property purchase tax

[mo]

I am considering buying an offplan appt in Croatia. When do I pay the 5% property tax ? Is it when I pay the 1st instalment or at completion which could be 1 year down the line. If i buy through a Company does anybody know if i pay on the value of the appt or on the land?

Thanks

Mo

[LawyerHr]

mo said:

I am considering buying an offplan appt in Croatia. When do I pay the 5% property tax ? Is it when I pay the 1st instalment or at completion which could be 1 year down the line. If i buy through a Company does anybody know if i pay on the value of the appt or on the land?

Thanks

Mo

Your obligation to pay a land tax, become due at the moment of signing the contract (i.e. at the exchange), and you must send tax returns within 30 days from it.

Your tax amount is calculated on the fair (market) value of the property purchased.

[Rudjer]

What are the costs of buying property in Croatia?

Real estate agent charge about 3% commission.

Real Estate Transfer Tax is 5%.

How much does it cost to register my property in the Land Registry?

How high might Community Taxes be?

Any other hidden costs...

Thanks for your kind attention. I look forward to reading your comments.

Rudjer

[Jonathan Campbell]

This is a tricky area and many people get confused.

My understanding is that if you are buying a new property (which you are if you are buying off-plan) then you will not be able to pay the 5% 'stamp duty' equivalent but instead will have to pay 22% PDV (=VAT) on the full (or sometimes building part) of the cost of your new flat. Sometimes the sellers include this in the selling price and they offer to pay it (in that case make sure they do as you may otherwise still be liable if they do not).

If you are buying through a company you should get professional advice to find out whether it is to your advantage to reclaim that VAT amount. Whether you want to do that generally depends on what you want to do with the property and the amount of revenue you intend to get from it.

If for some reason you are required to pay the 5% tax and not the 22%, in my experience the procedure is that you first declare your purchase to the authorities. They will asess the transaction and come up with their own open market valuation (this may include an on site meeting). Once they have decided the amount they want to tax you on they write to you and you then have 15 days to pay. In some cases it can take many months between your notification and their decision which worries me in view of the rate of price increases! It is not possible to claim back the 5% tax.

I am surprised that you would be required to pay the tax on first exchange as you would not generally own anything at that point. You would only have a contractual right. It would be more normal to pay the tax at completion.

Hope this helps

[LawyerHr]

As I said before, tax returns must be given in 30 days after the exchange!

You can not register in the land registry if you do not have a confirmation that you've done your tax duty.

If you are buying a newly built place,only 5% land tax applies. There is additional cot of 250 kn for land registry stam duty. And, of course, legel fee if ther is not already incalculated in the agent's commision.

There is no extra vat charging, it is already usually incorporated in the purchase price if you are buying from the builder directly!

[eire]

Hi ,
I was wondering what are the costs associated with buying a 10 yr old second hand property, for example if I am paying around 60,000 euros for an apartment what could I expect to pay in total when all costs have been added up(eg Lawers fees ,Notary , Vat ,Tax, land registry and anything else involved in a second hand property sale,
Thanks in advance for any input

[LawyerHr]

Guest-eire said:

Hi ,
I was wondering what are the costs associated with buying a 10 yr old second hand property, for example if I am paying around 60,000 euros for an apartment what could I expect to pay in total when all costs have been added up(eg Lawers fees ,Notary , Vat ,Tax, land registry and anything else involved in a second hand property sale,
Thanks in advance for any input

Roughly, around 3000 £ all together. ( i calculated lawyer's fee 1,5 % and agent's fee 1,5%)

Best