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Letting
Mar 13, 2005 13:40:45 GMT 1
Post by jonesclub on Mar 13, 2005 13:40:45 GMT 1
I am thinking of buying a property this april in the Istria area.Most probably new. Is there any way in which I would NOT be able to rent out a property or has anyone had this experience? If renting out has to go through certain channels how long does it usually take?
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Letting
Mar 14, 2005 19:00:48 GMT 1
Post by Aine on Mar 14, 2005 19:00:48 GMT 1
Hi
I am just in the process of buying a house in Istria with the intention of letting and be warned.....it's a minefield; a really complicated process which I'm still trying to understand. I bought as a private individual. From a rental point of view, it now appears it may have been easier to set up a company and buy in the company's name, however, that comes with other obligations, costs and perhaps tax implications later on. It's too late for me to this now anyhow. There also is a limit as to how much income you can earn on your property if you are renting as an Individual. I beleive it is up to 85,000 kune (i.e. £8500) you can rent as an individual. After that you have to either become a Croatian Company or a Trade and you have to charge VAT. I would love to hear from anyone who has found an effective way around these unbelievable complications!! I wish I'd known earlier what I was letting myself in for. Good luck!
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Letting
Mar 14, 2005 20:23:22 GMT 1
Post by Peter Ellis on Mar 14, 2005 20:23:22 GMT 1
Renting here has to be through the medium of a company, although whether this is your own company or that of a Croatian letting agency is up to you. Companies here with a turnover in excess of Kn85,000 are obliged to register for PDV(VAT) and the assumption is that if you are getting income in excess of this then you really should have a company, one way or the other. If you rent out through a locally registered letting company, they will be PDV registered and it will be simpler for you, as they will deal with the PDV and will also collect the tourist tax and pass it on for you. The tourist tax is infinitesimal, but paying it keeps you in the good books of the local authorities. Obviously, if you set up your own company, there will be the usual statutory reporting requirements, as anywhere else, but it needn't cost a lot. Caroline Hopkins, of Istria Property Management, who is based out here (info@istriapropertymanagement.com) is organising a package with a local English speaking accountant and because it will be offering everyone something similar, I don't think it will be as expensive as a one off.
Incidentally, foreigners, even if they have bought property, should still register with the local police or tourist office on arrival and departure. It is a legal requirement. If you stay in a hotel, as in most of Europe, this is done for you, but the requirement still remains even if you have your own holiday home here. It is just logging you in to the system. It becomes important if something happens, like a car accident, or you lose something, as then the police can be more helpful. Otherwise, given that they no longer take down your details at the border, they may say that so far as they are concerned, you are not in the country and depending on their workload and attitude, you could either face a ticking off or get less help. I would agree that the threshold for PDV registration here is very low; other countries usually set their equivalent at about ten times this, so that small businesses are not burdened with unnecessary form filling. However, I wouldn't describe it as a minefield. Every country has its own legislation and someone setting up a business in any country would be advised to take legal and accountancy advice before starting.
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Letting
Mar 14, 2005 23:15:06 GMT 1
Post by jonesclub on Mar 14, 2005 23:15:06 GMT 1
Thank you both for the information. It is very helpful. Does anyone know though of anyone who has been declined the ability to rent out by the local authority?
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