There are two ways to buy property in Croatia - as an individual or as a company. Philippe Robin of Selection Property explains the purchase process, taxes and financing options available to foreign purchasers interested in buying a property in Croatia.
'Once you have decided which property to purchase, you sign a pre-sale contract containing details of the property, of the buyer and the seller as well as of the completion date of the purchase. A 10 per cent deposit is paid to secure the property. You can either purchase the property by paying ‘cash’ or by securing funding through a second mortgage on another property.
Completion of the purchase usually takes place three to six weeks later. Both parties sign the official sale contract at a local Croatian notary public’s office. The notary will oversee the signature of the contract and send an application to the Croatian Ministry of Justice or the Ministry of Foreign Affairs depending on where the property is located. The contract should include a clause that protects your rights and will allow you to use the property immediately, without waiting for the paperwork to be completed and sent back from the Ministry. When the approval is received, you are confirmed as the new owner in the Land Registry.
'This option is for foreign purchasers looking to secure a mortgage. Currently it is only available to registered companies. It also removes the requirement to apply for a permit from the relevant Ministry. Once you have decided which property to purchase, an attorney will set up a limited liability company (D.O.O.) and liaise with the bank to process the loan application.
'The bank will open the necessary bank accounts. You then transfer at least 30 per cent of the property price into the company account. This is in turn transferred to the seller once the contract is signed. The balance (maximum 70 per cent of the property price) is transferred from the bank to the seller upon completion of the purchase.
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