Property Tax: Who Must Report Changes to Avoid Penalties

Citizens must report essential data for the taxation of their residential properties to the Tax Administration or another competent tax authority by March 31, or for exemption from property tax, but only in cases where data that the tax authority is unaware of needs to be provided.

The process of determining property tax will be based on data collected by the tax authority or exchanged with other records that maintain data necessary for tax determination. Therefore, the Tax Administration emphasizes that the obligation to report essential data for taxation is only an exception and only in cases where data that the tax authority is unaware of needs to be provided.

– Citizens are not required to submit a report of essential data for taxation for properties for which a utility fee is paid (e.g., if a citizen has registered residence, pays utility bills, etc.), as well as for properties rented based on a lease or rental agreement that has been reported to the Tax Administration for income tax purposes – they state.

The data that the taxpayer must provide by March 31 relates only to properties for which a utility fee is not paid, if the area of the property for which a utility fee is paid has changed and this was not reported during the utility fee calculation, as well as if the purpose of the property has changed.

There are also proofs that need to be submitted to meet the conditions for exemption from tax payment, which are not known to the tax authority, which refers to properties that a person uses for permanent residence but does not have registered residence or stay, as well as for properties rented for long-term lease, where the rental agreement has not been reported to the Tax Administration, which is possible if the landlord is a commercial company or another legal entity.

In case of need, in order to be exempt from tax payment, data or evidence about the property that has been rendered unsuitable for residential purposes must also be provided, for example, if it lacks infrastructure, a roof, has compromised structural integrity, etc., when the property cannot be used due to natural disasters, when it concerns a property of public purpose intended for institutional accommodation of persons, and finally, when it concerns properties that are recorded in the business books of commercial companies as intended for sale, in cases where less than six months have passed from the date of entry into the books until March 31 of the year for which the tax is determined.

Published Unified Forms on the Tax Administration Website

To facilitate the identification of which data citizens and entrepreneurs must provide for the determination and collection of property tax, or for exemption from tax payment, the Tax Administration has also published unified request forms for citizens and requests for entrepreneurs.

– This request is submitted to report changes in essential data for determining the obligation to pay property tax, as well as to report evidence that affects the fulfillment of conditions for exemption from property tax – it states in the request.

The request is submitted to the Tax Administration or another competent tax authority by March 31 of the year, according to the location of the property. If the Tax Administration is designated as the competent tax authority for determining and collecting property tax, this form can also be filled out via eTax.

First Decisions in September, Penalties up to €6,630

The Tax Administration states that, exceptionally in 2025, the first decisions on the determination of property tax can be expected at the end of the third quarter, that is, in September.

The decision will determine the annual tax obligation, which must be paid within 15 days from the date of delivery of the decision. Penalties for individuals who do not provide data for determining property tax range from €1,000 to €6,630.

Annual Tax per Square Meter from €0.6 to €8

The property tax was introduced on January 1 of this year as a replacement for the tax on holiday homes, and it is paid annually in the amount of €0.6 to €8 per square meter of usable area of the property.

It should be reiterated that if the property is used for permanent residence or is in long-term rental, then property tax is not paid. On the other hand, if the property is used short-term, for example, for tourist rentals, tax is paid. However, properties that serve the host, as defined by the regulation governing hospitality activities, for permanent residence are exempt from property tax. This means that a host living in a property while renting out the remaining part does not pay property tax for that property in its entirety.

The decision on the amount of tax is made by the local self-government unit (city/municipality) in whose area the property is located. According to amendments to the Local Tax Act, which is in effect from January 1, 2025, local self-government units could make decisions on local taxes until February 28 of this year.

The amount of tax is determined based on the location of the property and may increase based on other criteria that affect the value of the property, such as the age of the property or the presence of amenities, but in that case, it cannot exceed €8 per square meter.

The upper limit of property tax has been increased to €8 per square meter compared to the tax on holiday homes in 2024, which was €5 per square meter.

215 Municipalities and Cities Increased Property Tax

Property tax is a shared revenue of the municipality/city and the county in whose area the property is located, with 80% of the revenue going to the municipality/city and 20% to the county.

According to data from the Tax Administration, 215 municipalities and cities have increased the amount of property tax, 284 have kept the same amount, and 57 municipalities and cities have reduced it.

Data for this year show that the minimum amount of €0.60 per square meter is applied by 119 cities and municipalities, while the highest tax burden of €5 to €8 has been set by 73 cities and municipalities.

The Tax Administration tables show that the highest possible tax for 2025 of €8 per square meter has been set by Umag, Vis, Sveti Filip i Jakov, Fažana, and Baška Voda. Following with €7.5 is Bol, and Motovun has set €7. Among the largest cities, Zagreb has set €5, Split €1.99, Rijeka €5, and Osijek €0.6 per square meter.