise you in the best course of action for purchasing your future home, help you collect all necessary documents, and arrange meetings with lawyers and accountants.
Another good reason to work with an agency is to ensure that your new property has a clean title - that is, the seller has the legal authority to sell it. In part because of Croatia's complex history, many homes have changed hands a number of times, and legal ownership is now ambiguous at best. Generally, real estate agencies only list properties that have clean titles.
Some real estate agencies include:
- Zagreb West
- Adriatic Property Services
- Hillberg
- Kastel
- Metropola
- First Property Croatia
- Croatia Property Sales (Specializes in real estate in Dalmatia)
Making an Offer
If you are working with an agent, he or she will extend your offer to the seller on your behalf. The seller may decline it, decline it with a counter offer they would be prepared to accept, or simply accept it.
If the offer is accepted, the agent will prepare a pre-sale contract outlining the details of the property, the buyer, and the seller, as well as the final date of purchase. An accompanying 10 % deposit secures the property.
Contracts
The agent will draw up a final purchase contract to be signed by the seller and the buyer in the presence of a public notary on the date of purchase established in the pre-contract. The buyer then pays the outstanding balance.
It is wise to have your lawyer read the contract before you sign it. A lawyer will determine that the property has a clean title and will also verify that the seller has paid all outstanding debts or taxes owed on the real estate.
Payment
Before signing the final purchase contract, make sure that you have sufficient funds available in Croatia. This may require the opening of a Croatian bank account, if you don't have one already. If you are working with a real estate agency, they will help you with this process.
Though prices are generally quoted in euro, you may be required to pay in kuna.
Mortgage
Financing for foreign nationals is not common, however, this is slowly changing. Erste Bank, for example, now offers housing loans of up to 250,000 euro to foreigners.
Required documents for the application include:
- Photocopies of ID cards or passport with registered residence in the Republic of Croatia, i.e. passport for non-residents
- Tax number (OIB) certificate
- Completed Loan Application form for all loan participants whose credit standing has been assessed.
- A signed statement for processing of personal data
- A signed Statement approving collection and processing data from HROK's credit report for all loan participants whose credit standing has been assessed
- Original last three payroll or pension slips (or a certified copy)
- Employer's confirmation regarding the employment status and monthly income of the loan applicant
- Original excerpt from the land registry, not older than 30 days from the date of issue
- Property value assessment, unless it is a newly constructed property
- Insurance policy for mortgaged property
- Residential homebuyers should provide a sales contract notarized by a public notary.
For more information, visit Erste Bank's Croatian website.
Fees
In addition to the Real Estate Tax (RET) of 5%, you will have several other fees to consider:
- Value Added Tax (VAT) is 25%
- Legal fees, on average, are 1.5% + VAT
- The Croatian Real Estate Transfer Tax (RETT) is 5%.
- Real estate agent fees can vary, but average 3% + VAT
Closing
After the final purchase contract has been agreed upon, both the seller and the buyer sign the contract in the presence of a public notary, who oversees the final transfer of the property into the buyer's name. The lawyer will then register the property with the local land registry department. Shortly after this, the buyer should receive the deed and the keys to the property.
The lawyer will also register the purchase agreement with the local tax authority within 30 days. Payment of the RETT is due within 15 days of receiving the amount due from the tax office.
Auction
The practice of auctioning property is fairly new in Croatia, with the first property auction firm, Aukcija nekretnina, established in 2009. Aukcija nekretnina is still the largest company specializing in property auctions in Croatia.
After browsing online listings and deciding on a property, you must register, obligation-free, with Aukcija nekretnina. You are then invited to inspect the property and have your lawyer check into all legal matters. You should also prepare your finances before the auction.
On auction day you will need to register as a bidder with the auction organizers. You will then receive a registration number that will allow you to actively participate and bid at the auction. In order to register, you will need:
- Photo ID card or a passport
- 'OIB' (Croatian Tax Reference Number, if applicable)
- Your lawyer's details
- Notarized Power of attorney, if you are bidding on behalf of someone else
- Completed and signed Registration Form for bidders/buyers
- Obligatory confirmation of payment method to cover deposit, legal fees and agents commission
Interested buyers would do well to attend the auction themselves, however, you may also authorize someone else to bid on your behalf through a notarized Power of Attorney.
Immediately after the auction, the buyer is expected to pay 10% of the purchase price as well as a 2.5% agent' commission, which goes to the auctioneer. The buyer should be prepared to pay for the property and all taxes within 30 of days of the auction.
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