Starting from 2025, a new law will come into effect, introducing significant changes to the rules governing short-term apartment rentals in Croatia. One of the key updates is that renting apartments to tourists in residential buildings will no longer be considered part of family accommodation but will instead be treated as long-term rental. These changes aim to clearly distinguish between hosts offering authentic family accommodation and landlords focused solely on renting for profit, while also bringing important tax implications for property owners.
Key changes in the law
One of the most significant changes in the new law is the requirement for apartment owners renting to tourists to obtain the consent of other co-owners in residential buildings within five years. This measure is designed to prevent misuse and regulate the number of apartments rented to tourists. It will establish a clear boundary between traditional hosts who provide accommodation within their households and landlords engaged exclusively in tourist rentals without genuine interaction with guests.
Tax implications for “landlords”
The new law introduces a distinction in tax treatment between genuine hosts and those renting apartments in multi-apartment buildings solely for profit. Hosts, who aim to connect tourism with local life, will be able to enjoy a more favorable tax status. On the other hand, landlords whose primary income comes from short-term rentals without genuine ties to local communities will be subject to other regulations.
Distinction between hosts and “landlords”
Under the new law, a host is defined as someone who has registered their permanent residence in the same local unit where the accommodation property is located. This means that individuals renting apartments in multi-apartment buildings will not be able to enjoy the benefits reserved for traditional hosts, even if they live in close proximity to their rental properties. Additionally, owners of apartments in multi-apartment buildings will need to secure consent from 80% of other residents to continue renting. If this consent is not obtained within five years, their permits to conduct hospitality activities will be revoked.
Objective of the legislative changes
The Ministry of Tourism emphasizes that the goal of these legislative amendments is to protect traditional hosts who play an important role in maintaining the authenticity and quality of Croatia’s tourism offering. The partial shift from short-term to long-term rentals aims to reduce pressure on the real estate market as well as the impact of tourism on housing prices and rents. Ultimately, these changes seek to ensure the sustainability of tourism and the availability of housing for local residents, particularly young families.
Challenges and expectations
While the new law aims to regulate the “apartmentization” trend and mitigate the negative impact of mass short-term rentals on local communities, some opinions question the full effectiveness of these measures. Critics argue that the law could create additional divisions among landlords, particularly in relation to foreign property owners who are not subject to the same regulations under the new rules. Although the law introduces significant changes, striking a balance between market regulation and maintaining Croatia’s competitiveness and attractiveness as a tourist destination remains crucial.
Conclusion
The amendments to the Law on Hospitality Activities represent an important step in regulating the short-term rental market in Croatia. While the law primarily focuses on safeguarding the rights of local residents and ensuring tourism sustainability, time will be needed to evaluate the impact of these changes on the real estate market and landlords themselves. As the changes are already in effect, property owners are advised to adapt to the new conditions and seek professional assistance to fully comply with legal requirements.
