PURCHASE OF REAL ESTATE IN CROATIA BY CITIZENS AND LEGAL ENTITIES FROM THE EUROPEAN UNION MEMBER STATES

The right of ownership over real property is obtained when the registration is completed in the land registers e.g. based on a valid legal transaction; a real estate sales contract in the case of acquisition of rights by purchase.
When drafting a contract, it is important to pay attention to the fact that:

• the data on the land registration owner must be identical to the data on the personal identification card of the seller or rather the data from the court register extract;
• the data on the buyer must be accurately stated (according to the personal identification card or court register data);
• real property data must be identical to the land registry data (the name of the cadastral municipality, number of land registration file, number of land registry parcel, parcel culture);
• if the real property is encumbered, it is advisable to state that the person acquiring the title is familiar with the registered encumbrance.

Furthermore, since there are no longer special preconditions for acquiring ownership over the real property valid for the nationals from the European Union member states (reciprocity and consent of the minister in charge of the judiciary affairs), when concluding a legal transaction; verifying the seller's signature in the presence of the notary public, a real estate transfer tax liability arises.

However, prohibitions on the acquisition of property rights remain over the real properties that are:

• agricultural land and
• areas protected under the Nature Protection Act.

The purchase of agricultural land and/or protected parts of nature by citizens and legal entities from the European Union member states is void. Therefore, in case of any doubts, it is advisable to verify with the competent department for spatial planning whether real property is an agricultural land either land outside the boundaries of the construction area, or not.

Furthermore, the status of a real estate shall be verified with the land registers files, as well as with the data of the cadastre, and, depending on the circumstances of each case, additional verification may be advised before the conclusion of a real estate sales contract. It would be necessary to obtain a personal identification number (OIB) for the buyer, which is, except in the case of a purchase of taxable property, determined and assigned in order to open a bank account, establish a company, apply for a residence permit in Croatia, etc.

Author: Silvija Žužić | Lawyer Croatia | Law office Rijeka, Krk