First-Home Tax Refund: Everything You Need to Know About the New Act on Socially Subsidised Housing Construction
At a time when property prices have been rising for years and young people find it ever harder to get a home of their own, the state has finally made a concrete move. The Act on Socially Subsidised Housing Construction, passed by the Croatian Parliament, opens the door to a new wave of assistance for citizens buying their first property – in the form of a refund of 50% VAT or of the entire real estate transfer tax.
For many, this is not just administrative news – it is hope. But how do you actually claim this support, who is eligible, and when does the money really land in your account?
Who is eligible for the tax refund?
To qualify for the refund, you must meet several key conditions. The most important are – being a citizen of the Republic of Croatia and having a property purchase agreement concluded after 1 January 2025.
You must also be under 45 years of age and register your permanent residence at the property you are buying – together with all members of your immediate family. In other words, this support is intended for genuine occupants, not for investors buying “to resell”.
Another condition concerns tax: you must have paid the real estate transfer tax or hold an invoice showing VAT issued after 1 January 2025. These documents are the basis for claiming the refund.
Which documents are required?
The application is submitted to the Agency for Legal Transactions and Brokerage in Real Estate (APN), at Savska cesta 41 in Zagreb. Along with the prescribed form, you need to attach:
- a copy of your ID card,
- the residential property purchase agreement,
- a land registry extract (zemljišnoknjižni izvadak),
- a certificate of residence (no older than 30 days),
- proof of payment of the tax or VAT,
- the account number for payment of the subsidy.
If you are building a family house, you must also submit the occupancy permit, the construction contract and invoices certified by the supervising engineer. All documents must be submitted as copies, and the signature on the application must be notarised.
When should you apply, and how long does the payout take?
Applications opened on 5 June 2025, and the submission deadline is 24 months from the date of the sales contract. In other words, there is no need to panic – but there is a need to get organised.
According to the Ministry of Physical Planning, Construction and State Assets, payment takes between 30 and 90 days from the submission of complete documentation. In ideal cases, the refund can be paid out within three months – which is very quick by Croatian administrative standards.
Who cannot claim a refund?
The tax refund applies only to a first residential property. If you already own an apartment or house that is considered “adequate” for living (with infrastructure, utility connections and a minimum floor area), you cannot claim the right.
Also, if you have already used state subsidies such as APN, you are not entitled to a refund. However, if you owned a smaller property (e.g. a studio apartment under 35 m²) and decided to sell it and buy a larger one, you can keep the right, provided that you sell the old property within 24 months.
How is the refund amount calculated?
The calculation is based on the property's floor area, the number of household members and the average price per square metre published by the Ministry of Construction for each local government unit.
If the contract price is higher than the average, the refund is calculated at the average price. If it is lower, it is calculated at the contract price.
For family houses, the recognised floor area may be increased by up to 50%, depending on the number of household members. However, the refund does not apply to luxury properties or buildings exceeding a reasonable market price – which is how the state aims to prevent abuse of the system.
Why is this law important?
This law is not just a tax relief – it is a signal of the state's social responsibility towards young people. For decades, Croatia has been losing young families due to high housing costs and an unregulated property market. A tax refund may not solve everything, but it can be the start of change – the moment when buying a first home becomes attainable again, rather than a luxury.
Conclusion: Time for young people to breathe easier
Buying your first property is one of the most important moments in life. The Act on Socially Subsidised Housing Construction now makes this step more accessible and secure. If you meet the requirements, the tax refund can be the key that unlocks the door to your home.
Prepare your documents, get informed in time and submit your application without delay. Because every square metre that becomes a home is worth more than numbers and laws.