Croatia is an impressive vacation spot. The country is characterized by a long coastline on the Adriatic Sea and convinces with numerous natural backdrops and interesting places. For this reason, it is not only a good idea to take a closer look at the country and the many possibilities for weekend vacations. When buying your own holiday property, it is also worth making use of the diverse surroundings and securing your own small retreat for the stressful phases of everyday life. The following 10 tips will help you get ahead and minimize your risk with every purchase.

1. Look in multiple places

Finding a good property is often not that easy. It is usually advisable to take a look at the Internet to become aware of the local real estate offer. Here you can go on the search for individual locations as specifically as possible in order to find the existing properties and to recognize where possible dream houses are available. If these can be found on multiple platforms, you are usually on the safe side.

Other options for finding the right property are browsing through the synopsis as well as viewing and inspecting the property. However, the latter is difficult to implement in the research phase, which is why the favorites are determined digitally in most cases. You can then contact the seller or the responsible agent to discuss how to proceed.

2. Think long-term and economically

If you are looking for a true dream home in the region of Croatia, you are not only protecting yourself for your own leisure time by buying it. Under certain circumstances, you can also rent out the property afterwards and earn something in this way. Please note, however, that you have to register a business in this way. The sales are then taxable locally, but still count as part of your income in Germany. You should therefore pay attention to the tax exemption limits that are active there as well as those in Germany and plan in advance how high you would like your earnings from the rental business to be.

3. Benefit from a rapid increase in value

Real estate is not only a popular choice in Germany in order to have a stable investment. In other regions too, this is a good measure to benefit from popular vacation spots and to take advantage of the development of a country. For example, purchases in regions that will only become a really popular holiday destination in the coming years are particularly suitable. You benefit from a rapid increase in value, which on the one hand allows you to rent out your house or apartment profitably and on the other hand enables a profitable sale. For this reason, choose the area with a plan and make use of the place.

4. Do not forego a visit under any circumstances

If you would decide on your dream home after more detailed arrangements, you should still arrange for a viewing in advance. This often works best with a realtor to know an unbiased person at the location and be able to ask key questions about the location. So you can look at the location as closely as possible, not only to check the pictures, but to get a positive impression for yourself. Only a personal visit can ensure that the location meets all expectations.

5. The conclusion of the appropriate preliminary contract

Before a successful deal can be concluded, a preliminary contract is usually concluded with a Croatian real estate dealer. With this, buyers and sellers have a set time to meet the existing obligations and, for example, to organize the full purchase amount. The preliminary contract is usually concluded at this point for reasons of time in order to enable the procurement of the papers and to coordinate the further procedure. All important parts of the contract are recorded in the preliminary contract:

• Name and address of both contracting parties
• Proof of creditworthiness of the buyer
• Land register extract for checking the property registration
• Proof of the agreed purchase price
• Full description of the property
• List of additional costs
• Time of property handover

6. Create a structure between the preliminary contract and the sales contract

In order to design the phase between the preliminary contract and the sales contract, you can agree on a fixed period in consultation with the seller. As a rule, this is between one month and 6 months, which leaves enough time to complete all formalities. Only when all the factors have been met can the preliminary contract be converted into a purchase contract in order to change the ownership structure in a legally binding manner according to Croatian law.

7. Note the valid tax law!

When buying real estate legally abroad, different tax obligations apply than in Germany. With Croatian real estate, therefore, note that you have to pay both property transfer tax and property tax and a possible second residence tax. However, if you move permanently to the region of the new house in the future, you do not have to expect such a tax. As a rule, the Croatian tax office is then responsible for collecting the taxes, which is why you cannot avoid visiting the region.

8. More security with a notary

Especially abroad, it is important to secure yourself additionally with the help of a notary. Due to the distance between buyer and seller, two notaries are usually commissioned so that both sides are on the safe side. Before the sales contract is then executed, you as the buyer must also have your passport notarized. Only then are you entitled to sign the contracts that have been drawn up and purchase the new holiday property.

9. You should expect these additional costs

A cheap purchase is not always a bargain, depending on the additional costs. For this reason, you should add around 8 to 10 percent of the purchase price beforehand in order to keep an eye on all additional costs. Specifically, the costs are basically divided into 4 areas that you should consider when buying real estate abroad and specifically in the Croatian area.

Real estate transfer tax - From 01.01.2019 a real estate transfer tax of an additional 3% will be charged on the purchase price. This applies to every real estate purchase initiated by a private person.

Brokerage fee - The brokerage fee also incurs additional costs of 3%. Added to this is the value added tax, which increases the total costs even more.

Legal fees - You should expect additional costs of between 1 and 2% for hiring a lawyer. The Croatian VAT of 25% is also added here.

Notary and administrative costs - The notary fees depend on the services assumed. You can expect different local tariffs within Croatia, which means that you receive an individual offer.

10. Make sure you have a full check

Before you finally sign a sales contract, all important facts of the agreement should be checked again. This ensures that you are contractually on the safe side and that both you and the seller meet all agreements. For this reason, check the existing building permits again and avoid running into problems after assuming responsibility. An examination of the ownership structure is therefore also a good idea to ensure the legality of the sale and to ensure that the purchase of your dream property in Croatia does not turn out to be a flop.