Foreign Nationals as Property Owners in Croatia

Acquiring Property Ownership Rights for Foreign Persons in the Republic of Croatia

Are you planning to buy a property in the Republic of Croatia and wondering which conditions you must meet to become its owner? Acquisition of ownership is a legal institution known in all European countries. Likewise, if you have inherited a property in Croatia on the death of the deceased, this article will explain the additional conditions that must be met for you to become its owner.

Requirements for Acquiring Property Ownership

The legal system of the Republic of Croatia grants foreigners the same capacity to acquire property ownership rights in the Republic of Croatia as Croatian citizens, but subject to general and special requirements, and additional restrictions apply to foreigners. Under the provisions of the Ownership and Other Real Rights Act (Official Gazette 81/15), a natural person is considered a foreigner if they do not hold Croatian citizenship, and a legal entity if it has its registered office outside the territory of the Republic of Croatia. For foreign persons to become owners of a property in the Republic of Croatia, the general requirements must first be met, namely that the property is capable of being an object of ownership rights; for example, foreign persons cannot acquire ownership of agricultural land or forest land. The acquirer must be capable of acquiring ownership, and there must be a valid legal basis for the acquirer to obtain ownership of that property. Since ownership can be acquired on the basis of a legal transaction, a court or other competent authority decision, inheritance, or by operation of law, additional requirements are prescribed for foreign persons acquiring property ownership in the Republic of Croatia, depending on the legal basis of acquisition.

Acquiring Ownership by Inheritance

For Croatian and foreign persons to acquire ownership of real estate by inheritance, special conditions must be met in addition to the general ones. The previous owner of the property must have died, the property must form part of the deceased's estate, and the acquirer must be a statutory or testamentary heir of the deceased. However, for a foreign person to become the owner of real estate in Croatia, a further condition applies in addition to the general and special requirements: reciprocity must exist. The reciprocity criterion means that a foreign legal entity or individual may acquire ownership of real estate by inheritance only if Croatian legal entities and individuals may acquire ownership by inheritance under the law of the country to which that foreign person belongs. Since the existence of reciprocity in inheritance matters is presumed unless proven otherwise, a foreign person acquires ownership of the property at the moment of the deceased's death, and protects their ownership against third parties by registration in the land registry (zemljišne knjige). An exception applies where, in order to protect its interests and security, the Republic of Croatia declares by law a certain area to be one in which foreign persons cannot hold ownership rights. A legal entity could not acquire ownership of real estate in such an area by inheritance, and is entitled to compensation under the regulations on expropriation, as if the property had been taken from it in expropriation proceedings.

Acquiring Ownership Through a Legal Transaction

Croatian and foreign individuals and legal entities acquire ownership of real estate if, in addition to the general conditions, the special ones are also met. The property must have been acquired on the basis of a valid legal transaction, for example a valid purchase agreement; the person selling the property must be its owner; and the ownership right must be registered in the land registry. However, for foreign persons, in addition to the reciprocity criterion, a further condition applies: the acquisition must be approved by a public authority. A foreign person who intends to acquire ownership of a particular property in the Republic of Croatia, or a person who intends to dispose of such a property by a legal transaction, must request the consent of the minister responsible for justice. In the consent procedure, which always relates to a specific legal transaction, the request must be accompanied by the legal basis for acquiring ownership of the property, for example the purchase agreement and a land registry extract.

The minister examines whether the conditions for the validity of the legal transaction have been met, above all whether the property can be the object of ownership rights and whether a foreign legal entity or individual can acquire ownership of that property. Once consent to the legal transaction has been obtained, the foreign person can have their ownership registered in the land registry. It is important to note that if consent is refused, the foreign person cannot submit a new request for consent to acquire ownership of the same property until 5 years have passed from the date the rejected request was submitted.

Properties on Which Foreign Persons Cannot Acquire Ownership

Foreigners are completely excluded from acquiring ownership of: properties located in an area that has been designated, for the protection of the interests and security of the Republic of Croatia, as an area in which foreigners cannot hold ownership; agricultural land under the Agricultural Land Act; forests and forest land under the Forest Act; and protected natural areas (national parks, nature parks and the like) under the Nature Protection Act. Property acquired in such an area would become the property of the Republic of Croatia, and the foreign person would be entitled to compensation under the regulations on expropriation, as if the property had been taken from them in expropriation proceedings.