Property in Croatia

Things to know about buying real estate in Croatia

There are certain things you have to know about buying real estate in Croatia and once you know them you can save a lot of money and time. There is always reason to be causes but buying property in Croatia is a fairly straight forward process even though it can be very complicated if you do it on your own. It can be done, but the time and effort you will have to spend by going through the whole process by yourself, is maybe not worth it. You will save some money but this money is well spent!
There are 3 ways to do it: the expensive, cheaper way and cheapest way.
The expensive way includes hiring a solicitor/lawyer and a real estate agent.
The Cheaper way excludes the lawyer that usually charges 5% of the purchasing value.
The cheapest way excludes both the lawyer and the real estate agent but includes advisory company and the Notary Public (a qualified solicitor appointed by and working for the Croatian Government). Typical fee for a Notary Public in such case would be 500-700 €uros and advisory company would charge 3% of the purchase value.

Advisory company, in this case ViaKon, is with you throughout the whole process, from first to last day. The process can take as little as 3-4 days and as much as 10-14 days, it all depends on how busy, all the Government offices we have to go to, are at the time of your purchase.
ViaKon is working for you and with you and besides having an advisory capacity, it also functions as a translator, guide through all local offices, courts etc...
We know the process and will do our best to get you through as swiftly as possible.
Our aim is your recommendation.

Why Croatia

Croatia has much to offer the property purchaser, including an enormous variety of landscapes, a wide choice of cities, towns and villages, a great climate and wonderful beaches. 

Its popularity really took off in 2001, and it promptly became one of the countries that were part of the ‘emerging market’ phenomenon. It opened up to foreign investors, who quickly took advantage of the inexpensive properties that were to be found throughout the country.

Anyone who wants ease of access from the rest of Europe, the clear waters of the Adriatic and an ever-improving infrastructure has got to consider Croatia. Croatia officially became an EU candidate country in 2004 and opened formal accession talks the following year, with full membership of the European fold following on 1st July 2013. This is a result of the impressive progress made by the country as an independent state, and will help promote the long-term prosperity of the country. 

As of February 2009, the property market in Croatia became more open to foreigners, as are now able to buy on the same terms as local Croats. This burning of red tape in the buying process will not only speed up the property buying procedure, it should encourage more buyers to purchase in Croatia with confidence.

Popular property locations

In the last few years, Croatia has emerged from the troubles of the early 1990s, when war tore through the Balkans. The infrastructure has been transformed, good roads now link north and south, airports have been built, and the country has been put on a sound footing, to attract more and more visitors interested in buying property.
The country is divided into numerous different regions, however most property buyers tend to want to buy in the coastal areas of Istria, Kvarner and Dalmatia. This is a land of medieval towns safe within high walls, breathtaking scenery, and an extraordinary mix of cultures and history.

Potential homeowners are given a real à la carte in the variety of landscapes to choose from. Spending holidays in different regions is helpful in making a final decision and if you are able, try to visit at different times of the year so that you are aware of what the winter climate and atmosphere are like.

With more coastline than any other European country (1,770km long and in addition has around 1,200 islands), Croatia real estate is some of the most exquisite real estate in the world – and at some of the lowest prices. But a powerful trend is currently under way.  Property prices are rising. The future looks bright. Now is the time to pay attention to this market, where you could double or triple the value of your real estate investment dollars in a short (that is, three-to-five-year) window. The long term could be even more promising. Now is the time to stake your investment claim in Croatian real estate.

The short-term rental market will grow with the number of returning tourists. Unspoiled, relaxed, beautiful, and safe, Croatia is one of Europe’s loveliest treasures. Everything a discriminating visitor or home buyer is looking for can be found right here: crystal-clear seas, timeless fishing villages, and unspoiled beaches, Roman ruins, a pristine lake district, and medieval walled cities.

Property in Istria

Istria’s nightingales (and when did you last hear nightingales?) have much to sing about. Dangling like a leaf from the northernmost tip of Croatia, the Istrian peninsula lays out a mosaic of sapphire seas, charming huddles of red-roofed walled towns, campaniles, bell towers, loggias, old Venetian ports, pristine pine forests, sun-drenched coves, and small pebble beaches. Istria is the largest peninsula in the Adriatic region. More than anywhere else in Croatia, you’ll probably feel as if you’ve landed in Italy–Tuscany, to be exact. Away from the coast, the landscape stitches together vineyards, olive groves, quaint stone houses, ancient watermills, evergreen cypresses, and blossoming myrtle. Thankfully, Istria doesn’t get the same amount of summer visitors as Tuscany (well, not yet). Although German real estate buyers are here in force, the real estate market hasn’t seen quite the same explosion as farther south, around Dubrovnik.

What is pre-contract

A Pre-Contract is similar to the exchange of contracts stage (in the UK), but there are differences. The Pre-Contract is a legally binding document that defines the terms of the property purchase – in particular it effectively fixes the purchase price; it specifies the schedule of payments, including (usually) a 10% deposit payable to the vendor on signing the Pre-Contract; and it fixes the Final Contract settlement date as well as the penalties should either party withdraw from the transaction after signing the Pre-Contract. In Croatia these penalties usually specify that should the vendor withdraw from the transaction after signing the Pre-Contract, they are obliged to return double the deposit to the buyer. If the buyer withdraws from the transaction after signing the Pre-Contract, they will lose their deposit.

It is possible to skip the Pre-Contract and go directly to the Final Contract stage, but we would not recommend it. Skipping the Pre-Contract may result in lower legal fees and personal expenses, but the major disadvantage is that the property could be sold to another buyer whilst the Final Contract is being drawn-up – and in the meantime, you the buyer will have incurred a number of costs. The Croatian system therefore effectively stops possible gazumping once the Pre-Contract has been signed, by making the Pre-Contract legally binding. Also, as the Pre-Contract fixes the final purchase price, there is no room for a vendor to change the asking price at the last minute without having to think seriously about the financial penalties built into the Pre-Contract.

What is Notary Public 

The Notary Public is a qualified solicitor appointed by and working for the Croatian Government. Their role is to ensure that all the documents involved in the property transaction are valid, legal and binding. Specifically, it is a requirement within Croatian Property law that the Notary Public witnesses the signatures on the Final Contract – without this witnessing stage the Final Contract is not legally binding. Also, the Notary Public will certify that any documents that have been translated from a foreign language to Croatian have been prepared by a registered court translator - thereby guaranteeing that the translated documents are true and valid.

How does the financial part of the property bying process take place?

Usually the funds are transferred to the vendor’s account; the Final Contract is signed; and the vendor signs a confirmation that they have received the funds. Most people quite understandably are uncomfortable with the thought of sending money to someone in a foreign country with no apparent guarantees - in which case an Escrow Service can be used.

Are escrow services available?

Typical cost, chargeable by a Notary Public, is 4000 Croatian Kunas (approx EUR 550) to hold EUR 75,000 in Escrow for up to a year. It may be that an independent solicitor you appoint can provide this service for no additional cost, so it would be a good idea to ask any solicitor you are thinking of appointing whether they can offer Escrow Services or not, and whether they charge extra for the service.

How to open a bank account in Croatia?

Opening a bank account in Croatia is a fairly straight forward process but you will be required to do it in person and you will need your passport to prove your identity and OIB number that every person in Croatia must have (Personal identity number), which your solicitor will issue for you at local Tax Administration Office.. We suggest that you open a foreign currency account to handle the transfer of payments for the property transaction as well as a local Kuna account which you will need for smaller expnses once the transaction has completed.

Taking possesion of your property

This is dependent on the terms written into the Final Contract. Usually the buyer can take possession of the property as soon as the sale has completed, ie, the Final Contract has been signed by the buyer and the vendor; the full purchase price has been paid; and the “Clausula Intabulandi“ (see above) and Power of Attorney over the property have been signed. As long as these steps have been completed and you have a Powerof Attorney signed, you can take possession even if you have to wait for Ministry of Justice approval before registering your ownership with the Land Registry.