Croatia, a European country known for its rich cultural history and breathtaking scenery, has attracted foreigners from all over the world as they look to explore its real estate market. If you wish to buy property in Croatia, we advise reading this guide to understand the complexities you may encounter in your journey to purchase a Croatian home.
Can Foreigners Buy Real Estate in Croatia?
Yes! The Croatian government allows foreign nationals to buy property. However, there are several rules you need to adhere to if you are from a non-European country. For instance, you must obtain approval from the Croatian Ministry of Justice.
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For Europeans looking to invest in the Croatian real estate market, the buying process is straightforward, with a few nuances.
Can I Become a Croatian Resident by Owning Property
Owning property in Croatia does not grant residency rights. However, being a property owner boosts your chances of having your application for residency approved. That’s because it shows your commitment to staying in Croatia for a long time.
If you want to obtain residency in Croatia, these are the routes you can take: starting a business, getting employed, enrolling in a learning institution, and family reunification. Note that each route comes with its set of procedures and requirements.
For example, if you want to get residency through employment, your employer must be Croatian. Further, to obtain residency by starting a business, your entity needs to contribute to the Croatian economy.
In most cases, the Croatian authorities will initially issue you a temporary residency permit that expires after a few years. Upon its expiration, you can choose between renewing the permit or applying for a permanent residency.
How about citizenship? To obtain Croatian citizenship, you are required to be proficient in the country’s national language and understand the Croatian legal system and culture.
Croatian Real Estate Market Metrics
According to data from Investopedia.com, Croatians have become 25% richer in the past five years. This has led to increased demand for properties, causing their prices to rise significantly.
Data from Numbeo shows that real estate investors in Croatia can expect an average rental yield of 3%. Such yield is seen in markets where the income generated from rent covers all the costs associated with the property.
As of July 2024, the average cost of buying a unit in Croatia is $1,158 per square meter. The most expensive units are found in areas like Dubrovnik and Zagreb, while cheaper ones are in Osijek and Pula.
Documents Required to Complete Real Estate Transactions in Croatia
You need to present the following documents to complete real estate transactions:
1. A proof of ownership document.
2. A notarized purchase contract.
3. A certificate of occupancy.
4. A certificate of good standing.
5. A valid government-issued identification document.
6. A certificate of title.
Can Foreigners Obtain Mortgage in Croatia?
Several financial institutions in Croatia allow foreigners to obtain mortgages to finance their property purchases. To secure a mortgage as a foreign national, you must submit a document showing your employment history or a bank statement. The mortgage repayment period can go up to 20 years, with an interest rate of 5% or less.
Some Croatian banks that give foreigners access to mortgages include Erste&Steiermärkische Bank, Zagrebačka banka, and Privredna banka Zagreb.
How to Acquire Property as a Foreigner in Croatia
Here are simple steps to follow to purchase a real estate in Croatia:
1. Find a Croatia-based real estate agent to help you identify your suitable unit.
2. Research the Croatian property market to find the units available for sale.
3. Select a unit and engage with the seller to plan for a site visit.
4. Conduct a thorough property survey and then send your initial bid to the seller.
5. Allow the real estate agent to negotiate on your behalf.
6. Enter into a purchase agreement upon agreeing on a fair price.
7. Make a down payment as per the agreement.
8. Submit the property transfer papers to the land registry so that your purchase can be officially recognized.
9. Pay the remaining balance and associated fees.
10. Receive a title deed and move in.