Long-term rental of apartments and houses in Croatia is a common housing solution, especially in urban areas. It offers flexibility and predictable costs without the commitment of purchasing a property. To ensure a smooth rental process, it is important to understand contracts, taxes, and administrative requirements.
What is considered long-term rental
Long-term rental refers to renting a property for residential purposes for a minimum of six months, most commonly one year or longer. It differs from short-term tourist rentals, which are usually arranged on a daily or weekly basis.
Rental agreement - the foundation of security
A written rental agreement is essential and protects both the tenant and the landlord. It should clearly define:
- rental duration
- monthly rent amount
- payment deadlines and method
- deposit amount and return conditions
- responsibility for utilities and communal costs
- condition of the property upon handover
- termination terms
Notarization of the agreement is not mandatory, but it is often recommended for additional legal certainty.
Rental agreement and residence registration
The rental agreement is required for residence or temporary address registration.
A tenant may register their address only if they have a valid legal basis for occupancy, which is a valid rental agreement.
Registration is completed at the competent police administration.
If multiple people live at the address, each person must be registered individually. It is common practice to list all occupants in the rental agreement to simplify the process.
Residence registration does not grant ownership rights. It serves solely as address registration.
Deposit and utilities
The deposit is usually agreed in the amount of one to three monthly rents and serves as security for potential damages or unpaid obligations.
Utilities such as electricity, water, gas, internet, and communal services are typically paid by the tenant unless otherwise agreed.
Income tax on long-term rental
Income from long-term rental is classified as property income and taxed at the landlord level.
The tax model is straightforward:
- tax rate is 12 percent
- income is reduced by 30 percent as lump-sum expenses
- tax is paid on the remaining 70 percent
Monthly tax calculation example
For a monthly rent of 700 EUR:
- monthly income: 700 EUR
- 30 percent lump-sum expenses: 210 EUR
- taxable base: 490 EUR
- 12 percent tax: 58.80 EUR per month
On an annual level, this equals 705.60 EUR, representing an effective tax burden of 8.4 percent of total rental income.
Reporting the rental agreement to the Tax Administration
The rental agreement must be reported to the Croatian Tax Administration via the ePorezna system or in person at the tax office responsible for the property location.
Required documentation and confirmation of submission
When reporting the agreement, it is recommended to bring two copies of the contract. One copy stays with the Tax Administration, and the other can be stamped as proof of receipt. This provides clear confirmation that the contract was properly reported.
In most cases, copies of ID cards are not required if all relevant data is clearly stated in the contract.
The Tax Administration does not usually issue an immediate official certificate at the counter but typically sends a tax assessment decision by mail or via the eTax system. This decision serves as official proof of reporting and tax amount.
Keep the stamped copy of the contract and the tax decision as important documents in case of tax audits or other administrative needs.
Notarization of the rental agreement
If the rental agreement is notarized by a public notary, the notary is obligated to report the agreement to the Tax Administration. In this case, the landlord or tenant does not need to file a separate tax report. This significantly simplifies and speeds up the process.
Long-term rental and property tax
Properties rented on a long-term basis for at least 10 months per year are exempt from property tax, provided the rental agreement is properly reported.
Long-term rental in Croatia can be a secure and stable housing solution when contracts, tax obligations, and administrative steps are clearly defined. Proper reporting and well-prepared documentation ensure a transparent and reliable relationship between tenant and landlord.
