CROATIA - GORGEOUS COUNTRY FOR PROPERTY BUYERS

Croatia, stretching along the Adriatic coast, borders Slovenia, Hungary, Yugoslavia (Serbia and Montenegro) and Bosnia and Herzegovina. The conflicts created during the 1940s, and continued during the ‘90s, have now ended. Today, Croatia is a more stable country which has membership to the World Trade Organisation and is also on the fast track to EU membership. A formal application was submitted and accepted in February 2003 and Croatia may therefore be able to join around 2007/8.

The country’s economic, cultural and administrative centre sits on the north bank of the river Sava in Zagreb, which has a labyrinth of picturesque cobbled streets that link the city’s beautiful and grand monuments including the cathedral, St Mark’s Church and a number of significant 19th-century public buildings such as Glavni Kolodvor, the main train station. The jewel in the crown of Croatia is often considered to be Dubrovnik, best known for its well-preserved historic centre contained within 13th-century walls.

Many tourists and those in search of a holiday home will undoubtedly head for the coast in search of their dream property. Istria is the largest peninsula on the Croatian coast and because of its good transport links with Italy and Austria has also become the country’s major tourist destination. Croatia’s largest port is called Rijeka in Kvarner. Of the many islands scattered throughout the Kvarner Bay, Krk is the most developed as well as the largest with good beaches and tourist facilities. Split in central Dalmatia is Croatia’s second largest city although nearby the tiny medieval city of Trogir is a UNESCO World Heritage Site. Northern Dalmatia has an historic centre which is made up of narrow cobbled streets, some Roman remains and several interesting churches. For secluded beaches away from the tourists’ hubbub, there are a group of tiny traffic-free islands known as the Elaphites and in the nearby island of Mijet, the national park offers an indigenous forest and two interconnected saltwater lakes.

Although often ignored by travellers, inland Croatia holds plenty of attractions, most notably Zagreb as well as Zagorje, a rural area of hills and vineyards north of the capital. South of Zagreb is the UNESCO-listed Plitvice Lakes National Park, featuring 16 beautiful lakes, waterfalls and numerous hotels although tourism development has been restricted in line with strict environmental preservation policies.

The Croatian property market is still very much in its infancy. The rapidly emerging but unspoilt coast has grabbed the attention of British buyers who are on the lookout for a bargain. Reports of one-bedroom apartments being sold for Ł30,000 have whetted the appetite of those who have been priced out of more expensive European countries. However, “buyer beware” as there are only a few estate agents and regulation is limited so make sure you find one you can rely on. In terms of buying property, due to mass migration during the war years, the original ownership of many properties have dubious pasts so you must ensure that the title deeds have been thoroughly checked. As property is also passed from generation to generation, check that you are actually buying from the person whose name is on the title deeds. When buying a property, remember that fees for purchasing are in the region of 10%, which includes about 5% property transfer tax and legal fees and 2-3% fees to the agent.

Investors should take note that the property market has performed very well over the last year with reports showing gains of between 20-30%; this can only continue if, as expected, Croatia joins the European Union.

After you’ve found your dream home in Croatia, permission to buy a property must be granted by the Ministry of Foreign Affairs (MFA) before a purchase contract can be finalised. This can take anywhere from three to 12 months so bear this in mind when considering your time scale. The MFA will request the following documents when seeking approval to purchase property in Croatia: a written request signed by the petitioner, the sales contract, an excerpt from the Land Book for the property and proof of citizenship for both buyer and seller. Once the sales contract is prepared, a 10% deposit is paid to the Notary Account. The contract signed by the vendor together with the information is sent to the Ministry for Foreign Affairs requesting permission to purchase. Once this letter is received, the contract is signed by the purchaser and the balance of funds is paid to the Notary Account.

Although you are able to purchase a property in Croatia, it is not yet possible to get a mortgage, which is why buyers opt for alternative routes of financing their home such as re-mortgaging an existing property. However, this may change in the future so keep your eyes open for the latest reports.

BROKER, real estate agency team.