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Real estate taxes in The Republic of Croatia

According to the VAT law during purchase of newly constructed real estates land is separately taxed at the rate of 5%, while VAT for construction value of the facility is 25% of real estate production cost.

Real estate tax for real estates built before 2005 are taxed according to the unique tax rate of 5% of total arranged real estate price, no matter what the real estate or business transaction is.

  • Turnover tax for buying or selling land is 5%.
  • During real estate swap, each owner pays 5% for his own real estate.
  • Buyer always bears the real estate tax in whole.

Tax for the seller, when he is selling the real estate

Real estate seller must pay income tax only when he sells the real estate within three years of purchase and at a price higher than the price he purchased it. Then he is obliged to pay tax in the amount of 35% of the price difference plus enlarged by additional tax, amount of which depends in what region of Croatia the tax payer lives or is headquartered.

Real estate lease tax

In cases when a legal entity leases a real estate to another legal entity or a person VAT must be paid (25%) and at the end of the year, income tax in the amount of 20% of total generated profit must be paid.

When a person leases a real estate tax, basis in calculated in a way that flat rate expenses are deducted from the rent amount. If such tax basis is less than 2.400 HRK per month, it is taxed at the income tax rate of 20% plus additional tax and if it is higher, at the rate of 35% plus additional tax.

Deadline for real estate tax payment

Buyer must, after signing the purchase contract, report the purchase to the appropriate tax department within 30 days counting from the day the contract was signed. Buyer is also obliged to pay the tax within 15 days after tax department issued its decision. If the tax is not paid, the tax department charges interest for each day of deadline overrun.

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