EU warns Croatia about obstacles to property investment

The European Commission said yesterday it was looking into complaints filed by Italy that its citizens are being prevented from buying property in Croatia, a European Union candidate country which has become a top tourist destination in recent years. EU spokeswoman Krisztina Nagy said the Commission received a letter from the Italian government complaining of discrimination. She called on Croatia to ensure fair treatment and allow all EU nationals to buy real estate there. «Croatia has to make full and expedient use of its existing procedure for access to its real estate market. These procedures are cumbersome and lead to significant delays, which affect all nationalities,» she told reporters. She said that Zagreb had to live up to a current EU-Croatia pre-membership pact, which includes rules on fair treatment of non-Croatian nationals buying holiday homes there. She said the Commission, which is currently preparing to start technical negotiations on entry talks with Croatia, will continue to insist that the Balkan country streamline bureaucratic procedures involved in buying property «and takes measures to streamline the backlog of applications.» Under EU rules, citizens across the 25-nation bloc have the right to move and live freely in any of the 25 member states, including the right to buy property. In Zagreb, the Croatian Foreign Ministry insisted Croatia was fully implementing EU requests on real estate rights, «implying the principle of reciprocity, equally toward all foreign citizens, without discrimination.» It said, however, that the agreement with the EU also meant that Croatian nationals be given equal rights to buy property within the EU. In the case of Italy – but also Austria, Hungary, Greece and Poland – their citizens can buy real estate here «under certain conditions,» as Croatian citizens also have to fulfill certain conditions to buy real estates in those countries, the ministry said in a statement. Also yesterday, Croatian Prime Minister Ivo Sanader said the country should consider how to make its taxation system more appealing to foreign investors, but that did not necessarily mean the introduction of a flat tax. Some economists argue that flat taxation has helped several transition countries, such as Slovakia, raise their economic competitiveness. «A big advantage of flat taxation is that it is very sellable. But we have no proof that it alone could make an economy prosper. Our taxation system may be even better in some segments, but we have failed to market it,» Sanader told a conference organized by local employers’ association HUP. (AP/Reuters)