Croatia Prepares New Long-Term Rental Rules

Croatia is preparing an overhaul of its long-term housing rental market that is intended to apply from Jan. 1, 2027. The proposal would limit rent increases to once a year, require new leases to be notarised and introduce clearer termination deadlines. Landlords would also gain a new mechanism protecting them against unpaid obligations. As of Sept. 15, the law has not been adopted: public consultation ended on Sept. 2 and the proposal still has to complete the legislative process.

Rent could be increased only once a year

One of the main changes concerns rent reviews during an existing tenancy.

Landlords would be allowed to increase rent no more than once every 12 months and would have to notify tenants at least 30 days in advance.

The maximum increase would be tied to the annual growth rate of Croatia's official residential property price index. Any contractual provision allowing larger or more frequent increases would be void.

Under current market conditions, that still gives landlords considerable room to raise rents. Croatian dwelling prices increased 14.3% year on year in the first quarter of 2026. Prices rose 14.7% in Zagreb, 12.6% on the Adriatic coast and 18.1% in the rest of the country. At the same time, the number of residential property sales fell 42.2% by Croatian Bureau of Statistics.

The proposal is therefore not a rent freeze or conventional rent control. It is primarily intended to prevent landlords from changing the price arbitrarily during an existing contract.

New leases would have to be notarised

All new long-term rental agreements would have to go through a notary.

The resulting document is intended to be directly enforceable in qualifying cases involving unpaid obligations or eviction, removing the need for a separate lengthy civil lawsuit before enforcement can begin.

At move-in, the landlord and tenant would have to prepare a handover report describing the condition of the property, recording meter readings and including photographs of every room.

Unless the agreement states otherwise, landlords would be allowed to inspect the property twice a year after giving prior notice. The standard security deposit would be equal to one month's rent.

Tenants would be able to terminate the lease without giving a reason by providing 60 days' notice, according to details released by the Ministry of Physical Planning, Construction and State Assets, by Ministry of Physical Planning, Construction and State Assets.

Eviction deadlines would be set out more clearly

The proposal distinguishes between termination following a tenant's breach and termination when the tenant has done nothing wrong.

If a tenant fails to pay rent or utility bills, causes substantial damage or breaches other contractual obligations, the landlord must first issue a written warning. The tenant would have 15 days to remedy the problem.

If the breach continues, the period allowed for the tenant to leave could not be shorter than a further 30 days.

Protections are considerably stronger where a landlord terminates a lease without tenant fault. The minimum period for leaving would normally be six months. If the tenancy had lasted more than five years, the period would rise to one year. Where a child lives in the property, another six months would be added.

In certain cases the parties could agree on a shorter period, although it could not be less than three months.

For landlords, a central change is that enforcement could proceed on the basis of the notarised agreement when the legal conditions are met. Long and unpredictable proceedings to recover a property have been one of the reasons some owners cite for avoiding the formal long-term rental market.

Landlords could receive protection against unpaid rent

The proposal also gives a new role to Croatia's Agency for Insurance of Workers' Claims, or AORT.

Subject to specified conditions, the agency would cover certain landlord claims when tenants fail to meet their contractual obligations.

Participation would require a notarised lease submitted to the agency. Landlords would pay an annual fee capped at 2% of annual rent.

The proposal also calls for the tenant to provide the agency with a blank promissory note for up to €10,000. Minister Branko Bačić has estimated that the annual fee would amount to roughly €40–€150 for many landlords.

The mechanism is intended to reduce one of the financial risks associated with formal long-term renting: prolonged non-payment combined with the cost of recovering the debt.

Registered rental contracts have almost multiplied 2.5 times

The reform follows rapid growth in Croatia's registered rental market.

The number of recorded contracts has increased from about 100,000 to roughly 240,000 over the past six years, according to figures cited by Total Croatia News from State Secretary Željko Uhlir.

Around 75,000 contracts were added between 2024 and 2025 alone. Officials have linked part of the increase to the introduction of the real-estate tax, which encouraged some owners to formalise previously undeclared rentals.

Mandatory notarisation is expected to make the market more transparent and improve the flow of rental information to the tax authorities.

Property prices keep rising while sales fall

The reform is being prepared during another period of strong house-price growth.

The average selling price of new dwellings sold by companies and other legal entities, excluding state-subsidised POS housing, reached €3,012 per square metre in the first half of 2026. That was 8.9% higher than a year earlier.

In Zagreb, prices in this category increased 19.9% from the first half of 2025. The average across all monitored sales of new dwellings nationwide was €2,994 per square metre by Croatian Bureau of Statistics.

That makes the proposed rent-increase formula significant. Linking allowable increases to house prices would make rent changes more predictable, but in a market where property values are rising at double-digit rates it would not necessarily provide a strong affordability constraint.

Croatia is expanding its affordable-housing policy

The rental reform forms part of a broader housing-policy overhaul.

Parliament adopted the Affordable Housing Act in April, and it entered into force on May 7, 2026.

The law introduced a formal definition of affordable housing into Croatian legislation. Rent or mortgage payments, together with average utility and maintenance costs, should not exceed 30% of a household's net income.

The act passed with 79 votes in favour, one against and 38 abstentions and is intended to expand the supply of homes available for affordable purchase and long-term rental by Ministry of Physical Planning, Construction and State Assets.

The proposed Housing Rental Act addresses a different part of the market: the legal relationship between private landlords and tenants.

Short-term rentals face a separate regulatory change

The long-term rental reform should not be confused with Croatia's separate changes for tourist accommodation.

From 2027, owners of rooms, apartments, studio apartments and holiday homes advertised through digital short-term rental platforms will be required to obtain a registration number and display it in their listings.

The number will be issued free of charge by the Tourism and Sports Ministry. As of Sept. 15, the exact starting date has not yet been announced; the ministry says the requirement will take effect in early 2027 after adoption of the new Hospitality Act.

The system implements EU Regulation 2024/1028 on data collection and sharing for short-term accommodation rental services, by Ministry of Tourism and Sports data.

Property owners therefore face two distinct regulatory changes. Short-term tourist rentals are moving toward tighter digital registration, while the long-term market is being formalised through notarised contracts and more clearly defined rights and obligations.

The law is still a proposal

Public consultation on the Housing Rental Act ran from Aug. 3 to Sept. 2, 2026. The government must now process the feedback and move the legislation through the remaining procedure by Ministry of Physical Planning, Construction and State Assets.

The intended start date is Jan. 1, 2027. Until the final law is adopted, however, the proposed rent cap, notarisation requirement, AORT protection mechanism and termination periods should not be treated as rules already in force.

As experts at International Investment report, the proposal addresses a genuine imbalance in Croatia's rental market: tenants need predictable terms, while owners need a reliable way to recover unpaid rent and regain possession after serious breaches. The most questionable element is the decision to link maximum rent increases to house-price growth. When property values are rising by around 14%, such a ceiling may prevent sudden changes during a tenancy but does little by itself to improve affordability. The more important test will be whether stronger legal protection can bring additional properties out of the informal market and increase the supply of long-term rentals.

FAQ

When will Croatia's new rental rules take effect?

The government intends the new law to apply from Jan. 1, 2027. As of Sept. 15, 2026, however, it has not yet been adopted and still has to complete the legislative process.

How often could landlords increase rent?

The proposal allows rent to be raised no more than once a year, with tenants receiving at least 30 days' notice.

How large could a rent increase be?

The increase could not exceed the annual growth rate of residential property prices measured by Croatia's official house-price index.

Would leases have to be notarised?

Yes. The proposal requires new long-term rental agreements to be formalised through a notary.

How large would the security deposit be?

The standard deposit would equal one month's rent.

Could tenants terminate a lease themselves?

Yes. Tenants would be able to terminate without giving a reason by providing 60 days' notice.

What would happen after non-payment?

The landlord would first issue a written warning and give the tenant 15 days to remedy the breach. If it continues, the period for leaving could not be shorter than a further 30 days.

Do the new rules apply to Airbnb?

No. The Housing Rental Act concerns long-term tenancies. Short-term tourist rentals are subject to a separate framework, including mandatory registration numbers for listings on digital platforms from 2027.