Croatian Ministry of Justice Changes its Former Practice and Allows Russian Citizens to Buy Real Estate in Croatia
May 14, 2014
As reported by one of the leading Croatian daily newspapers, Večernji list, the Croatian Ministry of Justice is going to change its practice regarding acquisitions of real-estate by Russian citizens.
According to the Croatian Ownership and Other Property Rights Act (hereinafter: the Ownership Act), anyone who is a Croatian or an EU citizen can freely buy, sell or otherwise dispose of real-estate in the Republic of Croatia. For non-EU foreign citizens, however, Article 356 of the said Act prescribes two requirements that have to be met for the acquisition of real property:
- there has to be reciprocity between Croatia and the country of the person wishing to acquire real property, meaning that Croatia makes the treatment of foreigners conditional upon the given country’s treatment of Croatian nationals with regard to real property;
- there has to be consent by the Croatian Ministry of Justice regarding the acquisition of the real property.
With regard to Russian citizens, the reciprocity requirement was, up to now, interpreted to mean that Russian citizens cannot purchase real property in Croatia, because the principle of superficies solo cedit, prescribed by Article 9 of the Ownership Act as one of the basic principles of Croatian property law, is not applicable in Russia. This means that when purchasing an apartment in Croatia, the buyer becomes the co-owner of the plot on which the apartment building was built. Conversely, a buyer of an apartment in Russia, would not automatically become the co-owner of the plot.
In the past, this discrepancy was interpreted to mean that there is no reciprocity concerning real property transactions between Croatia and the Russian Federation. For that reason, Russian citizens, be it natural or juridical persons, were not able to buy real property in Croatia, even though, many circumvented this restriction by establishing a company – a Croatian juridical person – in Croatia, through which they subsequently bought the real estate they wanted.
According to the Croatian Minister of Justice, Orsat Miljenić, such circumventions would not be necessary in the future, because his Ministry decided to change the interpretation of the reciprocity requirement, enabling Russian citizens to buy real property in Croatia.
Jelena Božović