The porez na promet nekretnina (real estate transfer tax) is a 3% tax levied on the transfer of ownership of existing (second-hand) residential and commercial property in Croatia. It is assessed on the market value of the property as determined by the Tax Administration, not necessarily the stated contract price. First-time buyers of new residential property from developers pay VAT (PDV) at 25% instead.
The transfer tax is payable by the buyer within 30 days of the date of the notarially authenticated purchase contract. The Tax Administration issues an assessment (rješenje o utvrđivanju poreza) after the buyer submits the required documentation, including the authenticated contract and a completed tax declaration form. Tax must be paid before the land registry will accept the registration application.
If the Tax Administration believes the contract price understates the market value, it may commission an independent valuation. The tax is then assessed on the higher appraised value, not the contract price. This is particularly common in coastal markets where tourist-driven demand pushes prices above formal contract figures. Buyers should ensure the contract price reflects the actual amount paid.
Certain transfers are exempt from transfer tax: inheritance of property, gifts between spouses and first-degree relatives, transfers as contributions to company capital, and certain court-ordered transfers. Agricultural land transfers and property transfers under privatisation schemes may also qualify for reduced rates or full exemption under specific legislative provisions.
After paying the tax, the Tax Administration issues a potvrda o plaćenom porezu (tax clearance certificate). This certificate is a prerequisite for submitting the land registry application to the gruntovnica. Without it, the notary cannot submit the registration application and your ownership transfer remains incomplete regardless of payment of the purchase price.
Key Facts
| Rate | 3% of market value for existing properties |
|---|---|
| New builds | VAT at 25% applies instead of transfer tax — no transfer tax due |
| Payment deadline | 30 days from the date of the authenticated purchase contract |
| Assessed by | Porezna uprava (Tax Administration) — may override stated contract price |
| Clearance certificate | Potvrda o plaćenom porezu required before land registry submission |
Frequently Asked Questions
Who pays transfer tax — buyer or seller?
The buyer pays the transfer tax in Croatia. This is different from some other European countries where the tax is split. Budget 3% on top of the purchase price from the outset.
Is transfer tax deductible for income tax?
Transfer tax paid on a property used to generate rental income may be deductible as a cost of acquisition when calculating capital gains tax on a future sale. Consult a Croatian tax adviser for your specific situation.
What if I buy through a company?
Purchases by Croatian or foreign companies are subject to the same 3% transfer tax on resale properties. VAT rules for new builds apply regardless of whether the buyer is an individual or a company. Structuring a purchase through a company for tax reasons is possible but requires specialist advice.