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Post by justapixel on Mar 12, 2008 16:21:13 GMT 1
Darcy: As I mention in my first post I am only talking about holiday house (second property) which will apply to all foreigners and Croatians holding more than one property. of the hundreds of croatians i know this will apply to maybe 10-15% so i dont know where the 80-85% comes from. Substantially more Croatians than 10-15% own extra property - during som, buying a vikendica was the only money sink available. There's also a huge number of basically empty 3-4 floor (ugly, half finished) family houses that the owners intended to share with their children and grandchildren, but naturally the children fled. . |
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Post by solitum on Mar 12, 2008 17:00:39 GMT 1
Residential owner occupied is 80-85% is the official and the independent estimate. The second property penetration is also very high, I do not know the right figures, but I will estimate it high as 40%. Most of these properties are non-productive holiday houses, but some are multi-million dollar mansions with excellent rental return. Keep in mind, Croatia is a very specific country, the population there was not able to invest their savings other then property or foreign currency accounts. Foreign currency savings accounts in Croatia were devaluated or still in doubt, so property is the main saving vehicle for Croats for the last 50 years. Other financial derivates like investment funds, insurance, shares or non-state pensions are very, very recent and still very primitive. But that doesn’t mean the can't sell it today and put the money in the bank. A solution like now, with houses and ruins standing around, which could produce income for the country, as tax or through renting , it is not very smart. And when you at the same time have 17-20% unemployment, a large black economy and no investment into new JOBS, because the cost of employment simply is not competitive here, do to the high income tax level and social cost. Then I think as unpleasant as I might be, somebody should think about how to change this, maybe not like I suggested, but I don’t really see any other options, as it has so many benefits. Anyway, was just an idea! |
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Post by zorro on Mar 12, 2008 17:20:17 GMT 1
Not really following this tax thing, you pay a massive amount of tax on a holiday home if you sell it in Spain, but it hasn't affected the overall prices of properties.
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Post by solitum on Mar 12, 2008 17:29:51 GMT 1
Not really following this tax thing, you pay a massive amount of tax on a holiday home if you sell it in Spain, but it hasn't affected the overall prices of properties. I never mentioned any tax on selling real estate?, i mention only tax on owning it, and I believe that will change the price level a lot. If not, even more perfect then the tax income from this should be huge, which could make it possible to lower the income tax and thereby the employment cost to competitive level even faster. |
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Post by zorro on Mar 12, 2008 18:50:08 GMT 1
Ohhhh, then I expect people will buy in other countries.
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Post by mark2 on Mar 12, 2008 19:16:29 GMT 1
Another point of view: What about areas and villages where "foreigners" or indeed Croatians living in a foreign country and who are buying derelict properties in Croatia, many which have been empty or unfinished for years? These buyers, in my opinion, are actually adding to a local economy, bringing wealth to "ghost towns". Should they be taxed aswell?
In some cases, it may be more logical for the current owners of derelict properties to be taxed, for example, those owners that are waiting for their ruin to be worth a fortune, but surely to rejuvenate an area should not be taxable.
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Post by justapixel on Mar 12, 2008 19:42:01 GMT 1
Another point of view: What about areas and villages where "foreigners" or indeed Croatians living in a foreign country and who are buying derelict properties in Croatia, many which have been empty or unfinished for years? These buyers, in my opinion, are actually adding to a local economy, bringing wealth to "ghost towns". Should they be taxed aswell? In some cases, it may be more logical for the current owners of derelict properties to be taxed, for example, those owners that are waiting for their ruin to be worth a fortune, but surely to rejuvenate an area should not be taxable. If the property the foreigners bought in Croatia was also their current place of residence, then they would be liable to tax exemptions. Otherwise, it's a country house and it would be ok to tax it. Now that I think of it, we're talking about fictive laws handling fictive situations. ;D . |
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Post by Carol on Mar 12, 2008 20:03:59 GMT 1
rejuvination is talready axed at 22%. it is called pdv. then there is cgt or profit tax when the property is sold.
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Post by solitum on Mar 12, 2008 22:09:36 GMT 1
rejuvination is talready axed at 22%. it is called pdv. then there is cgt or profit tax when the property is sold. but that is one time fee, has nothing to do with recurring tax for owning the property. And if you buy in company you can have the PDV refunded at least if it is new buildings. Anyway the last year I heard so many real estate agents crying about the unrealistic price in the market, because the sellers was just sitting on the property waiting for "stupid" rich buyer, and a same time I hear from local that the don’t like that foreigners buy up the country. So my post was basically just a constructive suggestion how to make everyone benefit, in the hope it could spare me from having to listing and read more about the same complaining song all the time. So I guess I will have to take action my selves and by some earplugs. ;D ;D ;D |
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Post by zorro on Mar 13, 2008 9:27:09 GMT 1
it may be a start if estate agents in Croatia actually carried out proper valuations on properties, very few do, the standard estate agent merely asks the seller what price they want to sell for which usually results in something completely unrealistic and out of the blue
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Post by Carol on Mar 13, 2008 9:48:06 GMT 1
Estate Agent: Thank you for showing me your property. I’ve looked at what similar ones in the area are being sold for and here are some examples so we can compare and then i am going to suggest a suitable price.
Seller: What?!
Estate Agent: so as you can see the best house locally was sold for 300,000 but it is bigger than your property and it was next to the sea. Also it is fully renovated.There is also one on sale for 142,000 right now but I think they are asking too little. Your hosue is a good size, but I think you will agree it does need some work and there are no sea views as you are 100m from the sea. I think you should look for offers around 190,000 but we can test the market if you like with an asking price of 200,000.
Seller: I want 250,000 in my pocket. If you want a fee you will have to take the difference between the sale price and 250k. I co-own the house with my brother and so I will only get half that money. I need 125,000 to buy a small apartment for my son in Split.
Estate Agent: It is up to you of course what price to ask but my personal opinion is that you won’t find a buyer willing to pay that much. You see they will look at the amount of renovation which needs done and will not want to pay you so much that they end up spending more than if they just bought the 300,000 bigger house by the sea.
Seller: what do you mean renovation? My house is perfect.
EsTate Agent: I was thinking of the new roof and the electrics.
Seller: the new roof will only cost 5000 and the electrics are new.
Estate Agent: How new?
Seller: I put them in myself when we got married in 1959.
EsTate Agent: Is there anyway i can persuade you to reduce the price?
Seller: No. That is how much i want. I spoke to the local sage who is an expert on everything and he told me that this is a good price.
Estate Agent: OK.
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Post by Carol on Mar 13, 2008 9:50:16 GMT 1
(I have actually had similar conversations many times, until i stopped doing property take-ons as my head was hurting from banging it against brick walls. Now my team do them but come back with similar stories every day.)
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Post by justapixel on Mar 13, 2008 10:08:52 GMT 1
(I have actually had similar conversations many times, until i stopped doing property take-ons as my head was hurting from banging it against brick walls. Now my team do them but come back with similar stories every day.) ;D That's why I'd like to introduce a bit of (extra) property taxes. With ground burning under their feet they will be much more willing to actually sell their property, not pretend they're doing it. It would make your life easier. . |
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Post by Carol on Mar 13, 2008 10:21:36 GMT 1
that is true. It would be great to weed out the time wasters. The ones above only waste a few hours of our time each but its the ones who only reveal that they had no intention of selling after 30 viewings who I'd love to tax into oblivion! Actually any means of dispatching them into oblivion would be ok with me!!
However, I really don't think that you would ever get the majority of sellers to listen to an estate agents advice. They just don't trust us, and to be honest knowing some estate agents and their practices I am not surprised.
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Post by solitum on Mar 13, 2008 10:45:52 GMT 1
Justapixel : That's why I'd like to introduce a bit of (extra) property taxes. With ground burning under their feet they will be much more willing to actually sell their property, not pretend they're doing it. It would make your life easier. well spoken - exactly the point Agent will benefit - The market will become alive Seller will benefit - (his estate will actually be sold) his son will benefit (He will get appartment and better chance for a job) buyer will benefit - (He will get property at the real value) |
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