Croatia – Property Taxes

What taxes and fees apply when buying a property in Croatia?

For anyone purchasing a resale property in Croatia, the dominant cost is the real estate transfer tax (porez na promet nekretnina, or PTN). This tax is levied at a flat rate of 3%, applied to whichever is greater — the declared purchase price or the assessed market value of the property. In broad terms, this is analogous to stamp duty land tax in the United Kingdom or real property transfer tax in Canada, though at 3% it sits toward the lower end of European norms.

The obligation to pay this tax rests with the buyer, and the amount is determined by reference to market value at the time of the transaction. Should the declared purchase price differ materially from the assessed market value, the tax authorities reserve the right to carry out an independent valuation and calculate the tax accordingly. It is therefore important that the notarised contract reflects a realistic and accurate price.

VAT applies in certain specific circumstances. When a newly constructed property is sold to its first purchaser, VAT is charged at the standard rate of 25% and is built into the price quoted by the developer, with the developer responsible for remitting it to the state. In such cases, the buyer is not additionally liable for the 3% real estate transfer tax. Resale properties, by contrast, are exempt from VAT and instead attract the 3% transfer tax.

Once a purchase is completed, the notary certifying the agreement is required to report the transaction to the tax authorities. In practice, a formal tax assessment is typically issued within 15–20 days of registration, and the buyer then has 15 days to settle the liability. Failure to pay within that window can result in accruing interest or enforcement action.

Notary and legal costs are an unavoidable part of any Croatian property transaction. Notary fees cover the certification of the sales contract and other documentation required to effect the transfer of ownership. Notary fee schedules in Croatia are regulated, and for a standard transaction the cost usually amounts to a few hundred euros. If a property lawyer is engaged separately — which is strongly advisable for foreign buyers — legal fees generally add a further 1–2% of the purchase price, though this varies between firms. Ownership must be entered in the land register (zemljišna knjiga), and the associated court registration fee is relatively modest — typically below €200 for a standard residential property — but current fees should be confirmed with the relevant registry. No stamp duty exists in Croatia.

Where a buyer uses a real estate agent, agency fees are typically in the range of 2–3% of the purchase price plus VAT. In Croatia it is not uncommon for the seller to bear the agent’s commission, but this arrangement should always be confirmed in writing before any mandate is signed.

Worked example — approximate transaction costs on a €200,000 resale apartment (as of 2025):

These figures are illustrative only. Always verify current fee schedules with the Croatian Tax Administration (Porezna uprava) and a locally qualified legal adviser.

What taxes and fees apply when selling a property in Croatia?

In Croatia, the real estate transfer tax is borne by the buyer rather than the seller, so sellers are not directly liable for this charge. Nevertheless, there are several costs that sellers should factor into their planning.

Where a property is sold within two years of its acquisition, the seller may become liable for capital gains tax (discussed in detail in the following section). Beyond this, the primary costs falling on a seller are estate agent commission and any legal fees incurred. Agency commission in Croatia is typically 2–3% of the sale price plus VAT at 25%, though this is negotiable. If a legal adviser is retained to draft or review the sale agreement, fees generally amount to around 0.5–1% of the sale price.

There is no separate seller-side transfer tax in Croatia. The real estate transfer tax applies to any change in ownership — whether through sale, exchange, free transfer, inheritance, company liquidation, or any other mechanism. In every such case, it is the acquiring party, not the transferring party, who bears the tax liability.

Sellers should also account for the cost of any pre-sale documentation that the buyer or their lender may require, such as energy performance certificates or confirmation of planning compliance. A locally qualified notary or property lawyer can advise on precisely which documents are needed for a given transaction.

Is capital gains tax payable on property sales in Croatia?

Croatia taxes capital gains on property disposals, but only within a defined time frame. Profits arising from the sale of real estate are subject to capital gains tax; however, gains from the disposal of a taxpayer’s principal residence are excluded. Gains from property sales are also entirely exempt where the property has been held for more than two years from the date of acquisition.

In practical terms: selling a property within two years of purchase triggers capital gains tax on any profit realised. Holding the property for longer than two years before selling means the gain is entirely tax-free. This two-year threshold represents a notably favourable position when compared with, for instance, the United Kingdom — where capital gains tax applies to all investment property gains irrespective of holding period — or Germany, where a ten-year holding period is required to achieve full exemption.

The applicable rate is 12%, levied on the difference between the sale price and the original acquisition cost, inclusive of any allowable expenses incurred in acquiring the property. Gains on the disposal of a principal residence attract no tax at all, regardless of how long the property has been owned, provided it has genuinely functioned as the seller’s primary home.

Croatian residents are taxed on their worldwide income. Non-residents are liable to Croatian tax on income arising in Croatia, meaning that non-resident sellers are subject to the same 12% capital gains tax on gains from Croatian property sold within two years. Non-residents do not face any surcharge, but equally cannot access the personal allowances available to residents.

Practical example: A buyer acquires an apartment in Split for €150,000 in January 2024 and sells it for €170,000 in September 2025 — a holding period of under two years. The taxable gain is €20,000. At 12%, the capital gains tax payable would be €2,400. Had that same property been sold in February 2026 — more than two years after purchase — no capital gains tax would arise. Always confirm the current rules with the Croatian Tax Administration or a local tax adviser, as thresholds and calculation methods may be updated.

Are there annual property taxes in Croatia?

A new annual real estate tax framework took effect in Croatia on 1 January 2025, superseding the previous tax on holiday homes. This change has material implications for owners of second properties and investment units, particularly along the Adriatic coastline.

The new tax is charged at between €0.60 and €8.00 per square metre of usable floor area, with each municipality entitled to set its own rate within that band. The resulting variation across the country is considerable. Zagreb and Rijeka, for example, have set their rates at €5.00 per square metre, while Split charges €1.99 per square metre and Osijek only €0.60 per square metre.

The tax is calculated by reference to the “usable area” of a property as defined under Croatian building regulations — meaning the internal living space, excluding walls, balconies, and shared areas within apartment buildings. It does not apply to total floor area or plot size.

A number of exemptions apply. Properties that serve as the owner’s primary residence are fully exempt, as are properties let under long-term leases exceeding ten months per year. Properties that are uninhabitable, company-owned properties held for resale for fewer than six months, and public-purpose properties owned by municipalities or the state are also excluded from the charge. The practical implication is that genuine owner-occupiers pay nothing at all under this regime.

The tax is assessed by reference to ownership as at 31 March of the relevant year. Owners are required to notify the tax authorities of any changes to their property — including changes in ownership, size, or exemption status — by that date. Failure to do so can attract fines of between €1,000 and €6,000.

Illustrative example: A holiday apartment in Split with 60m² of usable area, taxed at the local rate of €1.99/m², would give rise to an annual tax bill of approximately €119. The equivalent property in Zagreb at €5.00/m² would cost €300 per year. These sums are modest compared with recurring property levies in many other countries — in France, for instance, taxe foncière on a comparable property can easily run to several hundred or even several thousand euros annually. Always check the rate currently in force in the relevant municipality via the Croatian Tax Administration.

How is rental income from property taxed in Croatia?

Rental income from Croatian property is subject to personal income tax, and the applicable rules differ depending on whether the letting is for long-term residential purposes or short-term tourist accommodation.

Long-term residential lets: Where an owner rents out a Croatian property on a long-term basis, income tax is charged on 70% of the gross rental income received — that is, a standard 30% deduction is applied to the gross figure before tax is calculated — at a rate of 12%. This yields an effective tax rate of 8.4% on gross rental receipts. The 30% deduction is a fixed allowance representing notional expenses, available regardless of what costs the landlord has actually incurred — broadly comparable in concept to historical flat-rate expense allowances in other jurisdictions. Landlords who maintain full business accounts may instead opt to be taxed on actual net income, declared through an annual personal income tax return.

Properties let on a long-term basis for ten or more months per year may qualify for a complete exemption from the annual property tax, providing a tangible incentive for landlords who commit to sustained residential letting.

Short-term tourist rentals (e.g. Airbnb, Booking.com): Rather than paying a percentage of rental income, landlords offering short-term tourist accommodation are subject to a flat-rate tax calculated per sleeping unit, which varies by location. This per-unit charge ranges from €19.91 to €199.08, and is set locally by reference to the tourist development index (ITR) of the relevant area. This flat-rate system is fundamentally different in structure from the percentage-based tax that applies to long-term lets. It is worth noting that this flat-rate treatment applies to individuals operating on a lump-sum basis; those maintaining full business records are assessed differently.

Non-residents earning rental income from Croatian property are subject to the same tax rules as residents and must register with and meet their obligations through the Croatian Tax Administration. Where non-residents rent out property in Croatia, they may be treated as VAT-liable persons by default, in which case VAT at 25% or 13% may apply depending on the nature of the service provided. Long-term residential lets are generally exempt from VAT.

All landlords must register their rental activity with the local Tax Administration office before commencing letting. Hosts of short-term tourist accommodation must additionally obtain a registration certificate from the relevant ministry. The Croatian Tax Administration or a local tax adviser should be consulted for current registration requirements, which have been subject to revision in recent years.

Does inheritance tax apply to property in Croatia?

When property passes by way of inheritance in Croatia, two distinct taxes may potentially be engaged: inheritance and gift tax, and the real estate transfer tax. Understanding how these interact is essential for estate planning purposes.

Inheritance and gift tax applies to cash, monetary claims, securities, and movable property where the individual market value of the movable assets exceeds €6,700 at the time the tax liability arises. The tax is determined by the Tax Administration at a rate of 4% and is payable by any individual or legal entity that receives an inheritance or gift in Croatia. Certain exemptions apply.

The most significant of these exemptions concerns close family members. Under Croatian law, spouses, children, parents, and adopted relatives in the direct line of descent are generally exempt from inheritance and gift tax on property. This mirrors similar provisions found across Europe — such as the generous spousal and children’s exemptions under the French succession regime or the nil-rate bands in the United Kingdom. More distant relatives and unrelated heirs are subject to the 4% rate on the assessed value of the property received.

In addition to inheritance and gift tax, the real estate transfer tax of 3% may also be assessable when property changes hands by way of inheritance. The term “transfer” under Croatian law encompasses all forms of ownership change, including inheritance, and it is the recipient of the property who bears this liability — though certain exemptions exist. The current scope of these exemptions should be verified with the Tax Administration, as the interaction between the two taxes can be nuanced.

Croatia applies equal tax treatment to residents and non-residents. Where a non-resident inherits Croatian property, any applicable double taxation treaty between Croatia and their country of residence — Croatia has concluded such agreements with more than 65 countries — will also be taken into account in determining overall liability. Cross-border estate situations warrant specialist tax advice.

Does gift tax apply to property transfers in Croatia?

Croatia applies broadly the same tax treatment to lifetime gifts of property as it does to inheritances. Inheritance and gift tax applies to cash, monetary claims, securities, and movable property where the individual market value exceeds €6,700. The tax is assessed by the Tax Administration at the rate of 4% and is payable by any individual or legal entity receiving a gift in Croatia, subject to applicable exemptions.

As with inheritance, transfers between spouses and direct-line relatives — parents, children — are typically exempt from the 4% charge. Gifts made to more distant family members or unrelated recipients are taxed at 4% of the assessed market value of the property at the time of the gift. This is a comparatively low rate when set against gift tax regimes in other countries: in Spain, gift tax can reach 34% or more, while in France rates can exceed 45% for transfers to non-relatives.

As with any other form of property transfer, a gifted property is also potentially subject to the 3% real estate transfer tax, assessable on the recipient. This applies in addition to any inheritance and gift tax liability. The taxable base for both levies is the market value of the property at the time of the transfer. Current exemptions and any available tax reliefs should be confirmed with the Croatian Tax Administration.

Are there any tax advantages or incentives for buying property in Croatia?

Croatia introduced a number of meaningful fiscal incentives with effect from 1 January 2025, aimed principally at first-time buyers acquiring a primary residence.

First-time buyer transfer tax refund: Eligible first-time buyers purchasing their primary residence are entitled to a 100% refund of the real estate transfer tax, effectively reducing that cost to zero. For new-build purchases, first-time buyers may additionally receive a refund of up to 50% of the VAT paid. Both schemes apply to contracts and occupancy commencing from 1 January 2025. The potential savings are substantial: on a €200,000 resale purchase, the full transfer tax refund alone represents a €6,000 saving. On a €250,000 new-build apartment, a 50% VAT refund could be worth considerably more, subject to applicable size and price limits. Current eligibility criteria and applicable caps should be verified with the Tax Administration before proceeding.

Long-term rental exemption: Where a property is let under a lease contracted for a period exceeding ten months, the owner is exempt from the annual real estate tax. This represents a meaningful financial benefit for landlords shifting from short-term to long-term letting arrangements, and reflects the government’s broader policy objective of expanding long-term rental housing supply.

Primary residence exemption from annual property tax: The annual property tax does not apply to properties occupied as the owner’s main home. Owner-occupiers therefore face no recurring annual property tax liability — a significant advantage when compared with countries where such taxes are universal. In the United States, for example, property tax applies to all real estate including primary residences; in France, taxe foncière is payable by all owners.

Two-year capital gains tax exemption: As outlined earlier, property held for more than two years before sale is entirely free from capital gains tax, making medium- and long-term investment in Croatian real estate comparatively tax-efficient.

Croatia applies equal tax treatment to residents and non-residents, and where non-residents are taxed, double taxation agreements concluded with more than 65 countries are also taken into account. None of the incentives described above are restricted on the basis of nationality, meaning foreign buyers may benefit from them on the same terms as Croatian citizens.

Do different rules apply to foreign buyers or non-residents purchasing property in Croatia?

Foreign purchasers are subject to exactly the same tax rates as Croatian nationals, and first-time buyers can access the full transfer tax refund on the same basis as domestic buyers when purchasing a primary residence. Croatia does not impose any additional surcharge, premium transfer duty, or special levy on non-citizen purchasers — a feature that distinguishes it from markets such as Canada (which introduced a foreign buyer ban for residential property in 2023) or Singapore and Australia (which levy additional stamp duty on foreign purchasers).

However, the legal entitlement to purchase property in Croatia differs depending on the buyer’s nationality. EU and EEA citizens, along with nationals of countries that have bilateral reciprocity agreements with Croatia, may purchase property freely. Non-EU nationals from countries without such agreements may require advance authorisation from the Ministry of Justice before acquiring real estate — although in practice, Croatia’s EU membership has removed this barrier for the vast majority of buyers from within Europe. Current requirements should always be confirmed with the Croatian Ministry of Justice or a local lawyer, as the position regarding reciprocity agreements can change.

Agricultural land is subject to additional restrictions under both EU regulations and domestic Croatian law. Any buyer seeking to acquire agricultural land should obtain specialist legal advice before entering into any commitment.

Non-residents earning income from Croatian property — whether from rentals or from a taxable capital gain — are required to register with and report to the Croatian Tax Administration. Non-residents do not have access to the personal income tax allowances available to resident taxpayers, but the flat-rate tax treatment on property income (12% on 70% of gross rent for long-term lets) applies equally to both groups.

For buyers purchasing through a corporate structure, all business income including capital gains is subject to Croatian corporate income tax at 10% for annual revenue up to €1,000,000, or 18% for annual revenue of €1,000,000.01 or more. Some investors consider acquiring Croatian property through a Croatian d.o.o. (limited liability company), but this approach carries additional compliance obligations and should only be undertaken on the basis of professional tax advice.

How do I handle Croatia property tax obligations step by step as a buyer?

1. Engage a notary and legal adviser: All property purchases in Croatia must be notarised. A notary certifies the sale contract and, crucially, reports the transaction to the Tax Administration within 30 days.
2. Receive a tax assessment: After purchasing a property, when certifying the purchase agreement, the notary reports the purchase to the tax authorities. In practice, usually after 15–20 days from the date of registration, the tax authorities issue a decision on the amount of tax to be paid.
3. Pay the real estate transfer tax: The tax is payable within 15 days from the delivery date of the decision on the assessment of real estate transfer tax.
4. Register ownership in the land book: File the application for entry in the zemljišna knjiga (land register) at the relevant municipal court. Pay the applicable registration fee.
5. Apply for first-time buyer refund (if eligible): If you qualify for the transfer tax or VAT refund, submit your refund application to the Tax Administration with the required supporting documentation. Verify current deadlines and eligibility criteria before applying.
6. Register for annual property tax (if applicable): The annual property tax is based on the status of the property as of 31 March for the current year. It is your obligation to report any changes to the property, whether in ownership, size, or eligibility for exemption.
7. Register rental activity (if letting): If you intend to rent the property, register with the Croatian Tax Administration before commencing letting activity. Short-term rental hosts must also obtain the relevant tourist registration certificate.

Frequently asked questions: property taxes in Croatia

Do I pay real estate transfer tax when buying a new-build apartment in Croatia?

When a newly built property is sold to its first purchaser, VAT at the standard rate of 25% is charged and incorporated into the developer’s asking price, with the developer responsible for remitting it to the state. Consequently, the buyer is not liable for the 3% real estate transfer tax. That said, the 25% VAT is effectively embedded in the purchase price, so it remains an indirect cost. First-time buyers may be entitled to a partial refund of the VAT — current eligibility conditions should be confirmed with the Croatian Tax Administration.

If I live in my Croatian property permanently, do I pay the annual property tax?

The annual property tax does not apply to properties used as the owner’s primary residence. Provided the property is your permanent home and you are correctly registered as a resident there, you are fully exempt from this tax. It is important to ensure your status is accurately reported to avoid receiving an incorrect assessment.

How long do I need to own a property before selling it tax-free in Croatia?

A holding period of more than two years is required. Capital gains arising on the disposal of property are subject to tax; however, gains from the sale of a taxpayer’s principal residence are excluded. Gains from real estate disposals are taxable only where the sale takes place within two years of the date of acquisition. Property sold after that threshold has been crossed is entirely exempt from capital gains tax, unless the sale is structured through a corporate entity.

Do I need to file a tax return in Croatia as a non-resident property owner?

Non-residents with rental income from Croatian property must register with and report to the Croatian Tax Administration. An obligation to submit an annual personal income tax return does not automatically arise for non-residents in all scenarios, but rental and capital gains income must be declared. The precise requirements depend on individual circumstances; advice from a locally qualified Croatian tax adviser is recommended, and it is worth checking whether a double taxation treaty between Croatia and your country of residence affects your position.

Is there inheritance tax between spouses on Croatian property?

Close family members — including spouses and children — are generally exempt from inheritance and gift tax on property in Croatia. Inheritance and gift tax is levied at the rate of 4% and is payable by any individual or legal entity receiving an inheritance or gift in Croatia, subject to applicable exemptions. The 3% real estate transfer tax may also apply to the transfer. The current scope of family exemptions should be confirmed with the Croatian Tax Administration, as the rules can be amended.

Are there any property taxes specific to Airbnb or short-term rental hosts?

Short-term holiday rentals attract a flat-rate tax calculated per sleeping unit, which differs structurally from the percentage-based treatment applied to long-term lets. Short-term hosts must also register with the tourism authority, pay any applicable local tourist levies, and from 2025 are no longer shielded from the annual property tax by way of a holiday home category. A further significant development introduced by legislation in 2025 is a restriction on converting residential apartments into short-term tourist rental units — anyone wishing to begin letting an apartment on this basis must first obtain the consent of at least 66% of their neighbours. Current flat-rate amounts for your specific municipality should be confirmed with the Tax Administration.

Can I claim the first-time buyer transfer tax refund as a foreign national?

Foreign buyers are treated on the same basis as Croatian nationals with regard to tax rates, and first-time buyers are eligible for a full transfer tax refund on primary residence purchases regardless of their nationality. Eligibility is determined by the intended use of the property as a primary residence and by compliance with any size and price conditions imposed by the Tax Administration. Current requirements can be verified at the Croatian Tax Administration website or through a locally qualified adviser.

Where can I find official, up-to-date information on Croatian property taxes?

The principal official source is the Croatian Tax Administration (Porezna uprava). For matters relating to land registration, the appropriate point of contact is the county court land registry (zemljišnoknjižni odjel). For investment-related queries, the Invest in Croatia agency publishes helpful guidance. Given the scale of changes that took effect in 2025 and the potential for further developments, engaging a locally qualified Croatian tax adviser or property lawyer before proceeding with any transaction is strongly advisable.