Capital Gains Tax on the sale of property

[Carol]

I need some advice or guidance and I am hoping someone here can help?
There is a 3 year rule applying to private buyers of property in Croatia. the rule is that if you sell within 3 years, then there is 35% Capital Gains Tax on any profit you make.

Does anyone know when the three years start counting? I can think of three options:-
1. The contract date
2. The date on which all the papers are deposited at the land registry (i.e. after the permission has been given)
3. he date that the land registry finally puts the new owners name in section A of the Vlasnicki List

I've tried finding the answer online. Its a tax so the Ministry of Finance website seemed a good place to look. Its got a comprehensive list of taxes all nicely explained in English. But it doesn't explain this tax. I can see that it falls within income tax for non-residents, but that's all. It doesn't contain the detailed rules which I need.
This is the website if anyone ever needs to find something:-
www.porezna-uprava.hr/en/porezi/v_poreza.asp?id=b01d1#4.1_PERSONAL_INCOME_TAX_

I know this question has been asked here before by others and we never did get a definitive answer, but more time has gone by now and maybe a foreigner has sold and either been charged the tax or has found them selves exempt? Or maybe someone else just knows where to find the relevant law ?

[valiant]

a who knows ?
if you have the right connections, you can probably get away without paying it.
we eventually sold the "gradjevinsko" land that we werent allowed to build on, to a well connected builder. and guess what???....the builder now has obtained a building permit!!!
man i love this country. if you have connections you can do anything, if you dont...then your off to the nearest wall for headbutting practice.

[Carol]

I just got a sensible answer via email! Thank you Martin westby.

[Westy]

So are you going to share this info with the rest of us then, Carol, or has MW sworn you to secrecy?

[jill]

Yes, I'd be interested too.

I thought the period was 5 years from the date that the land registry puts the property in your name, so the fact that it is three is already a bonus! Hopefully my property will be going into my name this week as permission has just come through after two and a half years!

[mirabelle]

This is trade secret! You will have to buy his book to find out!

[polako]

The period of 3 years starts being calculated from when the property is registered in your name on the land register. Hope that helps.

[Carol]

Not a trade secret, I just haven't logged in since yesterday afternoon and as no one except Valiant commented before then i thought no one else was interested.

Martin told me that he has spoken to various people and a couple of the big international accounting firms. He has not got a definitive answer but he is told the evidence is pointing towards the date of the sales contract being the relevant one as this is the point when ownership begins in reality if not legally e.g. the new owner takes on the utility bills.
He said there have been a couple of court cases where the judgement has found in favour of the sales contract date.

I don't think Martin does make people buy his book to get info, and for that matter i don't make them buy mine either. He wrote his book years ago (and has since revised it) when the market was hot but people really hadn't a clue how to do things. It is not as though Croatia lends itself to helping strangers to the country (they don't even do road signs half the time). So at the beginning no one knew how to do anything but there was a lot of misinformation being passed around (look at the early questions on this forum for evidence) and I guess Martin got tired of answering the same questions again and again, so he put it all in a book.

[valj]

We bought Martin Westby's book before we came out to live here and it helped us enourmously !! There were only a few things that we not covered in the book but we found out about these things from locals and very friendly policeman who processed our residency visas (when we could get residency visas and not visitor 6 month visas!!)

Do not have his updated version but we are planning on purchasing this on our next visit to the UK.

[polako]

Re; Carol's last reply; thanks for the update. The caselaw must be a recent development as it was the case that it was 3 years from the date that the owner's name was entered on the land register. Also it is a real palava for someone to change bills into a new foreign owner's name on the basis of the contract of sale if you have purchased as an individual, so this is going to be quite complicated. Carol could you find the names of the cases or where we could locate them as I know a few friends thinking of selling because of the new residency and rental laws and so this would be very helpful. Thanks.