Reservation, costs and fees
How do I reserve my apartment?
Contact the sales agent and they will assist you in your reservation. A reservation fee will be required to hold the apartment, subject to contract.
Is Croatia like other eastern European countries?
Croatia is a cosmopolitan European country, with one of the world’s most beautiful coastlines. There are many cultural influences in Croatia, but those who live on Croatia’s Adriatic coastline enjoy a Mediterranean lifestyle and share as many cultural similarities with Italy as Croatia. Indeed the Venetian influence can be seen in the architecture, the people and even the language of the area.
Can anyone buy in Croatia?
Currently, only citizens of countries which have reciprocity with Croatia can buy property there in their own name. Much of Europe is included, however the process is complicated and can be very time consuming. Often it can take years to complete. For this reason, most foreigners buying in Croatia choose to incorporate a local company wholly owned by them. The property is then purchased in the name of the company. This is very much easier and quicker and there are other tax advantages.
What does reciprocity mean?
Reciprocity is an agreement between two countries whereby the citizens of each country may buy property in the other's country. Such an agreement is in place between much of Europe and Croatia but each purchase requires an application process and permission to be granted before transfer of ownership can take place.
What are the benefits of buying off plan?
An off plan purchase allows you to be first into the development, giving you first choice of apartments at the best prices. Investment at this stage allows you to put little money down and enjoy substantial gains in capital growth as the development is built.
Do the apartments come furnished?
Apartments do not come furnished as standard, however a comprehensive furnishing service will be available nearer completion. A choice of 'turn-key' packages ready for renting will be offered together with a 'pick and mix' to suit individual tastes. Indicative prices can be given now but cannot be guaranteed until 2009.
What are the costs and processes with buying in Croatia?
You should budget 7 - 8.5% for additional purchase costs. Please speak to your Sales Agent for a more detailed breakdown.
When will the development be complete?
Completion is scheduled 2009.
Are the properties freehold?
Yes.
Can I resell my property prior to completion?
Yes you can. The preliminary sales contracts are fully re-assignable.
Are there any building guarantees?
Yes. There will be a standard 10 year building guarantee, as is the case for most good quality new build.
What is the government re-zoning programme?
To maintain the unspoilt beauty of the country, the Croatian government maintains tight control of any new build. The re-zoning programme is a new initiative by the local government to create specific zones for residential property in order to prevent over development.
Will Croatia be joining the EU?
Yes. Croatia is expected to join the EU in 2009/2010; this should have a significant impact on the property prices in the country
Is there a demand for new property?
Yes. Accommodation on Brac? during the tourist season is normally over booked.
Rental
What is a rental license and how much does it cost?
A rental license is a legal requirement if you want to rent your property out. The cost is approx. €800 and the license is easy to obtain.
How long does it last?
Once purchased the rental license lasts indefinitely.
How are my bills for basic amenities set up and how are they paid?
As with all properties there are ongoing maintenance costs. The management agents will be on-site to help ensure things run smoothly. Speak to your sales agent for more information.
Legals
Are there any land title (ownership) issues?
Legal title for older (re-sale) properties in Croatia can often be held in the names of multiple family members, some of whom may be living overseas, uncontactable or deceased. Unless all owners have been identified and are party to the sales agreement it has been known for them to turn up in the future and lay claim to a portion of the property. There is much less risk of this with new build off plan developments because the clear title of the land will have been thoroughly checked by both the lawyers of the developer (before they bought it) and by the lawyers of the purchasers before they agree to sign the sales contract. Kavanjin has been certified as being of clear title with the developer being the sole owner.
Will my property be registered with the Croatian land registry?
All properties will be registered with the Croatian land registry. However, please bear in mind that if you choose to buy the property in your own name under the reciprocity process this can take some time to do.
What happens if I change my mind?
This depends when you do so. The terms of your contract will determine the exact outcome but in most cases you can expect to lose a proportion of the funds that have been paid to date as damages and to cover costs incurred in re-selling the property. Your lawyer will be able to give you detailed advice before you sign the contract and then at any later date should you require it.
Are there any other costs I need to consider?
There are additional costs relating to the ongoing maintenance and management of the property. Please speak to your sales agent for more details.
What are the benefits of buying through a company?
There are several significant advantages of incorporating a local company and buying the property through it. Firstly, the purchasing and registering of the property is far quicker than if done through the reciprocity process. Secondly, you will be able to rent the property out which cannot happen if foreigners own the property in their own name. Thirdly, it is usually possible to register the company for VAT and claim back a proportion of the 22% VAT paid as part of the purchase price.
How much VAT will I pay on the property?
VAT is 22% and is chargeable on the value of the building.
If I am not able to travel to Croatia to sign the necessary papers what do I do?
As in most countries, you can sign a document called a Power of Attorney to trusted individuals (usually your lawyer) to sign documents on your behalf.
What is the Capital Gains Tax on the property?
There is no capital gains tax after three years in Croatia but you can’t own more than one property in your personal name. This is another reason why many choose to own through a local Croatian company.
What is the currency in Croatia?
The unit of currency is the Croatian kuna (kn), which is divided into 100 lipa.
What currency can I buy my property in?
The actual purchase transaction has to take place in the local currency (Croatian Kuna). However for convenience and understanding the properties are being marketed in Euros.
Do I need a Croatian bank account?
If you decide to buy your property through a local company it will be necessary for local Croatian bank accounts to be set up. These will then be used to hold money transferred into the country for the initial purchase as well as receive any future rental income and pay any expenses. If you decide to buy through the reciprocity scheme it will still be far more convenient to have a bank account in Croatia for paying expenses, etc. but less essential.
What documentation will I require when making the purchase?
By law we are obliged to conduct standard anti-money laundering checks and report any suspicious looking activity. You will therefore have to provide certified copies of your passport and proof of address which we will retain on file.
