Investing in Croatian Real Estate: An Expat’s Guide

Published on November 4, 2025 and written by Cyril Jarnias

Investing in Croatian real estate represents a unique opportunity for expatriates seeking to diversify their portfolio while enjoying stunning coastal landscapes and an enviable Mediterranean climate.

With prices still relatively affordable compared to other European destinations, the Croatian market offers numerous possibilities, ranging from modern apartments in Zagreb to charming stone villas on the Dalmatian islands.

Furthermore, recent infrastructure development and tourism growth have made Croatia a sought-after destination, ensuring attractive potential profitability for rental investments.

However, to effectively navigate regulations and take advantage of available tax benefits, it’s essential to thoroughly understand the legal and economic framework of this growing nation.

Understanding the Legal Framework for Real Estate Investment in Croatia

Legal Framework for Real Estate Investment in Croatia

Laws Governing Expatriate Purchases and Restrictions

• EU/EEA citizens can acquire most residential and commercial properties in Croatia under the same conditions as Croatians, but cannot purchase agricultural or forest land.
• Non-EU nationals must obtain prior approval from the Ministry of Justice, subject to the reciprocity principle: a Croatian citizen must be able to purchase real estate in the buyer’s home country under similar conditions.
• Foreign companies can acquire real estate, often without restrictions, but consulting a local attorney for the procedure is recommended.
• Certain property categories (agricultural, forest) are subject to stricter restrictions for foreigners, except when acquired through a Croatian company.

Nationality / Status	Purchase Procedure	Main Restrictions
EU/EEA Citizens	Simplified procedure	No purchase of agricultural or forest land
Third-Country Citizens (non-EU)	Ministry approval required	Reciprocity agreement mandatory
Foreign Companies	Purchase via local company possible	Different procedure, advice required

Legal Steps for Property Purchase

1. Eligibility verification (references to nationality and reciprocity agreements)
2. Obtaining approval from the Ministry of Justice for non-EU citizens (if necessary)
3. Signing a preliminary contract and paying a deposit (typically 10%)
4. Verifying the property’s legal status: consult the land registry to ensure the property is free of debts or encumbrances
5. Signing the sales deed before a notary public (mandatory)
6. Registering the property with the Croatian land registry to formalize the transfer
7. Paying the real estate transaction tax (see below)

Tax Obligations and Legal Fees

• Property transfer tax: 3% of the property value, payable by the buyer
• Notary fees: variable depending on property value and transaction complexity
• Attorney fees (recommended but not mandatory)
• Land registry registration fees
• Opening a local bank account recommended to facilitate transactions

Legal Protections for Buyers

• Obligation to verify that the seller is the registered owner and that the property is free of any debt or mortgage
• Croatian legislation requires all property transfers to be registered in the land registry, ensuring legal security for the purchaser
• Mandatory involvement of a notary public to authenticate the transaction and prevent fraud

Bilateral Agreements and Their Impact on the Purchase Process

• The reciprocity principle applies to non-EU nationals: Croatia must have an agreement in effect with the buyer’s home country
• List of countries with which Croatia applies reciprocity available from the Ministry of Justice
• For U.S. citizens, reciprocity depends on the state of origin and must be verified case by case
• Citizens of countries without reciprocity agreements must establish a Croatian company to invest

Administrative Procedures for Property Purchase as an Expatriate

Legal Framework and Restrictions for Foreign Property Purchase in Croatia

EU/EEA citizens enjoy nearly identical access to Croatians for purchasing residential real estate (apartments, houses, buildable land), except for agricultural and forest land, which remain inaccessible for direct purchase.

Non-EU/EEA citizens must:

• Obtain prior approval from the Croatian Ministry of Justice.
• Verify the existence of a reciprocity agreement between Croatia and their home country.
• Respect the moratorium on purchasing agricultural and forest land (only exception: through a company registered in Croatia).

Property Type	EU/EEA Citizens	Non-EU/EEA Citizens
Apartments, houses	Yes	Yes, under conditions
Buildable land	Yes	Yes, under conditions
Agricultural/forest land	No	No

Legal Steps to Finalize the Purchase

1. Obtaining a Croatian tax identification number (OIB): essential for any real estate transaction.
2. Property search and selection.
3. Signing a preliminary contract (deposit of approximately 10% of the price).
4. Legal verification of the title deed by a local attorney (ownership, absence of debts, land registry registration).
5. Signing the sales contract before a notary.
6. Applying for purchase approval (for non-EU/EEA) from the Ministry of Justice.
7. Paying the balance and associated taxes.
8. Registering the property transfer with the land registry.
9. Obtaining the property certificate (vlasnički list).

Required Documents

• Passport or ID card
• OIB (Croatian tax number)
• Notarized sales contract
• Proof of payment (deposit, balance, taxes)
• Prior approval from the Ministry of Justice (for non-EU/EEA)
• Proof of citizenship/residence
• Seller’s declaration of sale
• Proof of financing (bank statement, proof of funds)

Taxes, Duties and Associated Fees

Fee or Tax	Amount or Rate
Property transfer tax	3% of the value (resale)
VAT (new constructions)	25% (included in price)
Legal fees (attorney)	1–1.5% of property price
Notary fees	€500–€1,000
Real estate agent commission	3% (shared or buyer)
Annual property tax	Low, depends on municipality
Rental income tax	Flat rate 10% + surtaxes

Additional certified translation fees may apply if documents are not in Croatian.

Practical Tips for Expatriates

• Work with a local attorney specializing in real estate law to secure the transaction and ensure document compliance.
• Systematically verify the seller’s identity and absence of debts or encumbrances on the property.
• Prefer properties already registered in the land registry to simplify property transfer.
• Open a Croatian bank account to facilitate local payments and tax management.
• Anticipate longer processing times for non-EU/EEA citizens (2 to 4 months versus 30 to 45 days for EU nationals).
• Research local tax specifics, particularly if renting out the property.

Key takeaway:
Property purchase in Croatia for expatriates is possible but highly regulated.
Professional assistance (attorney, notary, accredited agent) and thorough verification of titles and compliance are essential to avoid disputes and ensure transaction validity.

International Financing Strategies and Tax Implications for Non-Residents

Funding Sources for Expatriates Looking to Invest in Croatian Real Estate

Financing Option	Advantages	Disadvantages
Bank loan in home country	Known conditions, speed, easier management, currency stability, often lower rates	Often requires collateral on existing property in home country, access limited to creditworthy borrowers
Bank loan in Croatia	Possible for non-residents, direct access to local market	Restrictive access, high requirements (substantial down payment, stable income), sometimes higher rates, administrative complexity
International banks	May facilitate credit access for expatriates with existing international banking relationships	Often conditional on opening a local account or providing specific guarantees
Investment funds	Risk pooling, professional management, access to large-scale projects	Management fees, less direct control, variable returns
Partnerships	Risk sharing, complementary skills and capital	Legal complexity, need for solid contractual agreement
Crowdfunding	Access to projects without significant initial investment, possible diversification	Project risk, uncertain returns, sometimes less protective legal framework
Personal financing (equity)	Speed, freedom of action, no debt	Mobilization of significant liquidity, lost leverage opportunity

Advantages and Disadvantages of Main Options

• Bank loan in home country: preferred solution for most European expatriates, as it avoids local legal and banking complexities while benefiting from attractive rates and stable currency. Real estate in the home country often serves as collateral.
• Bank loan in Croatia: possible but difficult to access for non-residents. Croatian banks typically require substantial down payments and stable income. Interest rates are sometimes higher than in other EU countries.
• Investment funds and crowdfunding: suitable for investors wanting to diversify their portfolio without directly managing a property. However, control is limited and project-specific risks must be assessed.
• Partnerships: useful for pooling resources and sharing risks, but require robust contractual structure and trust between partners.
• Personal financing: used by investors with available liquidity, which simplifies acquisition but limits ability to invest in multiple projects simultaneously.

Tax Implications for Non-Residents in Croatia

Operation	Croatian Tax Regime
Purchase	Real estate acquisition tax: 3% of purchase price, payable after property registration
Ownership	No annual property tax for primary residence. For secondary residences: municipal tax of €0.50 to €2/m²/year depending on municipality
Rental income	Taxable in Croatia. Mandatory declaration, variable rates depending on chosen tax regime
Sale	Capital gains taxable if property sold less than 2 years after purchase (except for exceptions). Possible exemption if property held more than 2 years and not rented during this period

– No inheritance tax for children and spouses in direct line.

Bilateral Tax Treaties

• Croatia has signed tax treaties with many European and non-European countries to avoid double taxation.
• These treaties determine which country has the right to tax income (e.g., rents and capital gains) from real estate located in Croatia.
• Under most treaties, primary taxation of real estate income occurs in the country where the property is located (here, Croatia). The expatriate’s country of tax residence may also tax this income, but must grant a tax credit or exemption to avoid double taxation.

Practical Tips for Tax Optimization

• Research the specific tax treaty between Croatia and your country of tax residence to anticipate taxation on rental income and capital gains.
• Maintain precise tax records and keep all acquisition, expense, and income documentation.
• Consider holding the property through an appropriate structure (personal or corporate) based on wealth and tax strategy.
• Include notary, registration, and local tax fees in the real estate investment profitability calculation.
• Always consult a tax advisor specializing in international taxation to optimize the holding structure and income declaration, and to anticipate any regulatory changes.

Important: International real estate taxation is complex. Assistance from a professional mastering both Croatian legislation and the expatriate’s country of residence is essential to avoid costly errors and secure the investment.