Croatia’s government has introduced a higher tax on income generated from short-term rentals as part of a series of amendments to the Individual Income Tax Act.
The government has initiated a public consultation about the draft amendments, which also includes the increased tax on short-term rentals.
The deadline for submissions is 24 October 2024.
The proposed high tax on short-term rentals aims to connect the flat tax rate to the level of tourist development in the city or municipality where the property is situated. The proposal also calls for imposing higher taxes in more developed tourist areas.
The recent tax increase on unoccupied properties and short-term rentals is intended to encourage owners to return these properties to the residential market rather than renting them to tourists.
The main provisions of the proposed high tax on short-term rentals are:
- Income from renting beds, rooms, and campsites for Robinson tourism may be taxed at a flat rate of up to EUR 199.08 per unit under specific circumstances;
- Cities in Category I can set a maximum lump sum tax of EUR 300, while those in Categories II, III, and IV can impose taxes of up to EUR 200, EUR 150, and EUR 100, respectively.
Once enacted, this will take effect on 1 January 2025.
