Useful information about Croatia
Istria, Croatia
€10,000

[approx. £8,100 or $12,000]

Please read below some useful information about purchasing property in Croatia.

PLEASE NOTE: Since February 2009, foreign nationals are able to buy in Croatia with the same rights and opportunities as local Croats! This change in the rules has been brought in preparation of Croatia joining the EU, which is expected to happen in 2011. With foreign buyers now able to purchase property on the same terms as local buyers, there is one more reason to purchase in this beautiful country! With its idyllic Adriatic coast, warm welcome, marinas, seaside cafes and restaurants or even the new golf courses of Istria, Croatia has plenty to offer, still at reasonable prices.

The purchase process: Once you have decided which property to purchase, you sign a pre-sale contract containing details of the property, the buyer and the seller as well as the completion date of the purchase. A 10 % deposit is paid to secure the property. Completion takes place 3 to 6 weeks later. Both parties sign the official sale contract at a local Croatian notary public office. The notary will oversee the signature of the contract.

We recommend that you use the services of an English speaking lawyer during the purchase process. This can be arranged whilst you are in Croatia. The fees for a notary plus a lawyer are about 1.5 % of the purchase price.

Taxes: For an individual the stamp duty or Transfer Tax is 5% of the property price and is paid within 30 days of entry in the Land Registry.
If the property is sold within 3 years of purchase, the capital gains tax is 35 %, however you don’t have to pay capital gains tax if you keep the property for 3 years or more! Income tax is about 25 % of the declared rental profit, which applies to owners renting out as individuals rather than through a company. There is a double taxation agreement between Croatia and the UK as well as between Croatia and Ireland, which means you don’t have to pay the same amount of tax twice.

Mortgages: As well as paying cash, a foreign buyer can usually borrow up to 70% of the purchase price through a mortgage. All mortgage applications are subject to status and considered on an individual basis by local banks.

Rental income: The rental potential depends on the location and type of property. Most holiday makers come from continental Europe and prefer modern apartments close to the sea. Several coastal towns in Istria have been well preserved and are built around a main square featuring cafes and restaurants with terraces open all year round. You should therefore look for properties built to modern standards and preferably within walking distance of both town centre and sea as such properties can easily be rented out from late spring to early autumn.

Croatia and the property market: Before the early 1990s, Croatia was already an important destination for tourism in Europe. It is fast climbing back up to this former status whilst imposing strict rules on property developments so as to preserve its cultural heritage and the appeal of its coastlines. As the country moves towards EU membership, expected improvements include increased financial packages, lower interest rates and speedier registration of ownership, making it easier and affordable for a broader base of foreign buyers to purchase in Croatia. Shrewd investors are buying now to enjoy maximum price increases.

Why choose Istria? Istria borders Slovenia to the West and has a maritime border with Italy. It is known as “the new Tuscany” and is a beautiful region with great vineyards. It is also the most popular destination for foreign visitors to Croatia. Access is easy via Trieste or Venice airports from the UK. It is only a 40 minute drive to Istria via Slovenia. You can also fly directly to Pula from Dublin and London or to Rijeka from Oslo. Istria has been catering for tourism since the 1960s and facilities such as cash points, doctor’s surgeries, shops and cafes with terraces are everywhere. The region is also a popular holiday destination for Italian, German, Slovenian, Austrian, French and Swiss holiday makers who can easily drive from their respective home country to Istria. This creates a big demand for self catering rental apartments in the region, especially during the summer months of June to September

Prices in Istria remain much lower than in the south of Croatia. Capital growth forecasts are fuelled by the improved the motorway network and the fact that up to 14 golf courses (out of 23 nationwide) are being built in Istria alone. Together with improved facilities for yacht owners, this pushes prices up by attracting a wealthier type of visitors and investors, whilst remaining more affordable than further south in Croatia.

Please remember that we do not charge you for our service and the price of the property is the same whether you buy through Selection Property or directly from a developer or local agent.

Please call Selection Property on +44 (0)20 8533 9988 or email
contact@selectionproperty.com for more information.