If you own property in Croatia or are planning to purchase one, this article details the new real estate tax that came into effect at the beginning of this year.
In Slovenia, the introduction of a real estate tax is still being considered, while in Croatia, it already came into effect on January 1. The new tax replaces the previous tax on holiday homes and is determined based on the law on local taxes in municipalities and cities.
For tax purposes, real estate is defined as any residential building, the residential part of a mixed-use residential and commercial building, an apartment, or any other independent functional space intended for living. On the other hand, facilities used for storing agricultural machinery, tools, and other equipment, as well as properties where a municipal contribution decision specifies a use coefficient for manufacturing or non-manufacturing business premises, are not classified as real estate.
The real estate tax is payable by the property owner, whether a legal entity or private individual, domestic or foreign. However, the tax liability may also fall on the occupant of the property if the obligation to pay the municipal contribution has been transferred to them under a lease agreement, if they are using the property without legal grounds, or if the owner cannot be identified.
The tax is calculated based on the surface area of the property and ranges from EUR 0.60/m² to EUR 8.00/m² of usable floor area of the property. The tax rate is determined based on the location and additional criteria, such as the age of the property and its intended use. The municipality or city where the property is located makes the final decision on the tax rate.
Taxpayers are not required to file a property tax declaration if they are already paying a municipal contribution for their property. However, they are required to submit to the tax authority, by March 31 of the current year for which the tax is being determined, information about any changes in the assessed surface area or the intended use of the property, proof of rental agreements not registered with the tax authority, and evidence of tax exemption eligibility.
The real estate tax is not payable on properties that:
(i) are used as permanent residences;
(ii) are rented out under a lease agreement for permanent residence (for a period of at least 10 months); and
(iii) are owned by socially disadvantaged individuals.
Properties that cannot be used due to lack of infrastructure, damage, or natural disasters, public properties, and properties owned by business entities intended for sale—provided that no more than six months have passed since they were entered in the business records —are also exempt from the tax.
For all questions regarding the assessment and payment of real estate tax, you should contact the competent tax authority – the municipality, city, or branch of the tax administration where the property is located.
It is also important to note that in municipalities and cities that previously did not impose a tax on holiday homes and will not adopt a decision on the real estate tax rate, the tax will be EUR 0.60/m². In cities and municipalities that had a tax on holiday homes in 2024 but will not adopt a new decision on the tax, the real estate tax will remain the same as the previous tax on holiday homes.
