There are 2 possible taxes imposed on property
purchase in Croatia, VAT or Sales Tax.
All property built after Jan 1st 1998 is subject to
VAT at 22%.
For property built prior to 1998, a sales tax of 5%
is applied to the sale price.
It is possible that Sales Tax of 5% will be applied
to the land and VAT at 22% to the value of the building.
In the case where property is purchased via a
Croatian Company, in theory the VAT can be reclaimed, but unless the
property is going to be used commercially or let, it is not
practical to register for VAT as this implies that the company will
be trading.
When a property is sold, there are two taxes which
may be applied: Capital Gains Tax (CGT) if sold by an individual or
Corporation Tax (CT) if sold by a Company.
Recently the CGT rate has been reduced to match the CT rate, i.e.
20%.
CGT is only applicable to properties sold within 3
years of purchase; CT is applied annually to company profits, which
take into account normal trading factors.
AGENT'S FEES
In Croatia, the Vendor and buyer share the selling
agent's fees; a buyer will be asked to pay 4% (+VAT) of the sale
price to the agent.
In addition, there are legal fees of approximately
3% (+VAT).
These taxes are valid as of 4th March 2005, but may
change in the future.
Before reading this page, we refer clients to
TAXES ON SALE OF PROPERTY