Why should Croatia introduce incentives for foreign real estate buyers?

For years, Croatia has been an attractive destination for foreign property buyers, especially in coastal regions such as the Opatija Riviera, Istria, Kvarner, and Dalmatia. These buyers are not coming for cheap square meters - they come for lifestyle, safety, natural beauty, proximity to Central Europe, and cultural ties. With them comes capital, but also long-term spending, investments in renovation, job creation, and an enhanced image of Croatia as a desirable country to live in.

Despite this, Croatia still does not offer any model of structured incentives to attract such buyers. There are no tax breaks, no administrative privileges, no personalized programs for high-profile foreign buyers. Even residence permits are not adapted to market realities, not even in cases where someone invests millions of euros into property. Unlike Croatia, some countries at least attempted to structure adaptation models. Although, for example, Portugal and Spain have since abolished their “golden visas” and other real estate-related privileges, the fact that they had them at all speaks volumes about how the second-home market has always been and remains - a political question in many states.

Croatia has not even started down this path, and that is a missed opportunity. Because the moment for strategic positioning has never been better.

Waterfront apartments in historic building - Opatija Riviera

Too much construction, average quality, and no vision - It’s time for change

Our current real estate development model is oriented toward volume rather than value. Buildings rise without urban planning logic, quality is often average, and projects target the middle or lower-middle segments of European buyers. At the same time, we fail to provide infrastructure or long-term sustainability for such growth. In many locations, the result is visual and functional chaos, overloaded systems, and declining quality of life - both for local residents and future owners.

We could and should, build less, but smarter. Simply put: fewer square meters, more meaning, and higher added value. Instead of relying on mass and quantity, we should steer development toward projects that bring higher revenue per square meter, less environmental impact, and stronger integration into local communities. Precisely here, incentives for foreign buyers with higher purchasing power can be an instrument for such a shift.

Contemporary new villas with private pools near Umag

HNWI buyers as drivers of a new economy and urban opportunity for Croatia

High-net-worth individuals (HNWI) are not just consumers of luxury. They often become informal ambassadors of the country, catalysts for cultural, economic, and social dynamics. Each such buyer, especially one who spends several months per year here, creates multiple opportunities: from employing local people to activating crafts, design, and service industries. Moreover, conditions emerge for opening new schools, clinics, services, and restaurants - precisely because society becomes more solvent.

Today, Croatia imports cheap labor to meet seasonal demand, while at the same time ignoring the potential of importing highly solvent new residents. This is a strategic mistake. Especially because interest already exists - many Americans, Britons, and Scandinavians are seeking alternative places to live due to political, economic, and social instability in their home countries. Croatia interests them, but we reject them. A buyer who invests millions of euros into a property often cannot stay longer than 90 days. Administratively, it is as if they never came. Absurd - economically and socially.

Time for a new model: Controlled incentives and strategic selection

Incentives do not need to be mass-oriented or indiscriminate. On the contrary, they can be based on clear and demanding criteria: minimum investment value, building energy standards, community involvement, length of stay, property maintenance, and even cultural contribution. A model structured in this way would not threaten the public interest - it would strengthen it. Our goal should not be to attract everyone, but to attract those who want - and are able - to create added value here.

Such incentives could include partial exemption from real estate transfer tax for a first purchase, simplified residence permit procedures, priority status in digitalized land registries, and even infrastructural incentives for adaptations or reconstructions. All with the clear condition that the buyer commits long-term to Croatia, either through residence or through value creation.

If we want Croatian emigrants to return, we must first raise standards and demand

The return of Croatian emigrants will not happen on emotional attachment alone. People return where they see opportunities, conditions, and quality of life. And to ensure this, we must create a society that can pay for their knowledge, work, and ambition. This means building a solvent market, expanding the consumer base, and opening high-quality jobs. It all begins with attracting new residents who have the capacity for spending and investment.

In this sense, HNWI buyers are not competition to the local population, they are the platform upon which the local population can build a new economy. If we fail to act, Croatia will remain in the zone of medium quality and low value, condemned to a seasonal model that exhausts people, nature, and the system.

Croatia has everything it needs - except political will and vision

We have the sea, safety, nature, cultural heritage, an extraordinary location, and European legal security. What is missing is a clearly articulated, structured model by which Croatia recognizes the value of new residents arriving. Instead of improvisation, it is time for a systematic approach. Instead of chaotic development, it is time for selective policies. And instead of passively watching departures - it is time to actively attract those who want to stay.

If we act now, Croatia can become one of the most desirable countries for a new life in Europe. If we delay, that space will be taken by someone else.

For further reading

For those already considering where the best opportunities lie, we recommend exploring our blog The best regions in Croatia to buy a villa with a sea view, as well as our guide Croatia real estate - your buying guide. Both provide an overview of destinations and practical advice for anyone thinking about making Croatia their second home by the sea.

Blog author: Ivan Kovačić