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Post by anton on Apr 5, 2008 13:12:42 GMT 1
If it helps we also initially bought privately then set ourselves up as a company. We then provided a contract between ourselves and our company to rent the house and this seemed to work.
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Post by mambo on Apr 5, 2008 17:06:11 GMT 1
@ Bron,
Welcome to Croatia !
The BS you are going through is the main problem of Croatia, nobody has a clue who is doing what and why. Everybody does whatever they want and good luck to the foreigner who wants to sort things out. Worst part is that in court you will be declared guilty for using illegal electricity and water if it would ever get to a court case.
If they are going to disconnect you I think I would start looking for a generator real fast.
But perhaps you can find out if you are still on 'building electricity' which means you will have electricity during the construction. After construction is finished all your electrical connections and wires have to be checked by an official inspector and only after he has signed the papers you can ask for an official connection. Normally this should be done by the developer, since you normally buy a house with all permissions and connections.
Apparently this developer took you to the cleaners and now it is up to you to sort it out.
Maybe even want to think about switching completely to solar and generator power.
And with regard to renting the property. I know other foreigners who simply rent their house through an agent and they have not changed their permits at all.
If this agency turns out to be your own agency (read: company) it should clear all the problems. You will have to report the whole thing to the tax office, pay a nice amount of money to them and in the end you may start wondering if renting is really worth all that hassle.
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Post by londoncro on Apr 5, 2008 22:45:29 GMT 1
Thank you Carole, UptheVilla and Mirabelle for all your help. Funny you should ask about the electricity Mirabelle, as this is the latest shock from Croatia on top of everything else. I've just found out TODAY that we are also on a temporary, ILLEGAL electricity connection! Our lawyer has never informed us of this! When I asked before about us not getting any electricity bills, the answer was "this is Croatia, and you'll probably get one bill for the past three years". Now I know the reason why we've never had a bill. It appears we have a house with both an illegal water and electricity connection. This is a disgrace! Unbelievable. What kind of lawyer let this happen to us? Is there anyone else out there in this situation? The name on the usage permit is the name of the people who previously owned the land which the house is now built on. The developer bought plots of land throughout Istria and then built stone houses. I believe our names will only be on the usage permit when the 5% transfer tax has been paid? I'm waiting for the lawyer to clarify this. How could we get a usage permit if we have illegal water & electricity? I am at my wits end here and haven't a clue what's going on. I feel we've been messed around totally and the lack of communication and support from the lawyer does not help us. Both the lawyer and the Sales Person whom we bought the house from knew at the outset we wanted to rent out the house; they should have advised we buy as a company. I think that even if we set up a company now, apparently the usage permit application has to be gone through again from Buildings Permission application stage including the services of an architect - obviously this would take years! I am open to all suggestions on how to resolve this. I love the house, love Istria but am beginning to regret every buying there. Even if we decided to throw in the towel now and sell, we couldn't! How could we sell a house with no legal water and electricity supply with a usage permit that doesn't allow you to rent out the house. This is a crazy situation! I need to get out of this situation! Thanks everyone in advance for taking the time to help. Selling up and getting out is always an option. |
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Post by zorro on Apr 6, 2008 6:43:48 GMT 1
...at what point do you give up, after investing so much time and money, that is the question Yorick.
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Post by londoncro on Apr 6, 2008 23:00:28 GMT 1
...at what point do you give up, after investing so much time and money, that is the question Yorick. When you realise that you are throwing away good money after bad money. And ending up with a big headache! That is the time to cut your losses. There are certain things that you just cannot win. |
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Post by zorro on Apr 7, 2008 6:35:54 GMT 1
yep.
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Post by upthevilla on Apr 7, 2008 8:46:30 GMT 1
(1. can the company rent the property from someone who has signed the purchase contract and paid for the property but not actually got their name into the land registry e.g. no MJ permission?)
Tricky one,
With permission from the ministry, and all paper work clean and in order then it is a staright forward yes.
If no permission yet, but is pending, then the person must produce the contract of sale as proof of ownership, this is then down to the person in the `office ` to decide. Technically it should be possible but i have never had a client who required it therefore have not attempted it. I would imagine a few trips to the public notary be required
(2. Is the rent which the company pays pre-defined somewhere i.e. will the tax officer say that this apartment should be let for €x?[/quote])
No there is no pre-defined rent.
In general terms, the rent paid by the company should be quiet high, not to high but just realistic.
The company gets charged more tax on profit than a private person,
example.*its an example and simplyfied*
COMPANY OUTGOINGS
Rent from the private.- 1,000 euro
accountant. - 1,200 euro
Bills.water,electric, houskeeping -1,000Euro
Total 3,200euro
COMPANY INCOME
rents for 10 weeks @ 400 euro P/W
Total = 4,000 Euro
The company has made a profit of 800 euro and will be taxed on the this profit .
The private person has made a profit of 1,000 Euro and will be taxed on this. The level of tax for a private person is considerable lower.
This is only an example of the figures and any good accountant should be able to make the figures realistic
any questions just let me know
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Post by darcy on Apr 7, 2008 15:01:00 GMT 1
I know accountants are very important people, but this must be a huge (accounting) mistake.  |
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Post by upthevilla on Apr 7, 2008 16:33:49 GMT 1
No its not a mistake, a GOOD accountant , as in one who actually knows the accountancy laws, gets the books in on time, gets the pdv back when its due and correctly claims the tax each month and saves you money in the process costs about 100 euro per month . 12 months in a year. 12 x 100 = 1,200 Euro per year,
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Post by darcy on Apr 7, 2008 16:58:42 GMT 1
Good on ya. (This is yet another example where Croatian prices are much higher then European.)
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Post by hansel on Apr 7, 2008 18:28:12 GMT 1
The tax officer will say the apartment should be let for €x?[/quote])!
Already been through it, a two bedroom apartment of 56 sqm valued at 1862 kn a month and the tax due on it 207 kn a month.
Hope this helps.
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Post by valiant on Apr 8, 2008 10:01:59 GMT 1
i once had a guy from the electrical company come into my bedroom. it was when i first moved here so i was still in that transitional phase. but i dare a guy from any company to walk into my house now without knocking and asking to come in. i have had enough of these people...and i am psycho. thankyou croatians.
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Post by mambo on Apr 8, 2008 14:26:33 GMT 1
And the cost can even get higher if it is your own company.
Nowadays it is mandatory to have actually someone working in your company, which means you have to pay all the taxes (social security etc) for this person.
Then of course you have the mandatory payments for the chamber of commerce and some other smaller taxes (environment etc).
So the 3200 euro can even increase a little bit more.
And the price of the accountant ?
100 euro per month is even cheap, because most of them will not do a lot for that 100 euro. They call it their starting fee and making up the year report and all the other documents is often charged extra.
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Post by upthevilla on Apr 8, 2008 16:29:54 GMT 1
Yes it is mandatory for the Croatian company to employ someone and this person has to be a Croatian citizen.
One solution is to employ a property management company which has at least one Croatian national as a director.
This way you will not be obligated to pay the taxes, social security etc.
Mandatory chambers of commerce, yes as in a lot of countries
other taxes yes, dont forget we have to pay for the trees every year
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Post by Carol on Apr 8, 2008 20:49:29 GMT 1
just for clarity though, you mean that a croatian company has to employ someone if it receives revenue, not if it is dormant?
Also it can have just one employee who is not a croat if the owner is the employee i.e. you can work for yourself subject to the valid visas etc etc
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