The City of Zagreb has published a Draft Proposal for amendments to the Decision on Local Taxes, proposing an increase in property tax from the current five to eight euros per square meter of usable area starting January 1, 2027.
This represents a 60 percent increase, and eight euros is also the highest amount allowed by the Local Taxes Act. The law stipulates a range from 0.60 to 8 euros per square meter, with the specific amount determined by the local government unit.
The draft was published by the City on September 3, and the public consultation lasts from September 4 to October 4. If the City Assembly approves the proposed decision, the new rate will apply from January 1, 2027.
The draft simultaneously aligns the city decision terminologically with the Local Taxes Act, replacing the previous provisions on ‘tax on holiday homes’ with provisions on ‘property tax’. However, this is not just a change of name: the new Article 4 explicitly states that the property tax in the area of the City of Zagreb is 8 euros per square meter of usable area, while the previous amount was five euros.
Announcement by Tomašević
Mayor Tomislav Tomašević announced in an interview with Lider at the end of last year that Zagreb would most likely raise property taxes, and this announcement is now being formalized.
Recall that with amendments to the Local Taxes Act at the end of 2024, the existing tax on holiday homes was converted into a broader property tax starting January 1, 2025, and the upper limit was increased from five to eight euros per square meter. The tax is not paid on every property. The law exempts, among others, properties used for permanent residence and those rented for permanent residence under legally prescribed conditions.
The significant revenue that the tax brings to the City is also shown by this year’s budget revision. Zagreb expects seven million euros more in revenue from property taxes than originally planned, with the explanation that part of the tax obligation from the first year of application was recorded only during 2026 due to deferred assessment.
41 Cities and Municipalities Increased Rates, 12 Reduced Them
According to data from the Tax Administration for 2026, in the highest tax bracket, from five to eight euros per square meter, there are 84 cities and municipalities, but only ten apply the maximum of eight euros. Zagreb is currently at five euros, the lower limit of that bracket.
Out of a total of 556 local government units in the Republic of Croatia, 41 have increased the average property tax rate this year, while 12 have reduced it. In the remaining 503 cities and municipalities, the tax burden remained unchanged.
In the analysis, cities and municipalities that apply a range of tax rates are classified according to the average value of that range, rather than its maximum allowable height.
For the highest tax bracket, from five to eight euros per square meter, according to data from the Tax Administration, 84 cities and municipalities have opted for it. For comparison, last year, when the property tax was introduced, replacing the previous tax on holiday homes, there were 74 municipalities and cities in that category.
The lowest amount of 0.60 euros per square meter is applied in 125 cities and municipalities, while the most places, 178, have voted for a tax rate in the range between 0.61 and 1.99 euros per square meter. The fewest, 39, are in the category from 4.00 to 4.99 euros per square meter.
A closer look at local government units and tax rates in 2026 concludes that taxes have predominantly increased in coastal areas, while they have decreased inland.
Among the 41 cities and municipalities where the tax has increased are Punat, where the average rate increased by five euros (with the introduction of a range from 6 to 8 euros), Nin with an increase of four euros and the introduction of a fixed maximum rate of 8 euros, Blato (+3.47), and Split, which increased the tax by three euros by introducing a uniform rate of 5.00 euros per square meter.
They are followed by those with increases, albeit smaller, such as Privlaka near Zadar, Mali Lošinj, Biograd na Moru, Vižinada, Sutivan, etc. The maximum rate of eight euros in 2026 will be applied by 10 cities and municipalities, while there were only five last year.
From January 1, property owners in Nin, Mali Lošinj, Biograd, Sutivan, Lopar, and Vrsima will thus pay the highest rate of eight euros per square meter… Interestingly, Dubrovnik, the most famous Croatian tourist city with the most expensive properties, is not among the cities with the maximum tax rate, having opted for a uniform rate of five euros per square meter instead of the highest tax bracket.
As for the 12 places where the tax has been reduced, they include Otok, Kalnik, Severin, Sveti Ivan Žabno, Janjina, and Viškovci. It is also interesting to mention examples where local authorities in coastal areas have decided to reduce property taxes. Notably, Baška Voda has introduced a new rate of three euros, down from the maximum of eight euros per square meter. On Vis, the tax has also been reduced from eight to six euros.
