MOJ permission via the new regulations

[kingssch1]

We have finally been told by our lawyer that she has sorted our purchase permission via the new regulations from Feb 2009 and we are regsistered in the land registry. However she has told us that we now now need to go to the Tax Office and pay our transfer tax immediately. Should we have received some kind of documentation in reference to this?
What timescale do we have to pay and what is the penalty if we miss it (our lawyer tells us she sent an email weeks ago advising us but we have received nothing)?
Any advice much appreciated

[indianalindsay]

We had an official document from the Ministry, it came in 2 parts with several days between each posting.

I do remember something about a fine if you were too late, fortunately it came just as we were about to visit Croatia so we went straight down to the office. A somewhat depressing experience.

You are lucky, it took me 2.5 years to sort mine out.

[Ribaric]

Normally, two people from the tax office arrive at your property in order to assess it's value in order to decide the transfer tax. Do you know how much you have to pay already?

I don't know what would happen if you are late paying it but I was left in no doubt that late payment would mean something horrible would result. I didn't wait around to find out.

[Carol]

You have to go to the local tax office (ministry of finance) and inform them of your purchase. Take a notarised copy of your sales contract with you and a few photos of the property as it was when you bought it (but showing it in its worst light).
Then you wait.
Approx one year later - longer on Hvar, less in less popular places - the tax officer will decide if he wants to visit the property to value it. If you are very lucky he'll just use the contract price. If he visits the property then he'll probably make up his own price which will always be higher than the contract price. Even if he doesn't visit the property, he may decide to value up.
Then a couple of months later the tax office will issue a bill. They seem to like to have someone collect it in person but not always.
Then you get 45 days (I think or 30??) to pay. Late payment is subject to an interest penalty and possibly a fine.


If you don't agree the valuation then you have to launch an appeal quickly. Be careful about doing this as the tax officers don't really like it and you don't want to come to their attention in a negative way such as this. If you do appeal, then the new valuation could be lower, higher or the same as the tax officer's first valuation.

[kingssch1]

Still slightly confused as 3 different answers..
We are unclear as to our timescale for informing the MOF that we have purchased (we actually exchanged contracts 4.5 yrs ago but it has taken this long to get MOJ permission) How long after our lawyer registered our names in the land registry (about 1 month ago) do we have?
I assume the 30 days refers to payment of tax and not the MOF visit??
So do we need to
1. Wait to receive the documentation resulting from our registration in the land registry before heading off to the tax office as per indianalindsy..
or
2. Wait for the tax inspectors to visit our property in response to our registration (with no input from us?)
or as Carol suggests
3. Activate the process by visiting MOF and inform them of the purchase which we probably can't do until end April
I am concerned re the valuation as we have put in a pool etc since purchase - my understanding was the valuation is based on contract price and I know this has been debated on this forum before - does anyone have evidence of winning an appeal should they (inevitably) value our house higher?
Many thanks - our lawyer really is hopeless and can't seem to clarify any of this...

[Carol]

winning an appeal... yes we achieved a reduction on the markup on our own purchase (and we lived to regret it).

If you are going to the tax office late to declare your purchase then for your own sake be apologetic about it!

Below is an extract from the book I researched and co-wrote about buying property in Croatia:-

QUOTE
Re-sale properties are subject to a real estate transfer tax of 5%. This is the same thing as stamp duty in the UK, but, unlike the in the UK, it does not have to be paid on the day of the property purchase and it is not based on the contract price. Instead, the local tax officer assesses the value of the property independently at a later date and the tax bill is charged at 5% of the tax officer’s valuation (this is a grey area as some tax offices simply take the contract value to be the taxable value but it is the local tax officers valuation which is binding). Therefore, it is a good idea to assist the tax officer to make an accurate valuation by taking several photographs of the property designed to show the condition at the time of purchase prior to embarking on any improvement works. There is an appeal process if the tax valuation is higher than the contract price but you will need to seek legal advice from your lawyer with regard to the chances of success. Appealing does not mitigate your legal requirement to pay. You will still have to pay the 5% as valued and hope to be able to reclaim some money back.

The buyer has a legal requirement to inform the local tax office of the property purchase within 30 days or risk a fine. The tax office will require the following documents when declaring the property purchase:-
1. Two notarised copies of the sales contract
2. A completed form (which can be collected at the office). This form must be completed in Croatian.
3. A copy of the katastar map
4. A copy of the katastar extract
5. A copy of the document by which the preceding owner came into ownership of the property (purchase contract, inheritance solution etc).


A tax bill is sent soon after the valuation and payment is required within 30 days, after which penalties will be incurred.
UNQUOTE


The list is quite comprehensive I believe although some tax offices do not seem to require all the documentation whilst others do. Item 5 can be the most problematic so if it is difficult to obtain, then just try to present everything else and hope that your tax office doesn't want it.

[kingssch1]

Thanks Carol
I'm wondering if someone would be able to visit the tax office to register the purchase on our behalf at this point. Can a lawyer do it by proxy?

[Carol]

yes a lawyer can. Or the estate agent. Or a friend.

You need a power of attorney for them to do it on your behalf. I think it can even be done by post - i need to check this though. If you signed a POA relating to the sale (presumably you did or how else did the lawyer register your ownership at the land registry?) then if it was worded broadly enough, it should suffice. Ditto for collecting the tax appraisal at the end (they call it the "tax solution").

[Carol]

I am not sure what would happen about the form you should fill if you notify the tax office by post.
However if this option is possible then do send it by registered post. In Croatia registered post costs 14kn whereas regular post costs 7kn, so the discrepancy is much smaller than for the different services from the Royal Mail. It makes a big difference though when you run into problems.
When we first came to Croatia we naively believed people when they told us that everything is done by word of honour. How stupid could we be??! In Croatia whatever you do only counts if it is in writing, the signature is backed with a stamp and you can prove delivery.

[crojoe]

I am in the process of purchasing building land after the changes and we will be able to pay the related taxes and communal taxes and so forth over a year. You can pay in one lump sum and pay a little less, or you can do it over a year or two. Your lawyer or architect can work it all out. As much as possible, don't buy on your company. There is also a first timer buyer tax break available.

[splitska]

Can someone please advise me. I just received my tax bill for a property bought with someone else about 5 years ago. Fortunately I am flying to Split tomorrow and will pay it next week as my lawyer said I have only 15 days to do this ! My question is - how long after this will it take to have our names entered in the Land Registry? I am now buying the other half of the property but can't buy it from my partner until both our names are entered in the Land Registry for the orginal purchase 5 years ago.

[prkbrk]

In our experience we had to pay the tax and show prooof of such before we could be entered into the Land Registry - they determind the tax we were due from the contract price and as far as I know we had no inspectors visit. From purchase ( private under the old laws) until we got our name on the registry it took around 4.5 years. We only actually got our tax bill 1 year after we had MOJ/MOFA approval and as our property is in joint names it was split 50/50- we paid at the same time thru FINA- you have I think 30 days to appeal after you get your assessment- not worth the hassle in my view unless the purchase price and assessment 'price' used for tax purposes is vastly different

[crojoe]

You can contact the tax office and explain this situation, as if your not entered in the land registry then you are not officially the owner. Until that’s done, the sale is still ongoing.

It’s odd the way they do the process, almost back to front, but they should give you more time if requested.

[splitska]

Thanks for that crojoe and prkbrk but my question is roughly how long for our names to go into the land registry? We already have Ministry approval and will pay the tax next week so the next step is land registry. Is this something that happens quickly or takes months ?

[crojoe]

Should just take the day, at least thats what we are told.