Property Taxes in Croatia for Foreigners
Croatia’s property tax system is more straightforward than many foreigners expect — there is no annual wealth tax, and the costs of buying are broadly comparable to other European countries. But there are several distinct taxes that apply at different stages: when you buy, while you hold the property, when you rent it out, when you sell, and when property passes by inheritance or gift. And since 2025, one of those taxes changed significantly.
This guide covers every property-related tax in Croatia that a foreign buyer or owner needs to understand, with the rates, exemptions, and practical implications explained clearly. The tax rules apply equally to Croatian nationals and foreigners — Croatia does not impose additional levies on non-resident buyers beyond what Croatian citizens pay. For the specific question of who is entitled to buy property in Croatia, see our guide on can foreigners buy property in Croatia.
Overview: Property Taxes in Croatia at Each Stage
The table below gives a quick overview of every tax you may encounter as a foreign property owner in Croatia.
| Tax | When it applies | Rate | Who pays |
|---|---|---|---|
| Real estate transfer tax (porez na promet nekretnina) | Buying second-hand property | 3% | Buyer |
| VAT (PDV) | Buying new-build from VAT-registered developer | 25% | Buyer (usually included in price) |
| Annual property tax (porez na nekretnine) | Every year, while holding residential property not used as primary residence | €0.60–€8.00/m²/year (municipality-set) | Property owner |
| Capital gains tax | Selling property held for a short period, or repeated property transactions | 24% of the gain | Seller |
| Rental income tax | Renting out the property | 12% on 70% of gross rent | Property owner |
| Inheritance and gift tax / real estate transfer tax on inherited property | Inheriting or receiving property as a gift | Exempt for direct-line relatives and spouse; 3% transfer tax for others (real estate); 4% for others (movable assets) | Heir or recipient |
Real Estate Transfer Tax: The Main Cost of Buying Property in Croatia
When you purchase a second-hand (resale) property in Croatia, you pay real estate transfer tax (porez na promet nekretnina) at a flat rate of 3% of the property’s market value. The tax base is the agreed purchase price as stated in the notarised sale contract, subject to verification by the Tax Administration (Porezna uprava) against its own assessment of the property’s market value. If the Tax Administration considers the agreed price to be below market value, it can assess the tax on the higher amount.
The 3% transfer tax is paid by the buyer and applies regardless of the buyer’s nationality — Croatian citizens and foreign nationals pay the same rate. You are required to pay the tax within 30 days of the date the notarised contract was concluded. Your Croatian lawyer will prepare and submit the tax declaration on your behalf.
One important exemption: if you are inheriting property from a parent, grandparent, spouse, child or grandchild, no transfer tax is payable. Direct-line relatives and surviving spouses are fully exempt from transfer tax on inherited property. For more on inheriting property in Croatia, see our guides on Croatian probate procedure and selling inherited property in Croatia.
VAT on New-Build Properties in Croatia
When you purchase a brand-new apartment or house from a developer who is registered for VAT, the transaction is subject to Croatian VAT (porez na dodanu vrijednost, PDV) at the standard rate of 25%, rather than the 3% real estate transfer tax. The two taxes do not apply simultaneously — it is one or the other depending on the nature of the transaction and the seller’s VAT status.
In practice, the purchase price quoted by a Croatian developer will normally include VAT. The 25% VAT is much higher than the 3% transfer tax, which is why new-build properties in Croatia are generally more expensive in tax terms than buying an equivalent resale property. That said, new builds also typically involve no renovation costs and are sold with full documentation and building permits already in place.
Reduced VAT rates may apply in specific circumstances — for example, for residential units meeting certain conditions as a first home. Given the complexity of VAT rules in development transactions, it is important to have a Croatian lawyer review the developer’s contract and clarify the tax position before signing.
The New Annual Property Tax in Croatia: What Changed in 2025
The most significant recent change to property taxation in Croatia is the introduction of a new annual property tax (porez na nekretnine) from 1 January 2025. This new tax replaces the old holiday home tax (porez na kuće za odmor) and extends the annual levy to a much broader category of properties, including empty apartments and flats used intermittently as holiday accommodation.
For foreign owners of Croatian holiday homes and investment properties, this is the tax most likely to affect your ongoing holding costs.
How Much Is the Annual Property Tax?
The annual property tax is set by each municipality (grad or općina) within a range established by national law. The range runs from €0.60 to €8.00 per square metre of usable floor area per year. Each municipality sets its own rate within this band, and rates can differ significantly from one location to another.
To give a sense of the practical cost, here are the rates set by some of Croatia’s main cities for 2025:
| City | Annual rate per m² | Annual tax on 60 m² property | Annual tax on 100 m² property |
|---|---|---|---|
| Zagreb | €5.00 | €300 | €500 |
| Split | €1.99 | €119 | €199 |
| Rijeka | €5.00 | €300 | €500 |
| Osijek | €0.60 | €36 | €60 |
Rates in coastal municipalities vary widely. The rate for your specific property is determined by the municipality where it is located, and bills are issued annually. For smaller coastal municipalities popular with foreign buyers — such as Rovinj, Makarska or Trogir — you should check the rate set by that specific municipality.
Who Pays the New Property Tax — and Who Is Exempt?
The annual property tax applies to all owners of residential real estate in Croatia — both Croatian nationals and foreign nationals — with no distinction based on nationality. The same rules apply to a British, German or American owner as to a Croatian citizen.
However, there are important exemptions. The annual property tax does not apply to:
Primary residence. If the property is your registered primary residence, no annual property tax is payable. This exemption also applies if the property is used as the primary residence of a family member.
Long-term rental. Properties rented out on a long-term basis for at least 10 months per year are exempt from the annual property tax. This exemption was introduced deliberately to incentivise long-term rental over short-term tourist lets, as Croatia faces a shortage of long-term rental housing in major cities and coastal areas.
Uninhabitable or derelict properties. Properties that are uninhabitable or structurally derelict may be exempt, subject to documentation.
Social and other grounds. Certain exemptions exist for owners in difficult social circumstances — these are assessed by the relevant municipality.
For most foreign buyers who own a holiday home in Croatia that they use personally during summer and leave vacant for the rest of the year, the annual property tax will apply. This is a change from the old holiday home tax system, which applied only to properties formally classified as holiday homes and typically located in coastal or tourist areas. The new tax is broader and applies across all Croatian municipalities — including Zagreb and other inland cities.
Capital Gains Tax When Selling Property in Croatia
If you sell a property in Croatia, capital gains tax may apply to the profit you make on the sale. Croatian capital gains tax on real estate is charged at a rate of 24% of the net gain (the difference between the selling price and the acquisition price, with allowable costs deducted). However, two important exemptions mean that in practice many sellers pay no capital gains tax at all.
The Holding Period Exemption
Capital gains tax applies only if you sell a property within a set holding period from the date of acquisition. If you have owned the property beyond that period, the gain is not subject to capital gains tax. The applicable holding period is established by the Personal Income Tax Act (Zakon o porezu na dohodak); because tax legislation in Croatia has been subject to ongoing reform, we recommend confirming the current threshold with a Croatian tax professional at the time of your sale, as the precise holding period has been adjusted by legislative amendments in recent years.
For sellers of inherited property, the acquisition date is taken as the date of death of the previous owner — not the date of the inheritance decision or the date of land registry registration. This is a consequence of the ipso iure principle of Croatian succession law, under which ownership passes at the moment of death. In many cases, this means that heirs who sell inherited property are already past the capital gains tax holding period at the time they come to sell, particularly where the deceased passed away some years ago.
Primary Residence Exemption
Gains arising from the sale of your registered primary residence are exempt from capital gains tax regardless of how long you have owned the property. This exemption applies whether you are a Croatian resident or a non-resident.
The Repeated Transactions Rule
Even if the holding period exemption would otherwise apply, capital gains tax is charged if you sell more than three properties of the same type within any five-year period. This rule is designed to prevent tax avoidance through short-term property trading. Most foreign buyers who purchase one or two properties for personal use are not affected by this provision.
For a detailed practical guide to the capital gains implications of selling inherited Croatian property specifically — including the acquisition date rule and the reporting deadline — see our post on selling inherited property in Croatia.
Rental Income Tax on Croatian Property
If you rent out your Croatian property — whether to long-term tenants or to short-term holiday guests — the rental income is subject to Croatian income tax. This applies regardless of your country of residence: rental income from Croatian property is treated as Croatian-source income and is taxable in Croatia, even if you live abroad.
The tax on rental income is calculated as follows: a flat 30% deduction is allowed from gross rental income to cover costs and expenses, without needing to document actual costs. The remaining 70% of gross rental income is the taxable base. Income tax is charged on that base at a rate of 12%. The result is an effective tax rate of approximately 8.4% of gross rental income, before any local surtax.
In addition to income tax, some Croatian municipalities impose a local surtax (prirez) calculated as a percentage of the income tax itself. The surtax rate varies by location and should be verified for your specific municipality. Zagreb abolished its local surtax in 2024.
If you are a resident of a country that has a double taxation treaty with Croatia — which includes the United Kingdom, Germany, the United States, the Netherlands, Austria and many others — the taxes you pay in Croatia may be credited against your tax liability in your home country. The specific rules depend on the treaty between Croatia and your country of residence. A tax professional in both countries should be consulted to avoid double taxation.
Short-term rental (tourist lets). If you rent out your property on a short-term basis to tourists — through platforms such as Airbnb or Booking.com — different registration and reporting obligations apply, including registration with the Croatian tourist board and obtaining the relevant permits. The income tax rules are broadly similar, but the procedural requirements for short-term rental are more involved. Legal assistance is recommended to ensure full compliance.
Inheritance Tax and Gift Tax on Croatian Property
Croatian inheritance and gift tax (porez na nasljedstvo i darove) applies when property is transferred on death or by gift. The rules are favourable for close family members and largely replicate the same exemptions that apply in the context of the real estate transfer tax.
Who is exempt? The most important exemption covers transfers between the closest relatives: spouses, children, grandchildren, parents, grandparents, and adopted relatives in the same direct-line relationship. These direct-line relatives and surviving spouses pay no inheritance tax or gift tax on Croatian property, regardless of the value of what they receive. This also means that inheriting property in Croatia as a child or spouse of the deceased triggers no Croatian inheritance tax liability on the property.
What non-exempt heirs pay on real estate. For heirs outside the exempt categories — such as siblings, cousins, or unrelated parties — inherited real estate is subject to the standard real estate transfer tax at 3% of the property’s market value. This is the same tax that applies to ordinary property purchases, and it applies to the transfer by inheritance in the same way.
What non-exempt heirs pay on movable property. For non-real-estate assets — cash, securities, vehicles, personal effects and other movable property — inherited or received as a gift by non-exempt persons, a separate inheritance and gift tax (porez na nasljedstvo i darove) applies at a flat rate of 4% of the value received.
Small-value exemption. Movable property received as a gift with a value below €6,700 is exempt from gift tax regardless of who the recipient is.
Note that inheriting property still requires completion of the Croatian probate process (ostavinska rasprava) and registration of the new ownership in the land registry. The absence of inheritance tax does not eliminate these procedural requirements. For a complete guide to the probate process, see our post on Croatian probate procedure for foreign heirs.
Does Croatia Have an Annual Wealth Tax on Property?
Croatia does not have a general annual wealth tax or a property value tax calculated as a percentage of the property’s market value. The new annual property tax introduced in 2025 is a flat per-square-metre levy set by each municipality — it is not a wealth tax and does not vary with the value of your property. Owners of a €200,000 apartment in Split pay the same €1.99/m² as owners of a €2,000,000 villa of the same floor area in the same municipality.
This distinguishes Croatia from some other European countries where annual property value taxes or wealth taxes on real estate can represent a significant ongoing cost for foreign investors. In Croatia, the ongoing holding cost is limited to the per-square-metre annual tax (where applicable) and the income tax on any rental income generated.
Frequently Asked Questions
No. Croatian property tax rules apply equally to Croatian nationals and foreign nationals. There is no additional levy, surcharge or registration requirement specific to foreign buyers or owners. The 3% real estate transfer tax, the new annual property tax, capital gains tax, rental income tax, and inheritance tax all apply on the same terms regardless of nationality. This includes EU citizens and non-EU citizens alike.
Yes, from 2025 onwards. Croatia introduced a new annual property tax (porez na nekretnine) in 2025, replacing the former holiday home tax. The rate is set by each municipality and ranges from €0.60 to €8.00 per square metre of floor area per year. This tax applies to properties that are not used as someone’s primary residence and are not rented out long-term (10+ months per year). For most foreign owners who use their Croatian property for personal holidays and leave it vacant otherwise, this annual tax will apply. The tax is assessed and collected by the local municipality.
There may be. Capital gains tax in Croatia is charged at 24% of the net profit on a property sale, but applies only if the property is sold within a set holding period from the date you acquired it, or if you have carried out more than three similar property transactions in a five-year period. If you have held the property beyond the applicable holding period and this is not a repeated transaction pattern, no capital gains tax applies. Your primary residence is always exempt, regardless of how long you have owned it. For inherited property, the acquisition date runs from the date of the previous owner’s death — not the date of the inheritance decision.
Rental income from Croatian property is taxed in Croatia regardless of where the owner lives. A flat 30% of gross rental income is deductible as an expense allowance, and income tax is charged at 12% on the remaining 70%. This gives an effective rate of approximately 8.4% of gross rent. Some municipalities also levy a local surtax on the income tax amount. If your home country has a double taxation treaty with Croatia (as the UK, US, Germany and many others do), you may be able to offset Croatian taxes against your home country liability — check with a tax professional in both countries.
If you are the spouse, child, grandchild, parent or grandparent of the deceased, you pay no tax in Croatia on inheriting the property. These direct-line relatives and surviving spouses are fully exempt from the real estate transfer tax on inherited Croatian property, regardless of its value. For heirs outside these categories — siblings, cousins, unrelated persons — the standard 3% real estate transfer tax applies to the inherited property. Additionally, if non-exempt heirs receive movable assets (cash, securities, personal effects) as part of the inheritance, a separate inheritance and gift tax at 4% applies to those assets. Regardless of the tax position, you still need to complete the Croatian probate procedure and register ownership in the land registry. See our guide on Croatian probate for foreign heirs.
When purchasing a new-build directly from a VAT-registered developer, you pay Croatian VAT (PDV) at 25% rather than the 3% real estate transfer tax. The two taxes do not apply at the same time. In practice, developers typically quote prices inclusive of VAT. If you are buying a resale (second-hand) property from a private seller, you pay the 3% transfer tax instead. The distinction is important when comparing prices between new and existing properties — the tax differential is significant.
Yes. All property owners in Croatia — whether Croatian nationals or foreigners — are identified in the tax system and land registry by their OIB (personal identification number, osobni identifikacijski broj). You must obtain an OIB before you can purchase and register property, and all subsequent tax obligations (transfer tax, annual property tax, rental income tax) are linked to your OIB. See our full guide on how to get an OIB in Croatia as a foreigner.
No. The Croatian annual property tax introduced in 2025 is a flat per-square-metre levy, not a wealth tax or a tax calculated as a percentage of the property’s market value. The rate is set by each municipality within a national range of €0.60 to €8.00 per m² per year. A larger property incurs a higher total tax bill, but the value of the property makes no difference. Croatia does not have a general wealth tax on real estate. This makes Croatia’s ongoing holding costs relatively predictable compared to jurisdictions where annual property taxes are tied to market valuations.
How Kontić Legal Can Help With Your Croatian Property
Understanding the tax framework is one part of buying, holding or selling property in Croatia — but navigating the legal process correctly is equally important. At Kontić Legal, we act for international clients on all aspects of Croatian property law, from purchase due diligence and contract review to Ministry of Justice consent applications, land registry registrations, OIB assistance and estate planning advice.
Our clients include buyers, sellers and heirs from the UK, Germany, Ireland, the United States, Switzerland, the Netherlands and many other countries. We work remotely under power of attorney where needed, so you do not need to be physically present in Croatia to complete your transaction. We advise on the legal aspects of property transactions — for individual tax planning advice specific to your home country’s tax position, we recommend working with a tax professional in your country of residence alongside Croatian legal counsel.
Questions about buying, owning or selling property in Croatia? Contact Kontić Legal for a consultation.
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