Croatia is appealing not only for its picturesque nature and seaside climate, but also for its favourable conditions for foreign investors. In this article we will look at the reasons why it is worthwhile to invest in a property in Croatia, how to buy a property in Croatia (or part of one), and how to minimise the associated risks. Whether you are looking for your second, summer home or an investment opportunity, this guide will help you go through the whole process with confidence and peace of mind.
Why invest specifically in Croatia?
Investing in a property abroad in general can bring a whole range of benefits – when you know how to do it. An apartment or a house in Croatia by the sea can be your second home for regular family holidays all year round; however, given how the Croatian real estate market is developing, it may perhaps be even more advantageous to view it as a stable investment. Thanks to the tourist traffic and the potentially high demand for short-term rentals, you can generate a decent regular income – and possibly sell it for much more in a few years.
TIP: Not sure how to get started with investing? Read the basics of investing for beginners.
The appeal of the Croatian real estate market
The Croatian real estate market is in a period of flourishing. While property prices here have been rising in recent years, they are still more affordable than in some other European destinations. The appeal of this market grew even more from 1 January 2023, that is, from the date of the adoption of the euro, which makes it easier for foreign investors to enter this market and simplifies doing business for them.
For you, this means that if you want to profit from this growth, now is the right time.
This country offers a varied range of properties: from affordable apartments to more expensive luxury villas by the sea. Thanks to its beautiful coastline, pleasant Mediterranean climate and ever-growing tourist traffic, it attracts foreign investors and buyers from all over the world.
Popular destinations in Croatia
The most popular destinations for buying property include Dalmatia, Istria and Dubrovnik, but less well-known destinations are also gaining popularity, such as the island of Ugljan. Each of these areas offers unique advantages, from beautiful beaches and gorgeous nature to a rich history and culture.
Factors to consider before buying a property
Location, the property's purpose and economic stability
What do you expect from your property in Croatia? Do you want to use it for short-term rentals, or as your second home? The priority factors will be location, the availability of services and tourist potential; however, for rentals you will require proximity to the beach, high availability of services and high tourist potential, whereas for a purchase for your own use rather the opposite.
Why? A house on the beach is more demanding in terms of maintenance; in winter you have to invest more in heating and so on. And if you want to enjoy a holiday without stress, you will probably also want to avoid places teeming with tourists.
We have compiled general tips for a safe property purchase in a blog article.
The legal process when buying a property
If you want to buy a property in Croatia, be aware that this brings with it certain legal obligations. One of the best options is to work with local real estate agents and lawyers, who will help you meet all the current legal requirements and minimise the risks.
Alternative ways of investing
For smaller investors, investing through the InvestBay platform, which offers the concept of micro-investing in real estate and the option of crowd-owning, can be attractive.
We at InvestBay have also succumbed to Croatia – and it paid off for us! Take a look at how, in 2023, we financed Exclusive Green Resort Zelena Punta, where we counted on:
- 15% annual growth in rental income
- 15% expected increase in the property's value
- 75% growth in property prices in Croatia over 8 years
- 12% growth in stays by US residents in Croatia
How does it work at InvestBay?
At InvestBay we bring an opportunity for everyone who wants to invest in real estate without having to have millions in their account. We combine the best of crowdfunding and ownership of a physical property – so-called crowdowning.
Has this way of investing caught your interest? Take a look at the offer of current investments, read about how InvestBay works and feel free to invest today! You can start from as little as CZK 2,500, while there is no upper limit on the size of the investment or on the number of repeated investments.
5 tips for foreign investors on the Croatian real estate market
1. Find out the legal conditions for buying property as a foreigner
Croatia allows EU citizens to buy property under the same conditions as local residents. If you come from a country outside the EU, check whether there is a bilateral agreement between Croatia and your country that would entitle you to buy property. Before signing the contract, it is important to verify the ownership of the property and whether it has any debts or legal restrictions.
2. Work with a local real estate agent
A professional real estate agent who knows the local market, legal procedures and the language can save you time and reduce the risk of complications. Moreover, Croatian law requires property transactions to take place through registered real estate agencies, which provides investors with a higher degree of protection.
3. Prepare for cultural and language differences
Croatian is the official language, but many Croats speak English, especially in tourist areas. If you do not speak the local language, it is a good idea to have a translator who will help you when communicating with state authorities, lawyers or construction companies. In negotiations, bear in mind that the local culture prefers personal meetings and trust built up gradually.
4. Research the market and the location
The Croatian real estate market differs significantly by region. Areas such as Dalmatia, Istria and the islands are very popular among foreign investors because of their tourist potential. By contrast, more favourable prices can be found in less well-known regions. Make sure the region you choose matches your investment goals – whether it is renting, recreation or long-term appreciation.
5. Set aside a reserve for taxes and fees
When buying a property in Croatia, you usually pay a property transfer tax of 3 %. Add to that the costs of a lawyer, a notary, a translator and any fees to the real estate agency. For renovations or renting out a property, find out whether you need a building permit or a trade licence.
Summary and next steps
Investing in a property abroad is a great opportunity to combine the joy of owning a second home with a smart investment. Careful planning and working with experts are key to success. Trends suggest that interest in properties by the sea will continue to grow, which opens up new opportunities for investors. Get stuck into it today with the help of us, the experts at InvestBay, for an even simpler and safer entry into the world of real estate.
Is there something else you would like to know about InvestBay? Take a look at the Frequently asked questions.
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