Due to the growing interest of citizens of third countries for real estate on our coast and the increased number of inquiries about the possibilities of acquiring property and residence in Croatia, we decided to contact the lawyer, Mr. Dino Pivac, who prepared a short guide for citizens of third countries with basic instructions which we present below.
Third-Country Nationals – in the sense of the relevant regulations of the Republic of Croatia – are persons who are not citizens of member states of the European Economic Area (the European Union, the Principality of Liechtenstein, the Kingdom of Norway, the Republic of Iceland) or the Swiss Confederation, and who have the citizenship of a third country or are stateless.
Citizens of third countries cannot acquire ownership of agricultural and forest land in the Republic of Croatia, but they can buy real estate within the boundaries of the construction area – apartments, houses, etc. or undeveloped construction land – and this under the assumption of reciprocity between the Republic of Croatia and the country in question, and the obtained consent of the Ministry of Justice of the Republic of Croatia.
on a short-term (also called tourist) stay – up to 90 days in any period of 180 days, with the fact that 90 days of stay can be used once or multiple times;
on temporary residence – up to one year;
on permanent residence – unlimited.
The time spent in other member states of the European Economic Area is not included in the short-term stay. During a short-term stay, a citizen of a third country must have registered accommodation. The accommodation must be reported by the legal or natural person who provided accommodation to the citizen of a third country within one day of the arrival of the third country citizen for accommodation via the eVisitor website or by reporting to the competent police department/station. If the accommodation provider cannot register, the citizen of a third country has an obligation to register within two days of entering the Republic of Croatia or changing accommodation.
For example, citizens of the visa country (e.g., Russia) submit requests in diplomatic and consular missions. The police department or station, based on the place of intended stay/residence, decides on the request, informs the consular representation where the request was submitted, and they issue a visa for entry into the Republic of Croatia. On the other hand, citizens of a country (e.g. Ukraine) where a visa is not required can submit a request at the police department or station at their place of residence.
Among other things, temporary residence in the Republic of Croatia can be granted to a citizen of a third country based on the fact of ownership of real estate in the Republic of Croatia.
The following shall be attached to the request for a temporary residence permit:
color photo of size 3×3.5 cm;
a copy of a valid foreign passport or other travel document (the validity period of the foreign travel document must be three months longer than the period of validity of the temporary residence);
proof of insured funds for maintenance – funds needed for maintenance on a monthly basis in the amount of at least 50% of the average monthly net salary paid in the last year in Croatia (currently HRK 3,560.00 x 12 months), and the proof can be a bank certificate, pension extract, employment contract, etc.;
proof of health insurance – private or travel health insurance, employment contract, etc.;
proof that he has not been legally convicted of criminal offenses from his home country or the country where he resided for more than a year immediately before arriving in the Republic of Croatia;
proof that justifies the purpose of a residence in the Republic of Croatia – in this particular case, a title deed for real estate in the Republic of Croatia that proves ownership of the same.
The documents attached to the request must be in the original or in a certified copy, and foreign documents in a certified translation in Croatian (exceptionally in English) and certified in accordance with special regulations, which again depends on which country it is, because the documents are for use in the Republic of Croatia for some countries a notarization-apostille is required (eg Ukraine), while for some countries no special certification is required (eg Russia). The list of countries can be seen at: https://mpu.gov.hr/nadovjera-legalizacija-isprava/25282
Most importantly, the request for re-approval of temporary residence in the Republic of Croatia based on the fact of ownership of real estate in the Republic of Croatia can be submitted again after the expiration of six months from the expiration of the previously approved temporary residence.
We hope that this blog has dispelled at least some of the doubts that you, as citizens of third countries, had when inquiring about buying real estate in Croatia or changing your residence. For all additional information and advice, do not hesitate to contact us, and we will be happy to connect you with experienced experts in this field.
In the last few years, there has been a lot of talk about a new generation of investors investing significant funds in cryptocurrencies. Although until recently, local market investors were still quite skeptical about digital assets and did not easily engage in cryptocurrency trading, current data show that this market is currently on a real upswing.
The consequences that followed the coronavirus pandemic have affected every segment of our daily lives and our habits; therefore, it does not come as a surprise that we quickly adopt new trends, and we readily adapt to the changing market situation faster than ever.
Crypto investors – current trends and doubts
While many people are starting to get acquainted with the cryptocurrency market in the desire to make a profit through safe and prudent investment, experienced crypto investors around the world use their digital currencies to invest in real estate. The growing trend of buying real estate in cryptocurrencies has been registered worldwide, and it seems that global trends are increasingly being accepted by investors in the local market as well.
Croatian properties have attracted great interest among international clients, and ever since the country joined the EU, many clients have decided to look for investment opportunities in attractive destinations on the Adriatic. At the beginning of 2023, Croatia will enter the eurozone, which is yet another reason for international clients to plan their new investments with additional security and optimism. In line with clients’ growing interest in real estate on the Adriatic coast and the increasing number of inquiries from crypto investors, we often get asked: ‘Is it even possible to buy real estate in Croatia with cryptocurrencies?’
Villa Virtuosa – island of Brač
A Quick Tax Guide to Buying With Cryptocurrencies
Analyzing the most common doubts and tax issues crypto investors face, we contacted the authorized tax advisor, Ms. Ivana Zec, who gave us her expert insight into the most important tax aspects that need to be considered when buying with cryptocurrencies. More detailed information is provided below.
Cryptocurrency-related transactions are part of a trend that is increasingly drawing the attention of tax advisors, accountants, and the Tax Administration itself. There are more and more specific actions and processes that are designed in the digital world, which should be incorporated into existing legal provisions for the purpose of taxation and accounting.
When talking about cryptocurrencies, it is important to emphasize that their acquisition is not taxable, but from the tax point of view, the owners of cryptocurrencies should be aware of the importance of sale or conversion into any other fiat currency. Namely, at the moment of selling or exchanging cryptocurrency for Croatian kuna or Euro or any other fiat currency, a potential tax liability arises for the cryptocurrency holder.
If the cryptocurrency holder is a natural person, the difference between the sale and purchase value is taxable with capital gains tax on the basis of capital gains, which is calculated at a rate of 10% plus surtax if the person has temporary or permanent residence in Croatia.
When a legal entity is the cryptocurrency holder, the sale of cryptocurrencies or their conversion into fiat currency has its own accounting story, which depends on the purpose for which the cryptocurrency was originally acquired.
Stone villa for sale – Brač
When talking about buying real estate and paying with cryptocurrencies, it is important to note that, according to the existing legal provisions, payment alone cannot be made directly in cryptocurrencies. It is necessary to change cryptocurrencies into Croatian kuna and make payments in this form. At the very moment of exchanging cryptocurrency into fiat currency, income tax is levied if the owner is a natural person. If the owner is a legal entity, the earnings are included in the profit and loss account.
In any case, it is recommended to consult a tax advisor before any transaction related to cryptocurrencies and real estate so that the owner of the cryptocurrency, i.e., the buyer of the real estate, is aware of all tax aspects.
In the case of international clients, it is important to emphasize that they need to check the tax aspect of these transactions in the country of their tax residence.
We hope that this blog will answer some of the tax questions that crypto investors often ask themselves before the final decision to buy real estate in Croatia.
For all additional information and advice, do not hesitate to contact us, and our agents will connect you with experienced experts in this field who will gladly guide you throughout the purchase process.
As we are still evaluating the direct and indirect effects of the coronavirus outbreak on the global economy, there has been increasing speculation over the future of the tourism sector in general since it has suffered a huge setback from this crisis and all the challenges it inevitably brings.
Considering that the Croatian economy is extremely dependent on tourism, which directly generates a significant share of the country’s GDP, it is not surprising that investors and rental property owners found themselves in an unenviable situation overnight, facing numerous inquiries from concerned guests who wanted to cancel their reservations or inquired about the current epidemiological situation in the country, as well as the procedures that would be implemented at border crossings. A fierce battle for each and every reservation ensued since the confirmed reservations could have been canceled at any moment due to the introduction of quarantine in certain emitting markets, or the recommendation to postpone travel until further notice, but also due to a number of new rules introduced on a weekly basis.
Exposed to a large amount of often contradictory information, and the recommendation of global booking platforms counseling implementation of high-risk cancellation policy without any penalties for last-minute cancellations, vacation rental owners and travel agents had very modest expectations for the so-called ‘new normal’ tourist season in unprecedented circumstances.
Given that the epidemiological situation in the country has been stable, and that the spread of the virus has been kept under control, Croatia has been recognized as a safe destination, and despite skeptical announcements and cautious forecasts of expected numbers and results, there has been an increased interest in luxury holiday villas.
Tourists’ expectations and demands
What conclusions can be drawn about the profile of travelers who were not discouraged by the Covid-19 and who decided to take their seaside vacation nonetheless?
First of all, it is clear that new time brings new expectations and standards that property owners must successfully meet in order to gain the trust of customers and provide them with absolute security that they can spend their vacation carefree regardless of the challenging circumstances we are currently facing. According to the latest inquiries and trends, most clients seek to book luxury villas in prestigious locations and oftentimes tend to book longer stays and additional services such as daily cleaning, grocery procurement, and a private chef who will take care of all meals during their stay. Such requests were more easily accommodated by the owners of prestigious villas who had previously been in contact with clients who want a little something extra for their vacation and by that, we don’t mean just modern amenities or a picturesque sea view.
A new era of travel – trends, and opportunities
Current trends again lead us to the conclusion that these extraordinary times have not by any means seen a downfall in demand for the most luxurious properties in exclusive locations. Moreover, the demand for facilities of this type seems to greatly exceed the supply, so customers are often compelled to change their plans and choose another destination that can meet their expectations. The largest number of confirmed reservations has been made by guests from neighboring countries who, thanks to the favorable geopolitical position of Croatia and excellent infrastructure, traditionally arrive on vacation by cars, and due to shorter trips prefer to choose holidays in the northern parts of the Adriatic and Istria.
It is very difficult to predict future developments in the global market and the dynamic world of the travel industry, but we are certainly at the dawn of a new era of travel that will be defined by adaptation to a new lifestyle promoting strong awareness of values such as health safety, environmental protection, and socially responsible behavior.
With growing awareness of the effects of mass tourism, clients are nowadays looking for more ecologically sustainable destinations and accommodating facilities, therefore we are presented with a unique opportunity to position Croatia as a destination that can meet new challenges and readily accept new conditions that might potentially result in a more responsible and innovative offer tailored to the current market needs.
The sun, the sea, beautiful weather, and Mediterranean lifestyle, combined with great properties in great locations, are the recipe for a successful business year when it comes to Croatia’s luxury real estate market. The numbers have gone up and are expected to continue growing throughout the following year.
Retrospective of the luxury real estate market in 2018
2018 has generally been kind to Croatia’s luxury real estate market since demands for this sort of property were up by 25 percent compared to 2017. At the same time, the prices of luxury real estate in Croatia rose by 10-15 percent. The average price for a villa ranges between 5000 to 6000 euros for a square meter.
Clients opting for these properties are mostly foreigners, coming primarily from Germany, Austria, the Czech Republic, Slovakia, England, and Scandinavian countries. Also, some inquiries came from Russia and China. The average age of property buyers varies between 45 and 60. Russians and Chinese want the property they buy to match the highest standards, while Europeans are more open to redecorating and reconstructing the property themselves.
Clients have their preferences regarding location, choosing mostly properties at the coastline between Primosten and Trogir (especially in Split) and around the town of Dubrovnik. Besides their beauty, these areas owe their popularity to the proximity of airports, motorways, and marinas. When it comes to the islands, the most popular ones in 2018 were Brac and Hvar.
Despite great results, the market has its issues. The most prominent ones are the somewhat closed banks towards supporting investors and the lack of offer suited for clients aiming at luxury properties.
Predictions for the luxury real estate market in 2019
Still, positive market trends are expected to continue in 2019, with expected price growth of up to 10 percent, followed by even greater demand for luxury real estate in Croatia. The start of construction of several tourist resorts with 5-star hotels is expected in 2019, along with some world-class hotel brands to the Croatian market, such as 4seasons and Marriott.
An invitation with the text “Everything Happened on the Square – Galerija Mala” in 1989 marked the beginning of a small yet important gallery in the heart of Zagreb.
At the very beginning, the gallery’s management stated that they would only present the most current production and contemporary art. Galerija Mala was one of the first private galleries in Croatia.
Located between Mala kavana and Ban cafe, Galerija Mala represents the cultural point of the northern side of the main Zagreb square. It acts as a sales gallery of works of Croatian authors and thus promotes Croatian art.
Photo credit: Galerija Mala
History of Galerija Mala
Opened just before the holidays, the gallery started working with the exhibition of Miroslav Šutej, a prominent and popular academic artist whose career was then at its peak. After the holidays, the gallery hosted presentations of the book “Zagreb before the beginning,” the Golden Bule facsimile, the new Zagreb postcards … Thanks to the attractive location, right next to Harmonica, the rich and always up-to-date program, Galerija Mala became an unavoidable place of cultural encounters. Social events are scheduled throughout the year, under the continuous and independent guidance of Mirna Hromatko Reiser.
The gallery space was formerly used by the publishing organization Mladost. For the needs of the gallery, space was rebuilt by the Architectural Design Institute of Zagreb. In just over 40 square meters, this gallery is home to many artwork and activities. For example, sales and promotion of paintings and graphics, fine plastic, art jewelry, bibliographic and art-related publications, graphic maps, and graphic sheets.
Simple and effective interior
The interior of the gallery is fascinating. The ground floor is dominated by a rock placed opposite the passage, so it’s intended to display paintings and graphics. The second rock is located opposite the entrance and decorated for shelves and showcases. It is suitable for exhibiting other works. The gallery’s central space has remained free so that visitors can see exposed works of art. Since 1989, space has kept all its essential features. It is always painted in neutral white, suitable for displaying all the artwork.
Photo credit: Galerija Mala
Among many artists whose works were exhibited in Galerija Mala, it is hard to point up anyone in particular. Still, we will mention Nikola Reiser, Marijan Muljevic, Milan Steiner, Luj Logic, Stip Nobil, Vasko Lipovac, and Dimitar Popovic. Particularly noteworthy was the „Kravate“ exhibition, an authoring project by Andrew Seifried, also presented in Zadar and Dubrovnik.
The gallery also receives numerous inquiries from artists living and working in Europe, especially from Vienna, Ljubljana, Budapest, and Venice. One of the Gallery’s goals is to enhance and expand the cooperation with artists and raise the cultural and artistic level, not only of the Gallery but of Zagreb as one of the most interesting tourist European cities.
The Gallery can also boast of participating in numerous hotel and business interiors furnishing with artwork and graphics. Artworks can breathe a whole new life into our everyday living space and refresh it. The leadership of Galerija Mala recognized this a long time ago.