Holiday home in Croatia: what you pay tax on in Switzerland and in Croatia
The flat on the Adriatic is taxed in Croatia. It still belongs in your Swiss tax return. What is due where, why your Swiss mortgage may be affected and how to regularise a property that was never declared.
- A property in Croatia is taxed in Croatia. Switzerland does not tax it, but takes it into account for the tax rate on your other income and assets.
- Since 2025, Croatia has levied an annual property tax of EUR 0.60 to 8 per square metre, unless the flat is the main residence or let on a long-term basis.
- A property that was never declared can be regularised through a penalty-free voluntary disclosure. Heirs have an even more favourable procedure.
Who taxes what?
If you live in Switzerland, you are taxable here on your worldwide income and assets. The law makes an exception for real estate abroad: it is taxed where it is located. The double tax treaty between Switzerland and Croatia provides for the same.
Still, the flat is not left out entirely. Switzerland exempts it but includes it when determining the tax rate. This is known as exemption with progression. Your Swiss income and assets are therefore taxed at the rate that would apply if the Croatian flat were included.
- Property tax per square metre
- Rental income or a flat rate per bed
- Real estate transfer tax on purchase
- Gain on sale, depending on the holding period
- Tax value, only for the tax rate
- Imputed rental value or rental income, only for the rate
- A proportionate share of debts and interest
- Duty to declare it in the tax return
What you declare in Switzerland
- the tax value of the property, based on the purchase price or a valuation, depending on the canton
- if you use it yourself, an imputed rental value; if you let it, the rental income less maintenance costs
- mortgages and other debts related to the property, including interest
The tax return has a separate section for properties abroad. The figures are only used to determine the rate.
A point many people overlook: Debts and interest are not deducted where the loan was taken out. They are allocated between Switzerland and abroad in proportion to your assets. If you finance the flat in Croatia by increasing the mortgage on your house in Switzerland, you can therefore only deduct part of the interest in Switzerland. The rest is allocated to Croatia, where it usually has no effect.
What is due in Croatia
Annual property tax
Since 1 January 2025, Croatia has levied a property tax (porez na nekretnine). It replaces the former tax on holiday homes. Each municipality sets the rate between EUR 0.60 and 8 per square metre of usable floor area per year. Exempt are the registered main residence and flats let on a long-term basis for at least ten months a year. A holiday flat of 80 square metres therefore costs between just under EUR 50 and EUR 640 a year, depending on the location.
How much is your property tax in Croatia?
Your municipality sets the rate, between EUR 0.60 and 8 per square metre of usable floor area. Ask the municipality or check your last tax assessment.
Letting
If you let privately to holiday guests, you usually pay a flat-rate tax per bed. This too is set by the municipality, since 2025 within a range of roughly EUR 20 to 300 per bed and year, plus the tourist tax. For long-term lets, 12 percent is levied on 70 percent of the rent, because 30 percent is deemed to be costs.
Purchase, sale and inheritance
- Purchase: 3 percent real estate transfer tax on the market value. For a new build bought directly from the developer, 25 percent VAT is due instead.
- Sale: Croatia taxes the gain at 24 percent if the property was held only for a short time. The relevant holding period is stated differently in different sources and has been adjusted in recent years. Have it confirmed before a sale. In Switzerland, the gain is not taxable.
- Inheritance and gifts: Spouses, children, grandchildren and parents are exempt from tax in Croatia. Other heirs pay 3 percent of the market value. Swiss cantons do not tax real estate abroad.
Never declared? How to put it right
Inherited flats and houses in the country of origin are missing from many Swiss tax returns. Often out of ignorance, because people assume that what is taxed in Croatia is none of Switzerland's business.
The automatic exchange of information covers bank accounts, not land registry data. But an account in Croatia that receives rental income, for example, is reported to Switzerland together with its balance. At the latest then, the tax authorities will also ask about the flat.
- Penalty-free voluntary disclosure: Once in your lifetime, you can declare undeclared assets after the fact without a fine, provided the tax authorities do not yet know about them. Back taxes and late-payment interest for up to ten years are due. Because the property only affects the rate in Switzerland, the back taxes are often lower than feared.
- Simplified procedure for heirs: If the parents did not declare a property, the heirs can report it. Back taxes are then only levied for the last three years before the death, also without a fine.
Outlook: abolition of the imputed rental value
In September 2025, Swiss voters approved the abolition of the imputed rental value. It will apply from 2029 at the earliest. For owner-occupied homes, the imputed rental value and the deduction for maintenance will then no longer apply, and interest will only be deductible to a limited extent. How the cantons will implement this for properties abroad when determining the rate is still open. I will update this article as soon as the practice is settled.
This article provides a general overview as of October 2026. It does not replace advice on your specific situation. For the Croatian side, have the details confirmed by a local expert before a purchase or sale.
Sources: Federal Act on Direct Federal Tax, Art. 6, 7, 153a and 175 para. 3 · Double tax treaty Switzerland–Croatia (German) · Porezna uprava (Croatian tax administration)
Igor Pavlovic is a fiduciary and auditor in Lucerne, Switzerland. He advises business owners and wealthy private individuals on tax, succession and audit, including cross-border matters.