Changes in the real estate market in Croatia 2025 and new regulations

"In 2025, Croatia is implementing a new set of regulations that will significantly change the way the housing market operates. These changes encompass both administrative and tax matters. There's also a significant increase in interest from foreign investors, coinciding with reforms introduced in connection with the country's accession to the OECD. Find out how the Croatian real estate market is changing in 2025!

Real estate market, Croatia 2025 – new law

Real estate market in Croatia – changes

The new regulations aim to increase transparency in housing cooperatives and streamline the rules governing the use of premises. Below are the main changes, which will take effect in 2025:

• Installing an elevator in multi-family buildings now requires the written consent of more than half of the co-owners. It is also necessary to prepare complete design documentation. At the same time, the state covers PLN 331 TP3T of the investment costs.
• The introduction of short-term rentals – e.g. for tourists – is only possible after obtaining the consent of two-thirds of the co-owners and the approval of neighbouring tenants. This also applies if the apartment owner is already operating such a business. In such cases, the required permits must be obtained by the end of 2029.
• Quiet business restrictions include those activities that may generate noise. – they also need to be accepted by the community.
• The new regulations assume that No more than four unrelated people may be accommodated in one apartment without the consent of the co-owners and neighborsThis is to prevent excessive density of premises.
• The rules for financing the Community Renovation Fund have also been changed. The minimum amount of payments and the method of calculating them have been regulated.
• Housing communities have acquired legal personality and an individual identification number (OIB)An official register has also been created to facilitate supervision of building management.
• The required majority thresholds for co-owners to make decisions have been reduced. Urgent repairs do not require consent, essential repairs require only one-third of the votes, and ordinary administration requires more than half.Investment activities require the approval of 80% people.
• The Ministry is developing detailed housekeeping regulations for buildings. Communities can now charge higher fees to tenants who break these regulations.
• According to the new regulations It is strictly forbidden to carry out work that would damage the structure of the building, such as closing balconies or installing air conditioning units on street-facing facades. Fines of up to €10,000 are possible for these offenses.
• In the absence of an elected administrator, his function will be taken over by a compulsory administrator appointed by the mayor or commune headThis decision must be made within six months.
• Municipal inspectors have been given new powers to monitoring compliance with local regulations regarding the maintenance and use of real estate.
• Specific penalties were imposed for failure to comply with obligations or breaking regulations. Managers may be fined between €700 and €5,500, and owners between €400 and €10,000. Those performing illegal work may pay up to 10,000 euros.

The introduction of these regulations changes the way residential buildings are managed and sets new standards of responsibility for all parties involved in the sale and use of premises.

New regulations – property tax

Croatia is implementing new property taxation rules from 2025. The reform covers the purchase, rental, and ownership of properties and aims to streamline the system and better align it with economic realities and European standards.

Real estate acquisition tax

The new rules are intended to prevent excessive purchases of premises in tourist regions by external entities.Additionally, the increase in rates aims to increase revenues to the state budget without limiting residents' ability to purchase apartments.

Income tax on rental properties

The rules for taxing rental income have also been changed. Long-term rental is subject to a reduced rate of 8%. However, short-term rentals, popular in the summer season, were taxed higher – 10%.

This is intended to limit the expansion of the tourism market, which in recent years has put pressure on housing prices in cities and on the Croatian coast. The authorities are striving to restore a balance between the interests of local communities and the growing number of foreigners looking for a second home.

Annual property tax

The new annual property tax system replaces the previous municipal levy. The following rates apply depending on property type:

• premises for permanent residence – 0.2% per year of the value of the property;
• recreational apartments – 0.31 TP3T, with the possibility of increasing to 0.51 TP3T in attractive locations;
• commercial facilities – 0.4%, adapted to the type of activity.

Valuations are conducted by the tax office using official pricing maps. Owners may request a revaluation within 30 days of receiving the decision if they have any concerns about the amount.

Real estate market - forecasts 2025

In recent years, the share of foreigners in the market has increased significantly – they are currently purchasing real estate in Croatia, accounting for over a third of buyers. After the country joins the OECD (planned for 2026), a further influx of foreign buyers is expected, especially from countries such as the United States or Canada.

The expected changes to the law are to equalise the rights of OECD citizens with those of EU citizens, with the exception of agricultural land, which will still be subject to ownership restrictions.Increased investor activity may impact real estate prices, particularly in tourist-friendly locations where developed tourist infrastructure increases investment attractiveness.

Experts expect property values in cities to stabilize, while in coastal regions price pressure may persist, increasing the average price per square meter. While the entire purchasing process will remain simple for EU citizens, it will be necessary to keep track of local regulations, which may vary between individual administrative units.

FAQs:

1. Do the new regulations affect people interested in purchasing real estate for tourism purposes?

Yes, from 2025, short-term rentals require the consent of the co-owners and the approval of the neighbors. This is a significant restriction, especially in coastal property locations, where the number of tourists is growing year by year and housing communities are gaining greater influence over the use of the building.

2. How is the procedure for purchasing an apartment by private individuals changing?

The entire process has been streamlined and depends on the property type and intended use. A lower tax rate applies to purchases of permanent residences than for rental properties. New requirements for community approvals have also been introduced, which means more formalities at the planning stage of the purchase.

3. What rules apply to companies planning to invest in real estate?

Foreign companies must operate in accordance with the OECD Guidelines for Multinational Enterprises, which includes transparency, legality of investment, and compliance with local regulations. This applies particularly to companies interested in purchasing commercial real estate or building in tourist cities and regions.