Purchase costs for property in Croatia
Your purchase costs should come to around 11% in total - 5% stamp duty and 2% legal costs - payable once the approvals come through from the Ministry. Agency fees of between 3% and 4% account for the rest and are payable at contract stage. When the approvals come through from the Ministry, the new owner should also pay the 5% buying tax based on the value estimated by the Ministry of Finance.
The payment details vary Croatia property by property. For a new development, you can pay as much as 20% at pre contract stage, another 60% during the construction stage and the final 20% on completion. In some cases, you pay the 60% on completion. There are no bank guarantees available in Croatia, so you will have a capital exposure for the money paid over to the developer in advance of completion. You need to take care to protect your payments during the construction phase; you should ask your lawyer to work something out with the developer. There are a few options the developer can take, which depend on his circumstances and whether or not he has a loan secured on the land.
It's worth considering setting up a company prior to purchasing property in Croatia, weighing the once-off costs against savings the 5% stamp duty and die annual maintenance costs associated with a company.
Buying a home in Croatia should be a pleasant experience. If you do your homework, and know what is involved, you should succeed in getting your property in Croatia.
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