Savings and investment

Housing savings and government incentives

Housing savings is a special-purpose savings arrangement which gives you the right to a more favourable housing loan and government incentives 

Within the meaning of the Act on Housing Savings and Government Incentives for Housing Savings, a housing savings arrangement means raising funds—deposits from national natural and legal persons in an organised manner to address the housing needs of users of housing savings by granting them housing loans with financial support from the government in the territory of the Republic of Croatia.

The applicable Act came into force on 1 January 1998. It prescribes the terms and conditions of housing savings and housing loans, as well as the conditions, criteria and process of granting and using government incentives to address citizens’ housing needs and the accompanying penalty provisions.

Housing savings

Housing savings funds are raised by specialised financial institutions—housing savings banks, which are established and operate in accordance with the provisions of the Credit Institutions Act.

Housing savings is a special-purpose savings arrangement, and housing savings banks grant to savings accounts users loans to address their housing needs. A housing loan is granted to:
  • Purchase an apartment or family home
  • Build an apartment or family home
  • Reconstruct, refurbish and renovate or furnish an apartment or family home
  • Purchase a building plot with or without a partially built building
  • Bring utilities to the building plot
  • Repay a disbursed housing loan granted by a credit institution. 

State incentives

Pursuant to Article 21 of the Act, government incentives for users of housing savings are given to housing savings banks from the state budget of the Republic of Croatia based on the information documented about the raised housing savings funds in the previous calendar year.

Government incentives (GIs) are paid in the percentage determined by the formula from the Act for the amount of the available housing savings deposits made in the year for which GIs are being paid, or for the maximum amount of 663.61 EUR of the available housing savings deposits per user of housing savings in the course of one calendar year. Available housing savings means the amount of housing savings deposits made by the user of housing savings in the course of one year after the deductions for the amounts of fees charged by the housing savings bank.
 
Pursuant to Article 26 of the Act, GIs and the accompanying interest will be paid to the user of housing savings if the user of housing savings:
  • Qualifies for a housing loan and concludes a loan agreement in accordance with this Act
  • Does not cancel the housing savings agreement before the expiry of five years from starting the housing savings
  • Terminates the housing savings agreement due to failure to meet legal and contractual obligations by the housing savings bank.
 
From the introduction of housing savings in 1998, the level of GIs has been defined by the Act as a fixed percentage, but it has been decreased several times so far. When housing savings were introduced, GIs amounted to 25 percent of the amount of the available housing savings deposits made in the year for which GIs were being paid, or they were paid for the maximum amount of 663.61 EUR of the available housing savings deposits per user of housing savings in the course of one calendar year.

With the amendments to the Act on Housing Savings and Government Incentives for Housing Savings of 2005, the GIs percentage was reduced from 25 percent to 15 percent, and with the amendments of 2013, it was reduced from 15 percent to 10 percent. As of 1 January 2014, GIs for housing savings deposits made in and carried forward from the previous years in the period between 1 January and 31 December 2014, are not paid from the state budget of the Republic of Croatia.

With the latest amendments to the legislation in 2014 or 2015, a variable amount of GIs was introduced, following the example of some European Union member states whose experience with variable amounts of GIs has been positive for many years. In this way, a stable legislative framework and a precondition for further development of the housing savings system were created.
 
Therefore, for housing savings deposits made on or after 1 January 2015, GIs are paid pursuant to the percentage determined by the formula from Article 21(2) of the Act, that is, they are paid as a variable percentage.

Government incentives for 2015
GIs for housing savings deposits made in 2015 equal 4.9 percent = a maximum of 32.52 EUR per user of housing savings (663.61 EUR of the available housing savings per user of housing savings * 4.9 percent = 32.52 EUR) in accordance with the Decision on the Amount of Government Incentives for Housing Savings Deposits Made in 2015 adopted pursuant to the Regulation on the Amendments to the Act on Housing Savings and Government Incentives for Housing Savings.
 
Government incentives for 2016
GIs for housing savings deposits made in 2016 equal 4.1 percent = a maximum of 27.21 EUR per user of housing savings (663.61 EUR of the available housing savings per user of housing savings * 4.1 percent = 27.21 EUR) in accordance with the Decision on the Amount of Government Incentives for Housing Savings Deposits Made in 2016.
 
Government incentives for 2017
GIs for housing savings deposits made in 2017 equal 3.3 percent = a maximum of 21.9 EUR per user of housing savings (663.61 EUR of the available housing savings per user of housing savings * 3.3 percent = 21.9 EUR) in accordance with the Decision on the Amount of Government Incentives for Housing Savings Deposits Made in 2017.
 
Government incentives for 2018
GIs for housing savings deposits made in 2018 equal 1.8 percent = a maximum of 11.95 EUR per user of housing savings (663.61 EUR of the available housing savings per user of housing savings * 1.8 percent = 11.95 EUR) in accordance with the Decision on the Amount of Government Incentives for Housing Savings Deposits Made in 2018.

Government incentives for 2019
GIs for housing savings deposits made in 2019 equal 1.2 percent = a maximum of 7.96 EUR per user of housing savings (663.61 EUR of the available housing savings per user of housing savings * 1.2 percent = 7.96 EUR) in accordance with the Decision on the Amount of Government Incentives for Housing Savings Deposits Made in 2019.
 
Government incentives for 2020
GIs for housing savings deposits made in 2020 equal 0.7 percent = a maximum of 4.65 EUR per user of housing savings (663.61 EUR of the available housing savings per user of housing savings * 0.7 percent = 4.65 EUR) in accordance with the Decision on the Amount of Government Incentives for Housing Savings Deposits Made in 2020.