12. 2. 2020

Registration of title to real estate inherited in Croatia (or other EU member states)

Have you inherited real estate located in Croatia following the conclusion of inheritance proceedings in Slovenia? Well, the Croatian Land Register will not automatically register the title to the Croatian real estate in your name on foot of a Slovenian ruling. For some time now it has no longer been possible to file an application with a Croatian notary public on the basis of the "Slovenian" inheritance ruling in order to initiate an inheritance proceeding in Croatia – so, what now?

The current regulation in this area may have simplified the procedure. The regulation of inheritance abroad is based on the EU Regulation on Successions (Regulation), which determines that the inheritance of real estate abroad is decided by the court where the decedent had his last habitual residence - which means that the inheritance of real estate in Croatia will also be decided by a Slovenian court, if the decedent had his last habitual residence in Slovenia. Otherwise, the procedure is as follows:

1. In an inheritance proceeding before a Slovenian court, the court should be reminded at the time of the proceedings that the decedent was the owner of real estate in Croatia. Furthermore, an extract from the Croatian land register should be submitted or the property code should be stated exactly as it appears in the Croatian land register so that the court can include these details in its ruling on the inheritance of this property. The same applies to inheritance of real estate in other EU Member States.

2. Because the Regulation also determines that all relevant documentation, which is the basis for the opening of the succession must be attained in accordance with the Regulation, the heir that has inherited the real estate in Croatia must submit an application for a European Certificate of Succession to the (Slovenian) court. A special form is available where the same real estate has been inherited by several heirs.

3. Alongside the decision on the issue of the European Certificate of Succession (EU certificate Decision), the court also issues a special form of the European Certificate of Succession, which is valid for six months. The EU certificate Decision affixed with a finality seal and the form must then be translated (certified translation) by a court-certified translator for the Croatian language. These translated documents must then be submitted to the land register of the municipal court in Croatia with jurisdiction for the real estate concerned; no court fees are payable. It is only on the basis of the foregoing documents that the (Croatian) court will then register title in favour of the heir.

4. For tax assessment purposes, copies of the European certificate Decision and the European Certificate of Succession must also be submitted to the Croatian tax authority (Porezna uprava) in the locality where the real estate is located. Notwithstanding the fact that according to Croatian inheritance rules, heirs who inherit in the first line of succession (children inherit from parents or parents inherit from children) are exempt from paying inheritance tax, a tax return must be submitted to the tax administration, who then issues a decision determining that no tax is payable. Of course, inheritance tax must be paid on other lines of succession (second, third etc.).

The advantage of the procedure set out by the Regulation is that (generally) the same or similar arrangement is also applicable to the inheritance of real estate inherited in other EU countries, which provides greater transparency and, most often, simplifies the procedure.

Author: Dean Premec, Senior associate
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