Croatia Introduces New Property Tax Law
The Croatian government has announced a new property tax initiative set to take effect on January 1, 2025. This legislation will replace the existing vacation home tax and will apply to all residential properties, with certain exemptions.
Key highlights
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Taxable Properties. The new law encompasses all residential properties, including houses and apartments, while agricultural and non-residential properties remain exempt.
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Exemptions. Properties that are owner-occupied or under long-term leases (over 10 months annually), uninhabitable properties, corporate properties held for sale for less than six months, and public-purpose properties owned by municipalities or the state are exempt.
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Taxpayers. Both domestic and foreign individuals and legal entities that own real estate, as well as users regulated under communal fee rules, will be subject to taxation.
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Tax Rates. Local governments will set rates within a range of €0.6 to €8 per square meter, with the 2025 rate required to be established by February.
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Regulatory Flexibility. Local authorities can apply different rates based on zoning, property age, or added features and may offer exemptions for socially vulnerable citizens.
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Assessment Date. Property taxes will be assessed as of March 31 each year. Owners must report any changes to their properties that could impact their tax obligations by this date, or they may incur fines ranging from €1,000 to €6,000.
This reform aims to address the lack of rental properties in the market and enhance local housing availability.