Minister Bačić: Goal is to halt rise in property prices and rents in Croatia

Hina - Construction Minister Branko Bačić said on Wednesday that the aim of the newly presented National Housing Policy Plan is to curb the rise in property prices, and consequently rental prices, in Croatia.

The plan includes activating state-owned flats as well as introducing a new Rental Housing Act.

"In order to achieve this goal of limiting price increases, we took several important steps at the end of last year, and these, along with other measures, will contribute to stabilising prices," Bačić said at a press conference following the government session.

He recalled that the government had already restricted the conversion of residential properties into short-term rentals through the Act on the Management and Maintenance of Multi-Residential Buildings. Additionally, under the Property Tax Act, tax is now applied to flats used for short-term rentals, and the flat-rate tax for renting has been increased.

Furthermore, Bačić announced that a special Affordable Housing Programme would encourage citizens who own empty flats to rent them out. According to estimates by the Croatian Bureau of Statistics (DZS) and the national electricity provider (HEP), there are nearly 600,000 empty flats in the country.

"Even if half of them are truly empty, and we manage to put just 10% of those 300,000 flats on the rental market, the increased supply would help stop rent price growth. To achieve this, the Ministry is preparing a programme to incentivise private owners of empty flats to make them available for rent through our agency," Bačić explained.

State-owned flats across Croatia are already being renovated by the state-owned property management company, Državne Nekretnine. At the same time, it will refurbish and rent at affordable rates unused flats of other government institutions and public enterprises.

"The new Rental Housing Act, which will be introduced this year, will strengthen the rights of both tenants and landlords, allowing them to rent properties without agency involvement while ensuring legal security. This will apply both to cases where a tenant fails to meet their obligations and when a landlord arbitrarily decides to evict a tenant," Bačić stated.

"These measures are just part of our efforts to stop property price increases by significantly expanding the number of flats available on the market," he added.

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