POS – Programme of state-subsidised housing construction

As a potential buyer of an apartment under the POS housing programme, contact the municipality or the city

The Programme of state-subsidised housing construction (POS) is implemented through construction of apartments, i.e. residential buildings, organised in a way that provides for purposeful use of public and other funds to cover expenses, ensures the repayment of these funds and provides for financing the purchase of an apartment by instalments under conditions more favourable than the market conditions as regards interest rates and repayment periods; in addition, the programme provides for renting of thus constructed apartments and a possibility for the tenant to purchase the apartment.
The POS Programme was launched with the aim of enabling citizens to solve their housing issues at considerably more favourable conditions than those on the market, and the 2019 Amendments to the Act provided additional options for solving the housing issue by allowing the purchasing of apartments on the free market, and by allowing the construction and purchase of apartments for the purpose of retaining or attracting deficient public service personnel, especially in underdeveloped areas and on islands.   
The conditions of the POS Programme that are more favourable than the market conditions are related to the line of credit and the apartment price per square metre.

Line of credit 

The POS Programme line of credit provides loans without guarantors, with an average interest rate under 3%, minimum related costs, with a repayment period of up to 30 years or, in the case of using a 1 year grace period, 31 years.

During the first period of repayment, which may not exceed 21 years, the buyer repays the funds loaned by the bank and, after payment of the debt to the bank, in the second period repays public and other funds belonging to the Republic of Croatia and the local self-government unit, as well as other persons who secured funds for construction, in proportion to their share in the apartment price. According to the latest Amendments to the Act from July 2019, the interest on public funds under repayment was reduced from 3% to 2% per year.  

Average sale price of apartments 

The average sale price of apartments per square metre of the useful floor area of the apartment, i.e. the floor area sold within a residential building, may not, pursuant to the Act on State-Subsidised Housing Construction, exceed the standard construction price per square metre increased by 50%.

The standard construction price amounts to 862,7 EUR (HRK 6,500.00) per square metre of the useful floor area of the apartment, which includes all costs of performing construction and other works (preparatory works, earthworks, construction works, installation works, finishing works and the incorporation of construction products, equipment or facilities) related to the construction of apartments, i.e. residential buildings including value added tax, excluding costs related to the land, development of utility infrastructure and the building’s infrastructure connections.

Thus, the maximum (highest) apartment price under the POS Programme amounts to EUR 1,319.64 per m² of the useful floor area of the apartment (payable in HRK at the midpoint exchange rate of the Croatian National Bank on the day of payment).

Who can participate in the POS Programme

The right to buy an apartment under the POS Programme is available to all citizens – nationals of the Republic of Croatia, with priority given to protected tenants who are using an apartment owned by a natural person, and those citizens who are acquiring a property for the first time and whose housing issue is not appropriately settled, i.e. they do not own a housing unit that is adequately equipped with utility infrastructure (water, sewerage, electricity) and that meets the hygienic and technical requirements for healthy housing, of the size of about 35 square metres of the usable floor area for one person, and about ten square metres for each further person.

Candidates must be creditworthy. Creditworthiness is established based on the prescribed documents that every candidate from the priority list shall submit to the commercial bank.

To prevent misuse at re-sale and renting out of apartments purchased under the POS Programme, the latest Amendments to the Act from July 2019 introduced the ban on the rent or sale of unpaid apartments purchased under the POS Programme, which is defined in the apartment purchase contract. Should a buyer of a POS apartment decide to sell or rent out the POS apartment, the Agency for Transactions and Mediation in Immovable Properties (APN) shall inform thereof the bank that has granted the loan, and the bank shall declare the loan’s full maturity and initiate compulsory payment collection. In such a case the POS apartment buyer shall have to pay to APN the difference between the contracted purchase price and the established market value of the property on the date of signing the contract. The state shall thus collect from such buyers all the funds invested in their subsidies, regardless of the point of time prior to loan expiration at which the apartment is offered for sale or rent.  The ban on selling or renting out POS apartments also applies to apartment purchase contracts concluded before entry into force of those Amendments to the Act, and for which a period of ten years from the date of their signing has not expired.

Procedure for purchasing a POS apartment

The procedure of apartment selection and purchase takes place in several steps: 
  1. Local self-government units carry out surveys on housing needs or announce a public call for apartment purchase under the POS Programme
  2. Presentation of the POS Programme upon announcement of the call for establishment of the Priority List
  3. APN, or the public institution and the local self-government unit respectively, sign a pre-contract on mutual rights and obligations regarding the construction of buildings under the POS Programme, as well as a contract on the transfer of property rights on land for the construction of buildings
  4. Implementation of a public tendering procedure for selection of the designer, with the participation of the City representative, development of design documents and obtaining of building permits
  5. Implementation of a public tendering procedure for selection of the contractor and supervisor, with the participation of the City representative, conclusion of the contract on construction and the contract on performance of the tasks of expert supervision and consulting
  6. Conclusion of the contract on mutual rights and obligations regarding the construction of the building under the POS Programme
  7. Construction of the building
  8. Presentation of apartments to candidates from the Final Priority List
  9. Selection of apartments
  10. Conclusion of preliminary apartment purchase contracts
  11. Buyers conclude loan contracts with commercial banks
  12. Completion of construction and obtaining of the use permit for the building
  13. Apartment inspection and takeover with buyers
Housing construction under the POS Programme is a long ago recognised programme of housing provision to young families that obtain, for a price lower than the market price per square meter, security and quality construction of their home. To date, under the POS Programme, more than eight thousand apartments have been built, with the total investment value exceeding 570.708.076,18 EUR (HRK 4.3 billion), in which the Republic of Croatia invested 145.995.089,26 EUR (HRK 1,1 billion) in the form of subsidies.