1.     Introduction

Part eight of the Ownership and Other Real Rights Act (“Official Gazette” nos. 91/96, 68/98, 137/99, 22/00, 73/00, 114/01, 79/06, 141/06, 146/08, 38/09, 153/09, 90/10, 143/12, 94/17 – consolidated text, 152/14, 81/15 – consolidated text) regulates the ownership of real estate, specifically the acquisition of real property rights by foreign natural and legal persons. While the remainder of the Act regulates rights relating to both movable and immovable property, this eighth part applies exclusively to the acquisition of ownership over real estate by foreign persons. These provisions do not apply to movable property rights, meaning foreign persons may freely acquire rights in movable property in Croatia, nor do they apply to limited real rights (easements, real burdens, building rights, and mortgages).

2.     Foreign persons

For the purpose of applying this Act, the term “foreign persons” refers to natural persons who do not hold Croatian citizenship (except emigrants from the Republic of Croatia or their descendants, provided that the competent authority determines that they meet the criteria for acquiring Croatian citizenship), as well as legal persons registered outside the Republic of Croatia.

These persons are subject to a special legal regime and certain restrictions when acquiring real property rights in Croatia.

However, the restrictions under this part of the Act do not apply to citizens and legal entities from EU Member States, the States Parties to the European Economic Area, or members of the Organisation for Economic Co-operation and Development (OECD) or states adhering to the Code of Liberalisation of Capital Movements and the Code of Liberalisation of Current Invisible Operations. Citizens and companies of these states may acquire real estate in Croatia under the same conditions as Croatian nationals and companies, except agricultural land, which may be owned only by Croatian citizens. Foreign persons may acquire agricultural land only by inheritance, and only under the condition of reciprocity.

3.     Acquisition of real estate by foreign persons

Foreign persons may acquire real estate in Croatia on the basis of reciprocity, provided that the Minister of Justice grants prior consent. The minister issues or denies such consent in accordance with the Ownership and Other Real Rights Act and the General Administrative Procedure Act, which governs the administrative procedure through which consent is granted or refused.

A special regime applies to real estate acquired by inheritance, for which ministerial consent is not required, although reciprocity must still exist. Reciprocity means that the foreign person’s home state allows Croatian citizens to acquire real estate there under the same or similar conditions. Therefore, before attempting to acquire property in Croatia, a foreign person should determine whether Croatian nationals may acquire property in their home state and under what conditions. If Croatian nationals face restrictions or prohibitions, the same restrictions apply to foreign persons seeking to acquire property in Croatia.

There are no restrictions on the disposal of property by foreign persons; they may freely sell or transfer real estate.

4.     Procedure for obtaining Ministerial consent

Any legal transaction aimed at acquiring ownership of real estate, for which ministerial consent is required, is void if such consent is not granted. The administrative procedure may be initiated either by the person intending to acquire ownership (e.g., buyer, donee) or by the person intending to dispose of the property (e.g., seller, donor). The request is submitted on the prescribed form to the Ministry of Justice, either directly or by post, together with supporting documentation.

If consent is denied, the foreign person may not reapply for the same property until five years have passed from the date the request was submitted.

5. Special rules for agricultural land

The Ownership and Other Real Rights Act provides that a foreign person may not own real estate located in areas designated by law as territories where foreign ownership is restricted for reasons of national interest or security.

Agricultural land, classified by the Agricultural Land Act as property of special interest to the Republic of Croatia, is subject to heightened protection. The rules apply equally to all foreign nationals, including EU citizens, who otherwise enjoy liberal access to Croatian real estate. These specific provisions supersede the general rules on foreign acquisition. Foreigners may only acquire agricultural land by inheritance, subject to reciprocity (this condition is waived for states adhering to the OECD Codes mentioned above).

Special regimes also apply to other protected categories such as forests, national parks, nature parks, and other land designated as being of special interest to Croatia.

6. Compensation to foreign persons for loss of ownership under Article 57 of the Expropriation Act

Article 57 of the Expropriation and Compensation Determination Act is a key provision addressing situations where a foreign person loses ownership of real estate due to statutory restrictions on property acquisition in certain areas (for example, where a foreigner inherits agricultural land, or where a foreigner previously owned property later designated as an area of special national interest).

Foreign persons may, following issuance of the relevant inheritance or administrative decision, request compensation under the Expropriation Act. The compensation is determined in a special administrative procedure and based on the market value of the property. The Republic of Croatia is the sole obligor for such compensation.

A foreign person may exercise the right to compensation only on the basis of a final and binding decision—either a decision terminating their ownership or a probate decision recognizing their entitlement to compensation.

The purpose of this compensation is to balance the protection of strategically important areas (borders, military zones, high-security areas) with the protection of individual property rights. In practice, this mechanism functions as a form of statutory “safety buffer,” ensuring fair compensation where ownership is lost due to legal restrictions designed to protect public interests.

7. Conclusion

Foreign persons, when acquiring property in Croatia, face additional legal requirements beyond the standard procedures of concluding and registering a purchase agreement. They must obtain ministerial consent through a separate administrative procedure and must understand Croatian administrative law, real estate acquisition rules, and the regulations of their home state. In cases where consent is denied, legal remedies are available, but alternative solutions may also be considered depending on the foreign person’s goals. Thorough preparation—or professional legal assistance—is strongly advisable.

LEGAL SOURCES:

• Ownership and Other Real Rights Act

• General Administrative Procedure Act

• Agricultural Land Act

• Expropriation and Compensation Determination Act

Borna Rokvić, Trainee Lawyer, under the supervision of Attorney-at-Law Anja Juršetić Šepčević