Property Sales
Buying a property in Croatia? We are a full service estate agency specialising in everything from old stone houses to new build apartments and off-plan developments on the Dalmatian Coast of Croatia. Our ethos at A Place in Dalmatia Ltd is to provide our clients with a professional, efficient and reliable service.
Based near Split , on the Adriatic coast, we are a British run agency with fluent, multi-lingual English speaking staff. We believe that our combination of experience and local presence provides our customers with the opportunity to buy through an agency who can provide UK service standards but with local Croatian knowledge and presence. Having gone through many of the hurdles involved in buying a house, setting up a company and getting all the relevant visas and permits ourselves, we are well placed to share our insight and experience. The following will act as a guide but it is important to remember that A Place in Dalmatia Ltd is committed to helping you through each stage of the purchase process, and beyond.
Before you go…
Identify method of purchase – Company or Private route
Arrange for competitive foreign Exchange purchase eg Halo Financial or Moneycorp
Find a lawyer to work for you if necessary
Open a Croatian bank account
Arrange an accountant (if you take the company route)
If all the above are in place before you find your dream place in
Private Individual versus
Company Route
It is prudent, even before starting to seriously search for property, to identify which method of purchase you intend to use i.e. the Croatian Company route or the Private Individual route. Also, once you see your dream Place in Dalmatia, you may need to act quickly and it is sensible to have a bank account set up in
Foreign Exchange Company
At this point, you are close to committing to purchase what will be a considerable sum of Euros (as Croatian property is always quoted in Euros). If you purchase via the Company route, the transaction MUST by law, take place in Kuna, but it is simpler to transfer Euros into your bank account in
Before arriving at the point of making an offer on a property, it would be sensible to have considered whether you want a survey done on the property. Typically, surveys are not done on property in
With the possibility of delays and unforeseen problems, you may want to extend to someone the power of attorney to act on your behalf (subject to pre-agreed guidelines) to both undertake the founding of the company or to act on your behalf in negotiations and the signing of contracts. A Place in Dalmatia Ltd would be happy to discuss this option with you.
Private Individual route or Croatian Company route
In summary, there are two main routes to owning your own place in
Company – a Croatian company (owned by you) can freely purchase property. (for a complete description of the timeline and cost of setting-up a company, please see our leaflet ‘Company Setup’). There are certain advantages which may accrue though these must be weighed against the costs of setting up a company and the ongoing accounting commitments necessary to maintain a functioning company.
The most obvious advantage is that permission from the Ministry of Justice is not required and that you can become the full, legal owner as soon as the payment of the final part of the contract goes through.
If you plan on selling the property within three years, any capital gains are not taxed (current rate is 35%) though as the company will have made a profit on the property, this will be taxed at 20%. If you plan to rent out the property or indeed own more than one, there are advantages such as making certain expenses tax-deductible. Also, certain renovation and construction works can be set against profits but we recommend taking professional advice.
Private – the main difference is the need to seek permission, as a foreigner, from the Ministry of Justice which can take anything up to 18 months or more. Certain works can be undertaken before permission is granted (non-structural internal works) and given the reciprocal arrangements in place between the
Whichever route you take, you can either sign :-
A 10% pre-contract or
A full contract granting immediate ownership.
When your verbal offer is accepted a contract to purchase is drawn up and a deposit, usually 10% of the purchase price, is paid. If you have chosen the Company route, the balance becomes payable, usually within 30 days following the signing of a full purchase contract. If you have chosen the Private route then a full contract may be signed but you would be proceeding without the permission of the Ministry of Justice. If the 10% pre-contract remains the only contract signed and permission takes a while to be obtained, then there is a danger that, in a market where prices are moving up, the seller may find it beneficial him to break his contract with you if he receives a more attractive offer. He would be forced to return to you your 10% as well as being obliged to pay an extra 10%.
Whichever route is undertaken, and we will work closely with our clients to ascertain their needs, the absolutely key element to undertaking any purchase in
On the day agreed for the signing of the contract, both the seller and the buyer (or the person who has Power of Attorney) will sign in the presence of a Notary. As a foreigner, the presence of an official court interpreter is required. The notary and the interpreter will make a small charge for these services.
As soon as the contract has been completed the new owner needs to be registered in the Land Registry which confirms full, legal ownership. This stage can’t be completed for a private individual until the MFA has given approval for the property purchase.
Other Costs
Once the contracts are signed, there is a further tax on the value of the property, the Real Estate Purchase tax which currently stands at 5%. This is calculated by the local authority and is not necessarily the same as the contract price. This is done to avoid the temptation of an artificially low contract price. Once their invoice is issued, you have 30 days to pay.
