CROATIA Law and Practice Contributed by: Marko Paulinović and Dino Vukoša, Buterin & Partneri
3.10 Taxes on Loans In Croatia, there is no specific tax applicable to loans secured by real estate, nor to mezzanine loans related to real estate transactions. At present, there are no existing, pending or proposed legislative measures that would introduce additional taxes on such finan - cial instruments.
Special pandemic-related restrictions on lenders’ abil - ity to foreclose or realise collateral are no longer in force. 3.7 Subordinating Existing Debt to Newly Created Debt Pledge that is securing a claim may be subordinated to newly created debt by means of an agreement on ceding of the priority ranking. By such an agreement, a secured creditor consents to its security right hav - ing a lower priority ranking than a newly created or another existing security right. Such agreement must be executed in a form suitable for registration in the land register and produces legal effects vis-à-vis third parties only upon registration of the change of priority in the land register. 3.8 Lenders’ Liability Under Environmental Laws A creditor holding or enforcing security over real estate is generally not liable under the Environmental Protection Act, as the fundamental principle of envi - ronmental liability is that the polluter is responsible for the damage (see 2.7 Soil Pollution or Environmental Contamination ). 3.9 Effects of a Borrower Becoming Insolvent Security interests created by a borrower in favour of a lender (eg, a mortgage or pledge) do not become void solely because the borrower becomes insolvent or because bankruptcy proceedings have been opened against the borrower. A validly created and registered security interest remains in force, and the creditor has the status of a secured creditor with a right of separate satisfaction, enabling him or her in principle to satisfy their claim from the value of the encumbered property. However, certain legal acts undertaken prior to the opening of bankruptcy proceedings may be chal - lenged by means of avoidance actions if such acts disrupt the principle of equal treatment of creditors or place certain creditors in a more favourable position. In such cases, the legal act may be declared inef - fective with respect to the bankruptcy estate. Upon the opening of bankruptcy proceedings, individual enforcement proceedings are stayed, and secured creditors exercise their rights within the framework of the bankruptcy proceedings.
4. Planning and Zoning 4.1 Planning and Zoning Framework
Land use, development, design and construction are governed by several statutes and secondary regula - tions, the most important of which are spatial planning documents adopted at the national, regional and local levels. The principal statute is the Physical Planning Act, which regulates the spatial planning system, the types and content of spatial plans and the authorities responsible for their implementation. In addition, the Construction Act governs the design, construction, maintenance and use of buildings. The Environmental Protection Act establishes obliga - tions relating to environmental impact assessments, while the Cultural Heritage Protection and Preserva - tion Act applies to construction works and similar interventions affecting protected cultural heritage. In addition to these principal statutes, numerous by-laws also apply. The fundamental strategic document governing spa - tial development is the Spatial Development Strat - egy of the Republic of Croatia. Spatial planning is implemented through spatial plans of different levels, which determine land use and prescribe measures for its protection. These plans determine the purpose of land use (public, residential, commercial, etc), con - struction conditions and various other urban planning parameters. The principal spatial planning documents include: • the State Spatial Development Plan; • the County Spatial Plan; • the City or Municipal Spatial Plan;
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