A 50% VAT refund on the purchase of newly-built properties is one of the measures aimed at providing young people with affordable housing, said Minister Branko Bacic during the discussion on housing policy measures.

Bacic, the Minister of Physical Planning, Construction and State Assets spoke after a government meeting on Thursday about the upcoming new proposals in housing policy based on the National Housing Policy Plan, which was put out for public consultation at the end of last year.

Four main levers

This is the first and overarching strategic medium-term document regulating housing in Croatia, and Bacic said that its aim is to enable affordable housing for young people, which is becoming increasingly difficult to achieve in the face of rising property prices in Croatia.

The national plan sets targets for sustainable and quality housing, for which a total of 1.5 billion euros must be made available by 2030.

“All measures, laws and by-laws that we will adopt, especially in 2025, will focus on four main levers – financial, fiscal, land and green energy policies,” said Bacic.

The measure that is currently attracting the most public interest is one that will exempt young people from paying real estate transfer tax when buying their first property from 1 January.

Bacic also highlighted the exemption from paying 50% VAT on the purchase of newly built properties as a completely new initiative. “We believe that this will make buying property much easier,” he said.

Renting out state flats, building new flats and promoting the rental of private flats

In the first half of the year, measures will be taken to enable certain categories of citizens to rent flats at affordable prices.

In this context, Bacic announced the rental of 1,200 state-owned flats, which are to be renovated first.

“These flats are intended for young families whose monthly income does not allow for affordable housing. Affordable housing is defined as a situation in which a household spends less than 30% of its monthly income on utilities and housing costs (loan repayments if they bought the flat, or rent for the flat),” he explained.

The next step, Bacic added, will be to enable affordable housing in private flats. Incentives will be used to “encourage citizens whose flats have been empty for more than two years” (there are around 600,000 such flats) to put them on the market.

Bacic is convinced that increasing the supply of such flats will halt the rise in property prices.