Costs of Buying an Apartment: What to Include Besides the Purchase Price

· · Tips for Buyers

When buyers start looking for a home, their budget often stops at the price in the listing. In practice, the costs of buying an apartment are higher than that figure, and those who fail to anticipate them often have to look for extra funds at the last minute or back out of an agreed deal.

The good news is that most items can be estimated in advance. This overview shows what the buyer usually pays, what the seller pays, and what to look out for before signing.

Costs of Buying an Apartment: Property Transfer Tax or VAT

The biggest additional item when buying is usually tax. For an apartment on the resale market, i.e. one bought from a private individual or from a seller who does not charge VAT, the buyer pays property transfer tax at a rate of 3% of the market value. For illustration: for an apartment priced at €200.000, that comes to €6.000.

For a new build sold by a developer registered for VAT, the situation is different. VAT is already included in the price, and property transfer tax is not payable. The two taxes are not applied to the same purchase, but it is important that the offer clearly states whether the stated price includes VAT.

A few more practical notes:

  • The Tax Administration may adjust the tax base if it judges that the agreed price is lower than the market price.
  • The documentation on the property transaction is usually submitted by the notary public, and the buyer subsequently receives the tax assessment decision.
  • Tax relief and refunds for certain groups of buyers change over the years, so check whether they apply to your case directly on the Tax Administration's website or with a professional.

Notary, Land Registry and Agency Commission

The sales contract is signed with certification by a notary public. The cost of certifying the seller's signature is customarily borne by the seller in practice, but the allocation of costs is not strictly regulated. The parties may agree otherwise, and it is best to put such an agreement in writing.

Registration of ownership rights in the land registry (zemljišna knjiga) is paid by the buyer, as they are the one acquiring the right being registered. Court fees and notary charges for the registration itself are generally relatively small amounts compared with the price of the apartment. Still, you should not delay filing the registration application, as a delay may increase the fees.

If you are buying the apartment with a home loan, also allow for additional items:

  • the property valuation required by the bank,
  • notarisation of the loan agreement, the cost of which depends on the loan amount,
  • any fees and insurance according to the bank's terms.

The agency commission is not fixed by law but is agreed in the brokerage agreement. Before signing, ask how much it is, who pays it, and whether it is stated including VAT. A transparent agency will explain this to you at the start, not only when the contract is signed.

Costs After Signing

The cost of buying does not end with registration in the land registry. Many buyers forget that an apartment is rarely moved into as it is. Before moving in, you often have to pay for:

  • minor or major renovations, from painting to replacing installations,
  • furniture and household appliances,
  • moving and any temporary housing costs,
  • apartment insurance and the transfer of utility contracts.

Regular monthly costs include the maintenance reserve fund (pričuva), utilities and upkeep. Before buying, ask the building manager for details on the amount of the reserve fund, the state of the common fund and any planned major works such as facade or elevator renovation. If a major project is planned soon, considerable amounts may fall on the apartment owners.

Also be aware of local differences. Municipal utility fees and certain property taxes depend on decisions of the city or municipality, so they may differ between Zagreb, Split, Zadar and Pula. Look for information on them from the competent local government unit.

How to Put Together a Realistic Budget

The safest approach is to calculate your budget backwards. Start from the total amount you can spend, then subtract all the costs, and what remains is the realistic upper limit for the apartment price.

A simple table with the following items is useful:

  • property transfer tax, or confirmation that VAT is included in the price,
  • notary and land registry costs,
  • agency commission, if it is payable by you,
  • valuation and loan fees, if you are taking out a loan,
  • renovation, furniture and moving,
  • a financial reserve for the unexpected.

Don't skip the reserve. Even with a carefully checked apartment, minor defects, extra paperwork costs or works that cost more than expected can arise. It is therefore better to plan with some room to spare than to rely on the best-case scenario.

Before the preliminary contract, also ask for a written overview of the costs agreed with the seller. This helps you avoid misunderstandings about who pays what, and gives you a clearer picture of the total purchase price.

Conclusion

The price in the listing is only the start of the calculation. When you account in advance for tax, fees, commission and moving-in costs, you approach buying an apartment with more peace of mind and without unpleasant surprises. Exact amounts depend on the type of property, the method of financing and current regulations, so always check them before signing.

If you need help preparing a budget or estimating the total price of a specific property, the Imperium Immobiliare agents in Zagreb, Split, Zadar and Pula will be happy to go through all the items with you, with no obligation.

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