Croatia’s real estate market is marked by strong demand amid tight supply. Recent analyses note that high demand, inflation-driven price growth, and limited new construction have resulted in a slowdown of the residential real estate market.
This imbalance has spurred sweeping legislative and policy reforms in 2024-2025, as authorities seek to ease housing costs and modernize the sector.
In late 2024, the Croatian Parliament approved a broad package of property laws that took effect in January 2025. The centerpiece was the new Act on Building Management and Maintenance, aiming to define the management and maintenance of multi-apartment buildings in Croatia. It introduces significant changes aimed at improving the upkeep of multi-apartment buildings and streamlining administrative processes. The new Act on Building Management and Maintenance now formally recognizes each multi-apartment building’s co-owners’ community as its own legal personality, which receives a personal identification number. It must be registered in an official register, and it has to have a dedicated bank account.
Looking ahead, Croatia is preparing a wave of modernization in spatial planning and construction law. In September 2025, public consultations on three draft laws were launched: a new Physical Planning Act, a new Building Act, and a standalone Energy Efficiency in Building Construction Act.
The Physical Planning Act aims to enable digitalized plan-making (via a national e-Plans platform), mandate expert surveys for better projects, and give more authority to local governments. The Energy Efficiency in Building Construction Act shall focus on decarbonizing the building stock, mandating near-zero energy performance, a national renovation plan, and an EU-aligned energy certification regime.
The new Building Act aims to simplify permit procedures by introducing digital building information modeling tools and e-permits, separating energy matters into their own law, and enforcing pre-permit inspections and maintenance plans.
Furthermore, the new Building Act shall address some very important legal aspects regarding building possibilities in tourist zones, with a particular focus on how they relate to the subdivision of hotel facilities. The new legislation aims to regulate the real estate market more strictly, especially in tourist zones, to prevent the fragmentation of hotel properties into individual units (condominiums) for private resale. This is intended to preserve the functional integrity of tourist facilities and ensure their use for their original purpose, rather than for residential purposes.
According to the proposed changes to the Building Act, an almost complete ban on the subdivision of tourist buildings into separate units (condominiumization) has been proposed in order to prevent manipulation of the designated use of space in touristic zones and the “apartmentization” of the Croatian coast. The conversion of tourist buildings into condominium ownership (sale of individual units) shall not be permitted in areas designated for tourism, except in high-category zones (five stars), where at least 70% of the accommodation capacity relates to hotels. In these high-category zones, villas and apartments can be formed into condominiums only after the hotel and central facilities have received the Certificate of Occupancy. The entire zone must function as a single entity with centralized management and maintenance, and units can only be sold to buyers who agree to entrust the management of the unit to a common manager for hospitality and tourism activities. This topic should be of significant interest to existing and future investors in hotel facilities in Croatia.
Meanwhile, ongoing digital reforms are improving transparency in the real estate market. Croatia’s land registry (the electronic Cadastre-Registry system) is being fully digitized, so that property and land records are public and updated in real time. These changes should streamline deals and title searches.
Amid these changes, the market has remained active. In sum, Croatia’s real estate legal landscape is rapidly evolving. The combination of tax reforms, housing incentives, planning overhaul, and liberalized ownership rules reflects a policy push to balance growth with affordability. Investors should watch closely as these measures take effect, since they will reshape transactions, investment, and development throughout 2025 and beyond.
By Ranko Pecarevic, Managing Partner, Pecarevic & Relic Attorneys at Law
This article was originally published in Issue 12.11 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.
