Deputy Prime Minister and Physical Planning, Construction and State Assets Minister Branko Bacic said the government would maintain "social" prices, especially for gas and electricity, and partly for oil products, adding that there would be no major energy price increases.

These prices “will not rise as much as has been speculated in the media in recent days. We will try to keep the increase as low as possible,” Bacic told reporters on Monday. He also announced that the government would adopt the autumn package of aid measures in two weeks.

He said the government would be careful not to lower citizens’ living standards.

The aim is to build a quality relationship between residents and tourists

Bacic stressed that since the Covid-19 pandemic and Russian aggression against Ukraine, many conditions on the energy market have changed, leading to a significant increase in energy prices, but this is not the case in Croatia. He added that energy prices would remain “pretty much the same as before.”

Reporters asked Bacic for comment on a draft bill on the management and maintenance of buildings that would prohibit short-term rentals in apartment buildings without the consent of 80% of the building’s residents.

Bacic said the intention is to protect living space in buildings and contribute to the quality of life of apartment owners who do not rent short-term but often fall victim to the lifestyle in housing units where short-term rentals take place and which are primarily intended for tourism.

“If we want high-quality sustainable tourism, we need to build a quality relationship between residents and tourists,” he said. He also stated that short-term rentals in an apartment building would still be possible if 80% of the building’s co-owners agree.

Young people struggle with high housing prices

Bacic stressed that housing in Croatia should be used exclusively for living. He warned that young people in cities pay high rents because ten percent of all housing units in the country are used for short-term rentals, which then leads to increased rental and purchase prices per square metre of an apartment due to the tight supply on the market.

He added that he would present the country’s first housing strategy at the end of September, which would also include certain tax changes. Asked whether this would also mean the introduction of a property tax, Bacic replied: “Yes, we will introduce a property tax in some way, but I would like to tell you the main features of the bill only when we have fully finalised the draft.”

Bacic warned that around 115,000 housing units have been converted into commercial premises and 230,000 into holiday rentals. He believes that the new law could come into force from January 1, 2025. He also stressed that the tax reform aims to encourage long-term rentals and reduce short-term rentals.