Good news for young people! In the Narodne Novine, number 86/2025, the Regulation on Support for Acquiring the First Residential Property was published, which entered into force on the day of publication. This marks the official start of receiving requests for tax refunds for the purchase of the first property. As a reminder, the new Law on Encouraged Residential Construction (POS) has introduced a tax refund for the paid tax on property transactions or 50% of the paid VAT for citizens who buy or build their first property. Criteria have been introduced, such as the maximum allowed floor area and the maximum property price, and detailed conditions are defined for citizens who must meet in order to claim the support. It is essential to note:

The APN website has a list of required documentation that must be attached
The APN website has a Request for Payment of Support form that must be filled out and verified by a public notary
The request can be submitted within a period of 24 months from the signing of the purchase and sale contract (signed after January 1, 2025)
In the event that the support recipient sells or rents the property or changes their residence and does not reside in the property within five years of the payment of the support, they are obliged to return the support

SUPPORT RIGHT For support to be achieved, citizens must meet the following conditions:

They must be Croatian citizens
The purchase and sale contract of the first residential property must be concluded after January 1, 2025
They must not have reached the age of 45
The applicant and members of their immediate family, residing in Croatia or abroad, must not have the property intended for residential use or had it as of January 1, 2025
The applicant and members of their immediate family must have registered residence and reside in the place and address where the property they acquired is located
Upon the purchase and sale contract of the property after January 1, 2025, a decision on the determination of the tax on property transactions was issued based on which tax on property transactions was paid or it was paid VAT based on a bill issued by the seller after January 1, 2025

If the support relates to the construction of a family house, in addition to conditions 1-5, the following additional conditions must be met:

The building permit for the family house became final after January 1, 2025
A bill or project, verified by an inspector, was issued based on which VAT was paid

Members of the immediate family, according to this Law, are considered spouses, cohabiting partners, unmarried partners, and children. EXCEPTIONS In the application of this support, the following exceptions apply:

The right to support can exceptionally be claimed if the applicant or members of their immediate family have, or had, a property intended for residential use which they sold to buy a larger apartment or house, or to build a house

WHEN THE RIGHT TO SUPPORT IS NOT REALIZED

Applicants and members of their immediate family who have already used state subsidies for resolving housing issues
If the agreed price of the residential property is 50% higher than the average price of the square meter of the apartment in the unit local self-government (JLS) in which the property is purchased or built
If the property exceeds the prescribed maximum area by 50%

WAY OF CALCULATING SUPPORT

Maximum recognized useful floor area

The highest amount of support is determined based on the useful floor area of the apartment or family house to which the applicant has the right, in accordance with the number of household members and the average price per square meter in the unit local self-government (JLS) where the property is purchased or built. Maximum recognized useful floor area of an apartment:

1 person - up to 50 m²
2 people - up to 65 m²
3 people - up to 80 m²
4 people - up to 90 m²
5 people - up to 100 m²
6 people - up to 110 m²
7 and more people - up to 120 m²

For family houses, the above-mentioned areas are recognized in increased by 50% depending on the number of household members of the applicant. If the property has a larger area than the prescribed maximum, the right to a tax refund for the first property is not realized. When calculating the base, only the paid value of the square is taken into account if it is lower than the average price in that JLS.

Maximum recognized purchase price

Since property prices differ across Croatia, the Ministry, in collaboration with experts, will determine the average price for each unit local self-government and, depending on city quarters, for the City of Zagreb. Currently, the calculation of average prices for 2024 is underway, based on which the tax refund will be made. SUBMITTING REQUESTS The request for payment of support is submitted to the Agency for Property Transactions and Mediation, Savska Road 41, 10000 Zagreb, on a prescribed form with documentation that proves compliance with the conditions for claiming the right to payment of support. On the APN website, you can find the REQUEST FOR PAYMENT OF SUPPORT form, which can be downloaded. The request must include basic information about the applicant (name, surname, OIB), and the signature must be verified by a public notary. The request is accompanied by a list of documentation for the purchase of an apartment or house, or documentation for the construction of a family house. What if there is no data on the area? If the area cannot be determined from the submitted documentation, additional documents must be submitted, such as:

Authorized valuer's assessment
Ruling on legalization
Findings by authorized engineers or architects

PROCEDURE FOR VERIFICATION AND DEADLINES If the request is incomplete or unclear, APN invites the applicant to correct it within 30 days. If not, the request is rejected. If it is determined that the applicant does not meet the legal conditions, the request is rejected. Requests are processed in the order of receipt of completed requests. A completed request is one that includes all elements and supporting documentation prescribed by this regulation. Author: Martina Mataić Škugor Director of Credit Mediation Opereta Real Estate

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