Affordable Housing Act open for public consultation

The Ministry of Physical Planning, Construction and State Assets has opened the proposal of the Affordable Housing Act for public consultation. The adoption of this act is envisaged by the National Housing Policy Plan of the Republic of Croatia until 2030 with the aim of modernising the current Act on State-Subsidised Housing Construction and responding to new housing challenges. The emphasis is put on sustainability, accessibility and balanced development of settlements and demographic revitalisation.

The Affordable Housing Act regulates systematically organised housing construction, acquisition of residential real estate financed or cofinanced through public funding, as well as housing stock management with the aim of ensuring affordable housing.
Target groups entitled to receive subsidies or housing care are defined by the Act: citizens with lower incomes, people under the age of 45, families with children, people with shortage occupations, people involved in precarious work, active military personnel, police officials, civil servants, public servants and employees in shortage occupations, people over the age of 65, citizens with limited access to healthcare and others who need housing support. The prerequisite is that they do not own adequate residential real estate.

For the first time, this Act introduces the term affordable housing to the Croatian legal system. It refers to housing where the rent price or the loan instalment for an apartment of a corresponding surface area, increased by average utility and maintenance costs, does not exceed 30% of the immediate family’s net income. The Act also determines the term non-profit housing cooperatives. They, in line with the cooperative’s rules, deal with construction, reconstruction, building management and maintenance for their members.

Bodies to implement the Act

The Act’s implementation is ensured by the Government of the Republic of Croatia through the Ministry, the Agency for Transactions and Mediation in Immovable Properties (APN) and local and regional self-government units. APN is the central body for investment activities.

Local and regional self-government units take part in implementing the Act by establishing public institutions, developing local housing programmes, providing land, cofinancing construction and adapting spatial plans. They follow the needs of citizens, collaborate with APN and may exempt projects from paying utility charges or facilitate their implementation in other ways.

The Act envisages developing the national Affordable Rental Programme (developed by APN), and local and regional self-government units will develop their programmes. This ensures affordable housing through building for this purpose in urban, peri-urban and rural settlements, defines locations, citizens’ needs, implementation measures, available resources and construction plans for apartments for rent or purchase.

The Act prescribes that buildings need to be designed according to the principles of rationality, modular construction and green infrastructure. At least 50% of apartments need to be designated for affordable rent, except in buildings comprising less than 10 apartments, where all apartments need to be designated for affordable rent.

The resources for construction are ensured by the Republic of Croatia, local and regional self-government units, APN and financial institutions. The use of state budget is envisaged, as well as different EU financing models and loans in the future.

Affordable purchase and rental prices

The Act envisages purchase and rental of apartments under affordable price, calculated according to actual construction costs and development indices of local self-government units. For rentals, affordable rent is determined in accordance with the overall income of immediate family, utility housing costs and real estate maintenance costs.

Buyers and tenants are selected through public calls and priority lists. For apartments purchased under affordable price, a prohibition on sale or lease applies for 35 years, while APN and local self-government units have pre-emption rights. Apartments can be purchased only through instalments under affordable conditions in terms of price, interest rates and repayment terms.

The Act also envisages allocating subsidies to citizens under the age of 45 for acquiring their first residential real estate. The subsidies can be given to target groups provided that they and their immediate family members do not own adequate residential real estate, or provided that they sell or donate inadequate real estate according to the conditions prescribed by the Act. Subsidies are allocated within the housing programme, and their form and intensity are determined by special documents based on the Act.

Subsidies for construction or reconstruction and activating vacant real estate

The Act also enables allocating subsidies for the construction of a new family house or the reconstruction of an existing residential building. Subsidies are allocated for the purpose of improving housing conditions, increasing energy efficiency, enhancing housing quality and ensuring adequate living space.

Activating vacant residential real estate represents a special mechanism which integrates existing, unused housing stock into the affordable housing programme with the aim of expanding the availability of apartments for rent without the need for new construction. The mechanism is carried out by APN, with financial support of the Republic of Croatia and potential participation of the local level.

Available residential real estate can be acquired from their owners and rented out under affordable rent by APN, provided that the real estate had not been used for at least two years prior to publishing the public call, i.e. provided that they are usable or require minor works.

APN and local public institutions manage apartments, business spaces and common areas of buildings. Financial surplus must be used only for further construction and stock maintenance, which ensures self-sufficiency of the system.

The Affordable Housing Act establishes a comprehensive and sustainable housing policy system in the long run which includes the state and national level authorities and the public sector. The Act creates prerequisites for demographic revitalisation, improved well-being of citizens and local community development, while it also contributes to creating quality living conditions, sustainable housing and equal opportunities for all citizens.

Interested and professional public can participate by giving their opinions, suggestions and remarks, upon prior registration, through the eConsultation portal no later than January 3, 2026.

News | Information