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Property ownership

The costs of owning a property in Croatia differ depending on the type and size of the property, the location, and other individual circumstances. However, as a general guide, owners should bear in mind the following:

• Income tax – personal income tax as it applies to property income is charged at 15% at present. Deductions are allowed at a fixed rate of 30% of expenses, or 50% if the tenants are travellers or tourists. If the property was purchased through a Croatian company, corporation tax applies to the rental income (after deductions) at a rate of 20%.
• Local surcharges – levied by some municipalities and cities, this surtax is payable at a rate between 10 – 30% of personal income tax, according to the location of the property:
• Communities – maximum of 10%
• Cities with fewer than 30,000 people – maximum of 12%
• Cities with more than 30,000 people – maximum of 15%
• Capital city of Zagreb – maximum of 30%
• Capital gains tax – if selling the property as an individual, this is payable at 25% on the profits made (after the acquisition cost, adjusted for inflation, and the transfer costs are deducted) on property sold within three years of the original purchase. After three years, no tax is payable. Other cases where the sale is tax exempt is when the transaction takes place between immediate relatives or spouses, or if the property was the home of the person paying the tax or their dependent family members.

If selling the property as a company, corporate income tax of 20% on the net gains applies to the capital gains, as they are treated as business profits. The deductions apply in the same way as for an individual selling the property.

Depreciation counts as an expense for profit and income tax. The depreciation rate of buildings can be 2.5% which is the regular depreciation rate over 40 years, to 10% which is the accelerated depreciation rate over 10 years.

Croatia has a treaty in place to avoid double taxation of income and property in place with Ireland and the UK, among other countries.

Related items

Documents and Reports

	Croatia property investment report (437Kb)
	Croatia country guide (940Kb)
	Croatia property guide (781Kb)
Documents and Reports

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