Long-term apartment rentals in Croatia: What owners need to know about the new measures

A new era of apartment rental: The rules of the game in the apartment rental market are fundamentally changing

Minister of Physical Planning Branko Bačić recently announced a series of legislative measures that will fundamentally change the Real Estate rental market in Croatia. For apartment owners who rent out apartments, this is not just another administrative change – this is a real tectonic shift that directly affects your pocketbook and your decision on how to deal with the Real Estate you own.

In short, the state has decided to aggressively encourage long-term rentals and regulate short-term ones . The result? Those who adapt in time will benefit, while those who wait could find themselves in trouble.

What exactly is changing: Key new measures

1. Tax pressure on short-term rentals

The government has introduced a special tax for short-term rental apartments ( Airbnb and similar platforms). The calculation is clear: if you rent short-term, you will pay more Real Estate taxes and additional fees. In short, the difference is huge. Short-term rental is treated as a hospitality business, and long-term as a rental business with taxes and fees that can eat up to 45-50% of income, plus increased Real Estate taxes. Long-term rental has a fixed tax of 30% without additional fees, which for an apartment with an income of €1,000 per month means a difference of over €180 in favor of long-term rental, with significantly less administrative work. This is not an announcement – this has already been underway since this year.

2. The state enters the rental business

The state plans to build 9,000 apartments for sale and rent by 2030. These apartments will be offered at more favorable prices , which will create competition for private owners in the long-term rental segment.

3. Registration and control

All short-term rental apartments will have to be registered in a special register, and inspections will be more serious. Minister Bačić also announced the digital monitoring of reservations via platforms.

Long-term vs. short-term rental: The real financial comparison

Many owners are on short-term rentals because they think it’s “more profitable”. But is that really so? Let’s look at the real figures for, for example, a 60 m² apartment in Zagreb:

Short-term rental (Airbnb)

• Monthly income: €1,800 (with 70% occupancy )
• Days off: 9-10 days per month
• Cleaning costs: €200 per month
• Rental tax: 30% (so far + additional charges)
• Net income: around €1,000 per month

Long-term rental

• Monthly rent: €900
• Rental tax: 30% (excluding surcharges)
• No cleaning costs
• No days off
• Net income: €630 per month

The difference is €370 per month , but long-term rental brings stability, less administration and zero stress around frequent guest changes. Short-term rental requires a minimum of 15-20 hours per month for communication, check-in/check-out and problem solving.

Benefits of long-term rentals for owners: Why it’s worth considering

1. Stability and predictability

You know exactly how much your rent will be the first and every following month. No surprises due to the season, no empty winter months.

2. Less administration and stress

No frequent guest changes, less cleaning, fewer complaints, fewer late-night calls.

3. Lower tax burden

Short-term rental is treated as a hospitality business, with much more fees and taxes. Long-term rental is a classic rental, with a fixed tax of 30% on the rent.

4. Less maintenance costs

Permanent tenants take care of their apartment as if it were their own home. Tourists are significantly less careful.

5. Opportunity for a more favorable loan

Banks are now increasingly looking at long-term rental apartments as a more secure source of income when approving loans for other properties.

Disadvantages and risks of long-term rentals: What to look out for

1. Lower monthly rent

Long-term rental yields, on average, 30-40% less local income than optimal short-term rental.

2. The problem of defaulters

In a long-term rental, if the tenant stops paying you, the eviction process can take months. In a short-term rental, the guest leaves in 3 days.

3. Price fixation

A long-term rental agreement is usually for 1 year. If market prices jump, you are locked in at a lower price.

4. Limited flexibility

If you want to use the apartment for personal purposes (e.g. vacation), a long-term contract restricts this.

What this means for renters: Finally more supply

If you’re looking for an apartment to rent, these measures are the news of the year. Increasing the supply of long-term rentals means:

• Lower prices (competition will put pressure on the price)
• More choices (especially in Zagreb, Split, Rijeka, Osijek, Zadar)
• Better quality apartments (owners will have to invest to differentiate themselves from the state offer)

Financial analysis: Is it worth switching to a long-term lease?

The decision depends on your goals and profile. Here’s a simple test:

Switch to a long-term lease if:

• You want passive income with minimal effort.
• You don’t have time to manage a short-term rental
• Your apartment is in a residential area (not a tourist area)
• You plan to own the property for more than 5 years

Stay on a short-term rental if:

• You want to maximize income regardless of risk
• The apartment is located in a tourist zone with constant demand
• You have the time and will for active management
• You are planning to sell a flat/apartment soon (short-term rental does not retain value)

What to look out for: Practical advice from the profession

1. Review your existing lease agreement

If you have a short-term rental, check the termination clauses. Some platforms require 30-90 days notice.

2. Prepare the apartment for long-term rental

Long-term tenants are looking for functional, not luxurious apartments. Invest in quality joinery and heating, not designer furniture.

3. Check credit obligations

Some loans have a clause that the property cannot be rented out for long-term without the bank’s approval. Check the contract.

4. Insurance is mandatory

For long-term rentals, it is essential to take out an insurance policy against damage caused by the tenant. The cost is around €150-200 per year, but it covers risks up to €50,000.

5. Choose the right tenant

For long-term rentals, check the creditworthiness of the tenant. Ask for a bank statement, proof of employment, and references from previous owners. This is extremely important.

Conclusion and Recommendations: Your Best Strategy

The new legal framework is not an attack on the owners – it is an opportunity ! The state clearly signals: long-term rent is the future. Those who adapt in time will profit in three ways:

1. Stable, predictable income without stress
2. Lower tax burden and less administration
3. Increased property value for future sale

Our recommendation for owners: If you are currently renting short-term, do not cancel immediately. Do it strategically – cancel reservations for the next tourist season and switch to a long-term lease from June 1, 2026. This gives you time to prepare and avoid penalties.

If you are considering buying an apartment or apartment for rent, focus on locations with high demand for long-term rentals (close to colleges, business centers, hospitals). It’s the new golden formula.

IMMOBELLA tip: Before making any decisions, make a financial simulation for your specific property. Or even better – contact us for a free consultation. We will analyze your situation and calculate the exact figures. Because in renting, as in Real Estate, there is no “one size fits all” – but there is the best solution for you!

Frequently asked questions

1. Do I have to switch to a long-term rental right away?
   No. Short-term rental penalties are being phased in gradually, but we recommend switching over the next 6-12 months.
2. What is the tax difference between short-term and long-term rentals?
   Short-term rentals are treated as hospitality activities with additional taxation. The difference can be 20-30% more in the total tax burden.
3. Can the state take away my apartment if I switch to a long-term lease?
   Not. Government apartments will be newly built and will compete with your offer on the market, but there is no mechanism for confiscating private apartments.
4. Are state-owned apartments cheaper?
   Yes. The state plans to set rents 20-30% below market prices for the first 5 years, in order to put pressure on the market and help tenants.
5. What is better: sell or switch to long-term rental?
   It depends on your goals. If you need cash – sell. If you want stable passive income – long-term rental. IMMOBELLA Real Estate Agency can help you with a financial analysis for your situation.