Introduction of a new real estate tax in the Republic of Croatia

The Minister of Finance of the Republic of Croatia, Marko Primorac, announced the introduction of a new tax on real estate, which will come into effect at the beginning of next year. This tax is part of a wider package of tax changes aimed at increasing the fairness of the tax system and shifting the burden of taxation from labor to property.

According to the new proposal, real estate tax will be paid for residential buildings, while real estate used for agriculture and non-residential activities will be exempt. The amount of the tax will range from 0.6 to eight euros per square meter, depending on the zoning determined by the local self-government units.

The tax will not be paid by people who live in the property or those who have rented their property for a long term of at least ten months a year. On the other hand, owners of properties that are rented short-term or are vacant, will be liable to pay taxes.

It is expected that this tax will bring significant revenues to the local self-government units, which will keep 80% of the collected funds, while the remaining 20% ​​will go to the central government. Minister Primorac pointed out that the tax will be determined according to the situation on March 31 of the current year.

Experts are divided about the impact of the new tax on the real estate market. While some believe the tax will encourage owners to sell or rent their properties, which could lead to lower prices, others believe the tax will primarily increase rental costs, without significantly affecting property prices.

This move by the Government caused different reactions in the public, on the one hand, praise for a fairer tax system, and on the other, concern about a possible increase in costs for property owners.

One of the comments on social networks was made by Borislav Vujović, the owner and director of the Opereta agency, noting that "it is interesting that Minister Branko Bačić constantly claimed that the goal of this tax is to lower the price of real estate and rent so that they become more affordable, while Minister Primorac says that he does not expect a drop in housing prices as a result of this law and that this is not even desirable".

Tržište nekretnine, 24. Sep. 2024.