Croatian cities and towns set new property tax rates

Korčula

The deadline for local authorities in Croatia to set new property tax rates has passed. This tax, introduced at the start of the year, replaces the previous tax on holiday homes and now applies to all unused but habitable properties not under long-term lease.

Rates range from 0.60 to 8 euros per square metre, compared to the previous 0 to 5 euros.

New Tax, New Rules

Unlike the old tax on holiday homes, which was optional, all local authorities must now implement the property tax. Cities that did not set a new rate have defaulted to the previous rate for holiday homes.

Those that never charged tax on such properties now have the minimum rate of 0.60 euros per square metre.

Local authorities can adjust tax rates based on location, property age, and added amenities. They can also exempt socially vulnerable residents under specific conditions.

Most Cities Keep Rates Steady

Data from Croatia’s 20 largest cities and towns show most have maintained previous tax rates despite the government raising the maximum limit to 8 euros, tportal writes.

This cautious approach is likely due to upcoming local elections. Last year, the government raised the upper limit to 5 euros, leading many cities to increase rates then, making further hikes unnecessary.

Key Tax Rate Changes

Bjelovar saw the most significant increase, as it previously had no holiday home tax. It introduced property tax ranging from 3 to 6 euros per square metre, with central areas paying the highest rate.

Slavonski Brod raised rates to 2 euros, up from 1.33, while Sisak increased rates for its prime zone to 3 euros.

Cities like Osijek, Varaždin, Koprivnica, Vinkovci, and Čakovec, which had no holiday home tax, now levy the minimum rate of 0.60 euros.

Tourist Destinations Maintain High Rates

Zagreb, Split, and Rijeka have kept their existing rates at 5 euros, with Zagreb and Rijeka having already raised them to 5 euros last year.

Coastal tourist hotspots, including Dubrovnik, Split, Zadar, Šibenik, Opatija, and Pula, also opted not to increase taxes further.

However, a few Istrian towns raised rates beyond 5 euros, with Rovinj and Poreč setting them at 6.25 euros.

The highest rate of 8 euros per square metre was introduced in Umag. Officials justified the hike by citing changes in tax revenue distribution.

Under the new law, 20% of the revenue goes to the county, reducing income for cities and towns compared to the previous system.

This means municipalities that kept rates unchanged will now have lower tax revenues, as a portion must be shared with the county.