Limitations to Foreigners
1. Are there in your national system any limitations to foreigner citizens or foreign companies/companies controlled by foreign citizens regarding the acquisition of immovable properties? If yes:
1.1. Which legal regulations regulate in your country the prohibitions or limitations for foreigners’ acquisitions in case of transfer of property? Please specify the legal regulation and/or the range of the regulation that contains the prohibition.
The acquisition of real estate ownership rights by foreign citizens in the Republic of Croatia is regulated by the Law on Property and Other Real Rights, Part Eight – Real Rights of Foreign Persons, Articles 354 to 358b. («Official Gazette», number 91/96, 68/98, 137/99, 22/00, 73/00, 129/00, 114/01, 79/06, 141/06, 146/08, 38/09, 153/09, 143/12, 152/14, 81/15 and 94/17).
If the consent of the minister responsible for judicial affairs of the Republic of Croatia is required for the acquisition of real estate ownership rights, a legal transaction aimed at acquiring that ownership right is null and void without the consent of the minister responsible for judicial affairs. The competent minister decides on the granting of consent for the acquisition of ownership rights at the request of a foreign person who intends to acquire ownership of a certain real estate or a person who intends to dispose of that real estate. A foreign person who has been denied consent to acquire ownership rights to real estate cannot repeat the request for consent to acquire ownership rights to the same real estate before five years have passed from the date of submission of the rejected application.
A foreign person cannot be the owner of real estate located in an area that, for the purpose of protecting the interests and security of the Republic of Croatia, has been declared by law to be an area where foreign persons cannot have the right of ownership, unless otherwise stipulated by law. A foreign person who acquired the right of ownership of real estate before the area where the real estate is located was declared the above-mentioned area, the right of ownership of that real estate ceases, and he has the right to compensation according to the expropriation regulations. If a foreign person cannot acquire ownership of real estate in the above-mentioned area, which he would otherwise have acquired through inheritance, he has the right to compensation according to the regulations on expropriation, as if the real estate was taken from him in the process of expropriation.
Real estate for which a foreign person’s right of ownership has ceased, as well as real estate that a foreign person cannot acquire by inheritance, becomes the property of the Republic of Croatia, which is liable for compensation. The heir exercises the right to compensation according to the regulations on expropriation, on the basis of a valid decision on inheritance, which established this right for him. Liens and other security in rem that encumbered the real estate encumber the compensation acquired by the heir. Other real rights of third parties that encumbered the real estate do not cease. The aforementioned also applies to other real estate that foreign persons cannot acquire by inheritance.
1.2. What do these limitations consist of?
Foreign nationals from outside the EU, the Republic of Iceland, the Principality of Liechtenstein, the Kingdom of Norway and the Swiss Confederation can acquire real estate ownership in the territory of the Republic of Croatia, under the assumption of reciprocity, if consent is given by the minister responsible for judicial affairs of the Republic of Croatia, and they cannot be the owner of real estate located on an area that, for the sake of protecting the interests and security of the Republic of Croatia, has been declared by law to be an area where foreign persons cannot have ownership rights, i.e. in accordance with the Agricultural Land Act, they cannot be holders of ownership rights to agricultural land. It should be noted that the holders of rights on agricultural land cannot be citizens of the Republic of Iceland, the Principality of Liechtenstein, the Kingdom of Norway and the Swiss Confederation. It is emphasized that there are also additional restrictions for individual states, depending on the conditions that exist when determining reciprocity by state, which are published on the website of the Ministry of Justice and Public Administration:
1.3. Do these limitations apply to any foreign citizen, regardless their nationality, or only to non-EU Members national citizens?
Restrictions related to the obligation to obtain consent for the acquisition of real estate ownership rights in the territory of the Republic of Croatia apply to all citizens outside the EU, the Republic of Iceland, the Principality of Liechtenstein, the Kingdom of Norway and the Swiss Confederation. Limitation of acquisition of agricultural land to foreign nationals are applied outside the EU. Additional restrictions for individual countries, depending on the conditions that exist when determining reciprocity, are published by country on the website of the Ministry of Justice and Public Administration:
1.4. Do these limitations have?
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- A defensive/protective purpose
- An economic purpose
- «Both economic and defensive/protective purposes«
- Other purposes (please specify)
2. To which kind of land registry unit do these limitations apply? (Example: only land plots, only rural areas, only foreign borders, dwellings and homes, other buildings?
Restrictions related to the obligation to obtain consent for the acquisition of real estate ownership rights in the territory of the Republic of Croatia apply to all citizens outside the EU, the Republic of Iceland, the Principality of Liechtenstein, the Kingdom of Norway and the Swiss Confederation. Restrictions for foreign citizens from outside the EU refer to the prohibition of acquiring agricultural land, the size of the land. Additional restrictions for individual countries, depending on the conditions that exist when determining reciprocity by country, are published on the website of the Ministry of Justice and Public Administration:
3. To which kind of transfers or burdens do these limitations apply? (Example: to every transfer, non-free transfers, differently in case of inheritance than in case of purchase, mortgages in favor of foreigners….)
In order to acquire the right of ownership of real estate in the Republic of Croatia, the consent of the Minister responsible for judicial affairs of the Republic of Croatia is required for any legal transaction aimed at acquiring that right of ownership (e.g. sales contract, gift contract, lifetime maintenance contract).
4. Apart from the previous limitation to acquisition of property by foreigners, are there any other measures at your country relevant for this topic? (Example: pre-emption rights in case of purchase un favor of a foreigner, social or residential measures bases on nationality and non in residential permits….)
Within the scope of the Ministry of Justice and Public Administration, there are no other relevant measures on the subject of restrictions on foreign nationals in connection with the acquisition of real estate, and we refer you to the regulations under the jurisdiction of other ministries in the Republic of Croatia.
5. To what extent the land registrars’ controls in a deed of transfer the prohibitions imposed to foreigners to acquire land and buildings in your country?
5.1. Do you only check if the transfer administrative authorization requirement is met, or do you also confirm that the authorization is valid? For example, do you consider property type, like rural or forestry classification, which might limit foreign transfers? Or do you verify the percentage of foreign land ownership in a specific area, especially if there are restrictions on the number of buyers or land size?
Non-EU citizens in the Republic of Croatia cannot acquire agricultural land determined by a special law and protected parts of nature according to a special law.
The percentage of foreign land ownership in a certain area is not checked.
5.2. What would happen if an authorization were needed, and it does not come with the title submitted for registration?
According to the Land Registry Law, the court, after reviewing the proposal for registration and attachments, will allow registration if:
a) It is not evident from the land register that there would be an obstacle to that registration regarding the subject of registration.
b) There is no reason to doubt whether the persons against whom registration is requested are capable of disposing of the object to which the registration relates, nor whether the person who submitted the proposal is authorized to do so,
c) The validity of the proposal results from the content of the submitted documents.
d) Documents have the required form.
In case of submission of an irregular proposal and a proposal that does not have all the attachments necessary for making a decision on the merits of the proposal, the court will reject the proposal.
5.3. What would happen in case a deed of inheritance in favor of a foreigner transfers property over land or buildings subject to limitations for foreigners’ acquisitions in your country?
If a foreigner cannot be the owner of real estate located in an area that, for the purpose of protecting the interests and security of the Republic of Croatia, has been declared by law to be an area where foreign persons cannot have ownership rights, and which real estate would otherwise have been acquired by inheritance, he has the right to compensation according to the regulations on expropriation, as if that real estate was taken from her in the expropriation procedure.
5.4. If the states have preemption right in case of transfer, would you reject the registration if no notification to the state to enhanced it right is done?
In the Republic of Croatia, when registering real estate in the land register, there is no right of priority of a specific state in the case of transfer.
6. Do you expect any legal modifications on this issue?
The Plan of Legislative Activities does not foresee changes to the Law on Property and Other Real Rights.
