From Umag to Vis: Record Increases in Property Taxes

The decision on the exact tax rate is made by local government units – cities and municipalities – in whose area the property is located, and according to data from the Ministry of Finance, reactions to the new taxation system are quite varied. We explore who has increased the tax amount the most, what this means for citizens, and how the new tax differs from the old one.

What do the numbers say?

According to the Ministry of Finance report from March 13, 2025, the property tax amount has been increased by 215 municipalities and cities, while 284 local government units kept the same amount as before. On the other hand, 57 of them even reduced the tax burden. Data from the Tax Administration show that the minimum rate of 0.6 euros per square meter is applied by 119 cities and municipalities, while the highest tax burden, ranging from 5 to 8 euros, was introduced by 73 local government units. This range reflects the different approaches of local authorities in adapting to the new legal possibilities.

Where is the tax the highest?

According to the Tax Administration tables, some municipalities and cities have reached the legal maximum of 8 euros per square meter, including Umag, Vis, Sveti Filip i Jakov, Fažana, and Baška Voda, while Bol follows with 7.5 euros, and Motovun with 7 euros. Among larger cities, the rates are milder: Zagreb and Rijeka set 5 euros, Split stopped at 1.99 euros, and Osijek applies a minimal 0.6 euros per square meter.

These figures highlight a clear difference between tourist-attractive destinations like Umag or Baška Voda, where rates have been raised the most, and larger urban centers that are more cautious about increasing the burden on their residents.

Why have the rates increased?

The new property tax was introduced by the Local Taxes Act, which came into effect on January 1, 2025, with local government units having until February 28 of the same year to decide on the rate. Unlike the previous tax on holiday homes, which had an upper limit of 5 euros per square meter, the new law allows a maximum rate of 8 euros. In addition to the property’s location, the tax amount can also be influenced by additional criteria such as the age of the building or the presence of amenities that increase its value, though the upper limit remains fixed.

Another significant change is the revenue distribution: 80% goes to the municipality or city, while 20% goes to the county. This is a novelty compared to the old system, where local units retained the entire revenue. Some cities, like Umag, justify their rate increases with this distribution, as they need to compensate for the portion of revenue now allocated to counties.

Who pays and who doesn’t?

The property tax applies to buildings not used for permanent residence, such as weekend homes, short-term rental apartments, or vacant flats. However, there are exceptions: owners do not pay tax on properties where they permanently reside, those in long-term rental (at least 10 months per year), or dilapidated properties or socially vulnerable cases, depending on the decision of the local government.

What does this mean for owners?

For an owner of a 50-square-meter apartment in Umag, where the rate is 8 euros, the annual tax amounts to 400 euros – significantly more than the previous 250 euros under the old system with a 5-euro limit. In Split, with the same area and a rate of 1.99 euros, the calculation drops to 99.5 euros per year. This difference shows how much location can impact ownership costs.

Tourist destinations like Vis or Fažana are clearly targeting higher revenues from properties used by foreigners or renters, while cities like Osijek, with a minimal rate, likely aim to maintain affordability for their residents.

The increase in property tax in 215 cities and municipalities demonstrates how local authorities are balancing fiscal needs with pressure on owners. While Umag, Vis, and Baška Voda lead with the highest rates, larger cities like Zagreb and Rijeka maintain moderate amounts, and Osijek stays at the lower limit. This new system, with an upper limit of 8 euros and revenue sharing with counties, brings changes that owners will feel in their wallets – especially in tourist zones. If you’re a property owner, check your municipality’s or city’s decision on the Tax Administration’s website and prepare for new financial burdens in 2025.