Hina - The number of flats available for long-term rental has significantly increased over the past year in Croatia's five largest cities, Minister of Construction Branko Bačić said on Tuesday, crediting the government's legal measures for the trend.

According to Bačić, the main factor behind the increased supply is the Act on Building Management and Maintenance, which makes it much harder to offer flats for short-term rental.

"Flat owners must now obtain the consent of two-thirds of all co-owners in the building, as well as that of their immediate neighbours above, below, and on either side, before letting a flat short-term," Bačić explained following a cabinet meeting.

The aim, he added, is to restrict the commercial use of residential units and encourage their use for permanent housing.

He also cited the implementation of the Real Estate Tax Act, under which local authorities have been empowered to raise taxes on residential properties that are not used for living, including those let for short periods.

"However, in cities where the number of long-term rentals has increased, the tax per square metre has not gone up," the minister noted.

The third legislative instrument, he said, is the Income Tax Act, which raised the flat-rate tax per bed for short-term rentals, thereby further discouraging this form of letting.

"The government adopted a clear strategic approach: to bring residential units onto the long-term rental market, increase availability, and curb rising rental prices," Bačić said.

He added that rental prices are already beginning to fall in cities where long-term rental supply has grown.

The data cited, he said, refers to Zagreb, Split, Zadar, Šibenik, and Osijek.

News | Information