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Taxes for immovable property

When we talk about taxation with regard to immovable property there are two very important things we should make a distinction between:

taxation which is imposed on property as such in property transactions as the result of having property rights to that particular property: Since 1998, when the value added tax (VAT) law came into force in the Republic of Croatia, a tax rate of 22% has been imposed on the newly built properties ( a property built and consigned after 01.01.1998 is legaly and taxably considered to be a new property), while, according to the capital transfer tax law, a tax rate of 5% is imposed on the existing – old properties, fields, building sites and all properties in transaction.

taxation imposed on the earnings (profit) people have in property transactions Taxes imposed on the profit made in the property transaction are regulated by the profit tax law when a legal or physical person, who is a profit taxpaxer, is involved; or they are regulated by the income tax law when a physical person, who is an income taxpayer, is involved.

Legal property transaction is the process of acquiring property rights to a property in the Republic of Croatia.

The process of acquiring property rights to a property is: Purchase and sale, exchange, inheritance, donation, including or excluding a property from a company, acquiring a property in the process of liquidation, acquiring based on a court's or another body's decision and all other ways of acquiring property from an individual. Property transaction does not mean to acquire a newly built property on which taxes are imposed according to the vallue added tax (VAT) law.

A capital transfer taxpayer is a person who acquires a property – a buyer.

The capital transfer tax base is the market value of a property at the moment of acquiring.