Sell Tax-Free After Just 2 Years? 5 Things You Should Know About Property Taxes in Croatia

Dreaming of an apartment by the sea or a house overlooking the Adriatic? Then you have surely already asked yourself: what will this cost me in taxes – when I buy, year after year, and one day when I sell?

The answer may pleasantly surprise you. We have picked out the five most important tax facts for you and compared them directly with Germany, Austria and Italy.

1. Did you know you pay only 3% real estate transfer tax when you buy?

If you buy a resale property in Croatia, you pay a one-off 3% real estate transfer tax on the market value. If you buy a new build directly from a developer that operates as a company, you pay no transfer tax at all. Instead, 25% VAT applies, which is normally already included in the price.

For comparison: in Germany, depending on the federal state, you pay from 3.5% (Bavaria) to 6.5% (for example North Rhine-Westphalia). In Austria it is 3.5% plus a 1.1% land registry fee. In Italy, a second home is subject to 9% registration tax, but on the cadastral value.

2. Did you know your holiday apartment in Zadar may cost only around €42 a year in tax?

Since 2025, Croatia has had an annual property tax of €0.60 to €8.00 per m² of usable floor area. The exact amount is set by the municipality or town. If you live in the property permanently or let it long-term for at least 10 months a year, you pay nothing.

The City of Zadar opted for the lowest possible amount: €0.60 per m². For a 70 m² holiday apartment, that is €42 a year.

3. Did you know you can sell a property tax-free after just two years?

This is probably the biggest difference from Germany. If you sell your property in Croatia more than two years after buying it, you pay not a cent of Croatian tax on the gain.

If you sell earlier, 24% is due on the gain. If you lived in the property yourself, or transfer it to your spouse or close family members, the sale is exempt even before two years have passed. Important: anyone who sells more than three properties of the same type within five years pays tax regardless of how long they owned them.

And in Germany? There you wait ten years for the so-called speculation period to end; before that, you pay tax at your personal income tax rate of up to 45%. In Austria, 30% tax on real estate gains applies regardless of how long you have owned the property, except for a main residence. In Italy it is 26% if you sell within five years.

4. Did you know you effectively pay only 8.4% tax on rental income?

If you let long-term, the Croatian Tax Administration recognises a flat 30% for costs. You pay 12% tax on the remaining 70%, so effectively 8.4% of the gross rent.

If you let to tourists, you pay a fixed annual flat fee per bed: from €20 to €300 depending on the municipality, €100 in Zadar.

In Germany and Austria, rental income is added to your total income and taxed at rates of up to 45% and 55% respectively.

5. Did you know your children inherit property in Croatia tax-free?

If your spouse, children or parents inherit the property or receive it as a gift, no tax is due under Croatian law. Other heirs pay 3%.

Everything at a glance

Tax	Croatia	Germany	Austria	Italy
Purchase tax (resale property)	3%	3.5–6.5% depending on the federal state	3.5% + 1.1% registry = 4.6%	9% of cadastral value (second home)
Annual property tax	€0.60–8.00/m²; none for permanent residence or long-term let	annual property tax, set by the municipality	annual property tax, set by the municipality	property tax 0.86–1.06% of cadastral value
Tax on sale gains	0% after 2 years; earlier 24%	0% only after 10 years; earlier up to 45%	30%, regardless of holding period	26% within 5 years
Long-term rent	12% on 70% of rent = 8.4%	progressive, up to 45%	progressive, up to 55%	21% (flat tax on rent)

Good to know before you buy

Germany and Austria have double taxation treaties with Croatia. Under them, income from property in Croatia may be taxed in Croatia.

Local tax amounts are set by towns and municipalities and may change. For tax obligations in their home country, we recommend that buyers have a short talk with a tax adviser.

Our tip

Taxes are not the only reason to buy a property by the sea, but they are a pretty good one. Low purchase and holding costs, plus the option to sell tax-free after just two years, make your investment in Croatia especially flexible.

Want to know more?

Explore other useful topics on our real estate blog or, if you need assistance with buying or selling a property, send us an enquiry.

Contact us

Emporia Real Estate – Zadar, Ulica Svetog Vinka Paulskog 32, 1st floor, 23000 Zadar, Croatia, +385 23 300 000