Renting property in Croatia is an attractive option for many owners who want to use their property to generate passive income. However, before starting to rent it is important to familiarise yourself with the tax obligations and administrative steps involved.
Powers tax for private landlords
There is a specific tax obligation for private landlords in Croatia. This tax is set on a flat-rate basis and its amount depends on the decision of the local authorities and depends on the region in which the property is located. The flat rate tax ranges between 150 – 300 EUR per year per bed capacity.
VAT and other charges
- Value Added Tax (VAT) – If the rental income does not exceed €39,816 per year, the landlord is not required to register for VAT.
- Tourist tax – Landlords are required to pay tourist tax, which is determined by region and number of nights. The average amount of tourist tax is 1 – 1,50 EUR per person per night.
- Property Categorisation Fee – You will have noticed the blue plaque with the number of stars by the door on the property, which determines the categorisation of the property. You need to get her permission from the local authorities before you start renting. This process of categorising accommodation is chargeable, with fees ranging from €50 to €200, all depending on the quality of the amenities, the location and the type of accommodation.
What do you need to do to rent out your property?
If you want to legally rent out your property in Croatia yourself, you need to complete the following steps:
- Obtain property categorization – Each rental property must be registered and approved by the local authority. This process involves inspection and categorisation of the property.
- Price: €50 – €200
- Register with the tax office – The landlord is required to register as a taxpayer and apply for an OIB tax number.
- Tax the flat tax and tourist tax – It is necessary to pay annually the flat tax for the bed capacity and to pay the tourist tax for the guests.
- Keep a guest register – Landlords are required to register their guests in the eVisitor system (also available in Czech language), which monitors tourist rentals in the country.
- Take out property insurance – Although not compulsory, it is recommended to insure the property against damage or liability caused by guests.
Benefits of a flat tax
- Simple administration – Landlords do not need to keep detailed accounting records of income and expenses.
- Stable tax liability – Regardless of the amount of rental income, the tax is fixed.
- No VAT registration requirement – If you don’t exceed the €39,816 per year limit, you don’t have to become VAT registered.
Renting out property in Croatia can be a profitable business if set up correctly. Compliance with tax and legal obligations is key to avoiding unnecessary fines and administrative problems. We assist our clients with the categorization process and refer them to the local authority where they will complete all the necessary paperwork required to rent out their property.
For information on flat tax for private landlords in Croatia, you can use the following official and professional resources:
- Porezna uprava (Tax Administration of Croatia) – The official site where you can find details about tax obligations, including flat tax and registration as a landlord.
Website: www.porezna-uprava.hr - Ministarstvo turizma i sporta Republike Hrvatske (Ministry of Tourism and Sports of the Republic of Croatia) – A site where you can find information about tourist taxes and the obligations of landlords in the field of tourism.
Website: www.mint.hr - Business and Tax Consultancies – Various consultancies provide specialized services and detailed information on the categorization process, tax obligations and registration. One example is the TAX CONSULTING website.
This site will provide you with all the information you need, including specific tax amounts, obligations and administrative steps to follow when renting a property in Croatia.
