The main issue with buying property in Croatia is to establish
whether the property has a "clean" title. The property market in Croatia has
only really existed in its current form for the last 10 years. Prior to that
time records were not as rigorously kept as they are now. Properties would be handed
down from generation to generation and as a result a particular property could well
have ended up being co-owned by several members of the same family. In some cases it
could be difficult and time consuming to trace all the co-owners.
When buying a property in Croatia, it is imperative that the
precise ownership of the property being purchased is established as soon as possible.
It is important to verify that the seller is indeed the owner entitled to sell that
property, and that the property complies with all building regulations.
The diagram below provides a simplied outline
of the buying process and the typical costs involved. You may wish
to also refer to our Property
Buying FAQ's page for more information and clarification.
As this is a simplified and generalised version
of the buying process, do please contact us
for more detailed information based on your circumstances.
Step 1: Offer Acceptance
Vendor accepts buyers offer
Step 2: Goodwill Deposit
Buyer deposits refundable "Goodwill Deposit" with Croatian Villas For
Sale usually amounting to 3% of proposed property purchase price
Funds deposited & held in UK client account
Step 3: Initial Searches
Solicitor engaged to carry out property searches in order to verify that the
property title is clean & undisputed. Preparation of pre-contract and contract
Searches OK?
YES
NO
Goodwill Deposit returned to buyer
Buyer chooses to proceed with purchase?
YES
Goodwill Deposit retund at pre-contract signing
NO
Buyer forfeits Goodwill Deposit
Step 4: Private or Company Ownership?
Private Ownership
Company Ownership
There can be some advantages to creating a Croatian Limited Liability company that
will own the property
Fees for this typically =
Legal: €2000
Company operating capital deposit = €3000
Step 5: Pre-Contract
The pre-contract defines the terms of the final contract (deposit, payment terms,
settlement date)
Fees payable typically =
Property Deposit: 10%
Croatian Villas For Sale Part-Fee: 1.5%
Legal Fees: 1%
Should the buyer NOT proceed with the purchase past this point, the buyer
forfeits the full Property Deposit, Part-Fees & Legal Fees
Should the vendor NOT proceed with the sale past this point, the vendor
refunds the buyer double the Property Deposit
Step 6: Contract
The contract is the final binding document.
Settlement results in full payment of the final purchase price less deposit paid.
Also payable is the balance of Croatian Villas For Sale fees of 1.5% + Legal
Disbursements approx €200
Step 7: Ministry of Justice (MoJ) approval required?
YES
for non-EU citizens if
private ownership route taken
The MoJ verifies that the buyer is a citizen of an approved country & that the
property to be purchased is of an approved type (eg, not farmland, forests,
etc)
NO
for EU citizens or if
company ownership route taken
Step 8: Land Registration
Registration of ownership with the Land Registry
Step 9: Real Estate Transfer Tax (RETT)
Similar to UK Stamp Duty, 5% RETT is payable to the authorities
Any improvements made to the property prior to MoJ approval (Step 7) will result
in RETT being applied to the property valuation after the improvements
LEGAL OWNERSHIP
Final costs typically 109% of purchase price + Legal Disbursements
(excluding Company set-up costs if that route is taken - see Step 4)
