Can A US Citizen Purchase Property In Croatia?

In 2019, more than 600,000 Americans visited Croatia. Many have fallen in love with Croatia and wonder: Can Americans buy real estate in Croatia?

• YES. However, it is easier for EU citizens to buy property in Croatia. Yet, residents of several US states need to meet more requirements than the residents of some other US states.
• Foreigners are still (until 2023) officially not allowed to purchase agricultural property in Croatia. However… there’s a legal loophole.
• If you’re thinking about buying property in Croatia, you absolutely need assistance of an experienced lawyer or a realtor. Or else, you’re destined to fail.

US Citizens And Real Estate In Croatia

U.S. citizens may, under condition of reciprocity, acquire real property in Croatia either by inheritance or by other legal transactions such as purchases, deeds, trusts, etc. Reciprocity is presumed to exist unless proof to the contrary becomes evident.

According to the data accessed in November 2020, the reciprocity exists for the following US states:

Alabama, Arizona, Alaska, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas,Louisiana, Maine, Maryland, Massachusetts, Michigan, Missouri, Montana, Nebraska, Nevada, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, Washington, West Virginia, Wisconsin and Wyoming;

For the following states, permanent residence is required: Arkansas, Hawaii, Kentucky, Minnesota, Mississippi, New Hampshire, Oklahoma and Vermont.

For example, anyone can own property in Hawaii, even people from foreign countries.  However, foreign owners may not be able to live in the property without a green card.  Croatia would make the same requirement for anyone from Hawaii wanting to buy property in Croatia.

There is an additional requirement concerning non-EU citizens. Only citizens coming from countries with which Croatia has reciprocity in acquiring the ownership rights of their nationals may go to administrative proceedings and seek the consent of the Ministry of Justice.

Purchasing Agricultural Land In Croatia

In June 2020, Croatian Minister of Agriculture, Marija Vučković, assessed that the three-year extension of the moratorium on the sale of Croatian agricultural land to foreigners is an important decision.
The importance of this decision lies in the fact that the Croatian farmer is not yet strong enough to be able to participate on an equal grounds with foreigners in opportunities to purchase agricultural land.

On 16 June, the European Commission (EC) adopted a decision extending the transitional period during which EU citizens cannot acquire ownership of agricultural land in Croatia, and this decision was published on 17 June, in the Official Journal of the European Union.

The transitional period, which expired in June 2020, was set to prevent the rise in prices of agricultural land in Croatia after EU accession, which could occur due to higher purchasing power of citizens of individual member states. This would make it more difficult for Croatian farmers to acquire agricultural land and slow down the necessary restructuring of the agricultural sector, the relevant ministry explains.

The Accession Treaty provides for the possibility of extending the seven-year transitional period for an additional three years, if it turns out that the Croatian agricultural land market is still not stable enough and that there is still a risk of a significant price increase if opened to foreign nationals.

In a statement to the press, Vučković reminded that the Ministry submitted the official request on November 15, 2019, and it was made on the basis of data obtained from the State Geodetic Administration, the Central Bureau of Statistics, the Ministry of Justice, the Ministry of Administration and the Agricultural Paying Agency.

The request for extension, as she said, was approached because “conditions have not yet been achieved that would put our potential buyer of agricultural land, and such is our focus, which is here and will remain there, on an equal footing with other residents of the European Union “.

Although there is progress on key indicators, which show that the gap in purchasing power between EU and Croatian citizens and the price of agricultural land is narrowing somewhat, and although the process of demining agricultural land has improved significantly, as has the return process, the Croatian farmer is not yet empowered enough to participate on an equal footing in opportunities to buy agricultural land, she said.

In three years, we will ensure the equal position of Croatian citizens and farmers

“The purchasing power of Croatian citizens is rising and we think that in these three years, with certain changes in the program and even regulations related to land, we can ensure an equal position of Croatian citizens and farmers, ie residents of rural areas,” she said.

She also commented on the comments that foreigners can already buy agricultural land and that this decision of the EC is more of a “fairy tale” than an important fact.

In Croatia, agricultural land can be bought if someone establishes a legal entity, ie a company or in accordance with some other international agreements, but under the condition of reciprocity – what is valid for a foreigner in Croatia must be valid for a Croat in his country. It is not the same when a legal entity establishes a company, because that company has to do business, employ and pay taxes here, or when someone without a seat and residence can buy agricultural land”, she explained.

Consequently, other non-EU nationals coming from countries with which the Republic of Croatia does not have the principle of reciprocity in acquiring ownership of real estate of their citizens may not, as natural persons, purchase real estate in Croatia.

Similar option is available for residents of certain US states that do not have the reciprocity agreement with Croatia. They may decide to set up a company (most often it is a limited liability company or abbreviated d.o.o.) in Croatia and as owners of companies with headquarters in the Republic of Croatia, they are entitled to acquire ownership of the real estate.

It is necessary to know that the owner of the purchased property is then the company, not the owner of the company himself.

“It is good that we have fought for this transitional period that will strengthen our people and ensure that agricultural land is leased or bought by those who will really live there and create be it natural or legal persons,” she said.

Asked if the deadline could be extended after three years, she said it could not.

But, you may wonder, why would a foreigner buy agricultural land in Croatia? The answer might shock you: TO BUILD A HOUSE! Wait a minute! Is that allowed? Well, it isn’t. Still some people do it. And seem to get away with it. This is one of the reasons why…

You Absolutely Need A Lawyer

Why? Because of numerous loopholes and traps found everywhere.

For example, about a million houses in Croatia were built illegally, without a building permit.

Then the Government decided to allow these houses to be LEGALISED.

Finally, it turned out that it was CHEAPER to build a house illegally. So those who had all the necessary documents to build a house actually paid MORE than those who did what they wanted, how they wanted, where they wanted and when they wanted.

For example, some built their house right at the beach, contrary to all plans. Yet, as ALL the house were legalised, the government CHANGED the building laws and urban construction plans to ADJUST to ILLEGAL constructions.

June 2018 was the deadline for the cheap and almost condition-free legalisation of illegal buildings.

However, you can STILL keep legalising your house in Croatia under certain conditions.

This would be a criminal activity in most countries. But not in Croatia!

So some make a house or villa with swimming pools in the middle of agricultural land. Or still build their house at the beach. Or turn their houses in the countryside into houses with apartments for rent.

One person I know build a house at the waterfront, right on the street leading to the beach, blocking the access to the beach. A sign was put up by the government officials to remove the house. Yet, the owner simply – removed the sign! And apparently got away with it!

This is just one of the reasons why an experienced lawyer (or realtor) is important, to help you maneuver through Croatian Law and its application in everyday life.