As a Croatian citizen working remotely - this would have been a much better deal pre-covid. Ever since we entered the eurozone and the EU funds started pouring in the prices skyrocketed (even compared to the rest of Europe, not just global inflation). Still worth looking into, but not a nobrainer like it was. Quality of life you used to be able to get for the mentioned 3.5k eur/month income was hard to get elsewhere in EU, but nowadays prices rose faster then the rest of Europe and quality of life stayed the same, a lot of other places in EU are competitive.
I've just come back from my first trip to Croatia, and this rings true. It's a beautiful place but the prices are high! To quote one of the taxi drivers I chatted to "all the prices have gone up, but is okay; wages have stayed same" - deadpan
Depends on what you are looking at - but yes. Wages also rose considerably, below inflation, but still I think thats the same story as everywhere else.
I think the main difference is that (in my opinion) Croatia used to be unbeatable for the price/quality of life ratio, nowadays it's probably slightly overpriced, but depends on what you value.
Is the cost of living inflation relative to income fuelling the current shift to the right in Croatian politics? This was on the international news yesterday: https://www.bbc.com/news/articles/cz60nyp3714o
Not really - there is no right shift, Croatia is very catholic and right leaning since the civil war. But at the same time the I would say it's mostly performative and not really that extreme as painted in the article.
if you want to travel down this conversational path you should probably choose a better example than people going to a rock concert of the country's biggest rock star , regarding the given example there are a few cans of worms to unpack that would result in massive deviation from the question at hand
It is something that is not well understood about the Euro, it is a deal with the devil, with all the hallmarks of looking like a wonderful idea where wishes and imagination blind one to the details and the tricks one opens oneself up to. It immensely benefits the ruling class and the upper class, and even foreigners at the expense of the working and middle class and the indigenous.
It was also that way for the Germans who are accused of having benefited at the expense of others, when that was really more an effect of national scale, not all Germans individually. The Euro has had an odd distorting and perverting effect all across Europe; but it has always generally been excellent for the ruling and upper class that have gained access to an overflowing trough of other people’s money at the EU.
The Euro has been a kind of wealth transfer mechanism to the ruling, upper, and even foreign classes, just as it has been a tool to restore the aristocracy just as it had in the USA; the aristocracy gets the money, the people get the inflation and debt that fuels the fraud.
We shall see if it all goes off the rails and the people establish legitimate democratic rule, or if the authoritarian aristocracy can fully entrench itself again.
You ain't seen nothing yet. Wait till they join the Euro. Housing is gonna get even more expensive. But hey at least imported knickknacks are gonna get cheaper.
Yeah but you can't compare living in Vienna and Split - Vienna is a top tier city - huge regional capital with so many things going on and offerings. Split is a C tier city dead outside of tourist season, like the rest of the coast. 26% is kind of ridiculous when you compare the standard of living.
Again depends on what you value, some might find it worth, just saying the equation was much more in Croatia favor 5 years ago.
Split has great weather for much longer than Vienna, and people are almost certainly spending time there to be next to the sea, islands, etc. – of which Vienna has none.
I didn't pick Vienna as a comparison, I just said that cost of living and living standards between two are very much out of proportions.
But you can compare to cities in Italy, Spain, Greece, etc. the choice is nuanced and based on what you value. It used to be a clear win for Croatia a while back.
“Living standards” includes things like access to the sea and better weather.
Not everyone cares about having access to the urban amenities that Vienna has. Split is also a pretty nice place, even off-season (I once lived there for 3 months February-April.)
That is why the costs of living between the two are not as disparate as you might expect.
Yes but you can also live in other cities in Europe on the coast with similar or lower prices and different tradeoffs. This is my entire point - this was not the case a few years ago - I would say all the comparable coastal regions in the EU were more expensive.
Some people care about sea and islands but others care about culture and arts and Vienna wins on that? If sea and islands is what you want, most of south Asia is loads cheaper than Croatia!
There are other tax exemptions in Croatia that might still make it worth it - especially in FIRE setting.
While say The Netherlands taxes your investments such as Stocks/ETFs (not their earnings/capital-gain/etc but literally just owning stocks/ETFs/etc) - in Croatia those are not taxed after you've held them for 1 or 2 years (don't recall if 1 or 2).
Similar (owning stocks/ETFs not taxed) in Serbia, Malta, Cyprus ...etc.
As Portuguese, I can relate as I have seen what the euro has brought, positive and negatively as well.
For example 1 euro = 200.482 escudos, and when euro came we had stuff happening like 50 cents escudos becoming 50 cents in euro, I bet something similar has happened in Croatia.
Those 50 cents across coins are naturally not the same value, especially when the income wasn't suffered the same valuation across monetary systems.
Yes I believe Portugals and Croatias stories are very similar, your capital being a coastal city probably makes it even worse with regards to tourist inflation.
Unfortunally tourist inflation, digital nomads, and foreign pensionists have driven house prices sky high, prevented the usual system of house renting for university students and people unable to buy houses, with crazy rents, as landlords rather profit from foreigners, thus that is how we end with a mostly right goverment, the far right having a large majority, with my parents and many others having fought the dictatorship for nothing.
But Lisbon is, which is why Portugal situation is likely even worse (that was what I was trying to say). I can only imagine Zagreb prices if it was on the coast.
This appears to coincide with the rapid rise of my wealthier friends taking extended holidays in Croatia. It wasn’t the cool thing to do, now suddenly it’s a must-see place. I didn’t get the memo about that, apparently. I wonder if it’s having an impact or if it’s just a local phenomena that feels far larger to me
That ... doesn't matter?
Croatia approves under 1k nomad visas per year.
I don't know why people are concerned that nomads will anyhow affect housing supply given that today Croatia has 500k fewer people than it had 20 years ago.
Croatia is beautiful. Yesterday I have returned to Warsaw from a week-long vacation in Croatia.
There is this one thing I can't seem to grasp: Croatia and Poland have almost the same GDP per capita, but why are the prices in Croatia roughly 2x compared to Poland while the infrastructure and quality of life are visibly way lower than those in Poland? What is the proposition? Like, just the sea and the weather?
Because Croatia is a tourist destination that became wildly popular lately, especially after Game of Thrones hype and COVID flight bans. There's literally millions of Europeans going there every year and prices have been skyrocketing as a consequence.
No one really goes to Poland for it's summer weather or the coast.
Can you share more specific place(s) in Poland and Croatia for your "infrastructure and quality of life" being 2x different? And what infra and what are you looking at for QOL?
And the weather - well personally I haven't been in Croatia around New Years.
But last few weeks (it's same every year) it was 37-40°C - too hot. While in May you still need to turn on heating (or light a fire).
And from the rest of family that grew up in the Croatian coast (Dalmatia) - winters sound pretty crappy due to winds. Also because it's mostly still above 0°C snow is rare.
My wife said that as kid, they had to drive her to other part of then Yugoslavia for her to finally see real snow.
Croatia is beautiful, well connected and has low taxes. Capital gain tax is 12%. It's a very important consideration although some other countries in the area are even more attractive tax wise but then there are trade-offs (more remote, worse infrastructure, not as beautiful).
Wow, that's fantastic.
I may consider Croatia as the base for retirement in the future if that stays.
Nothing annoys me more about EU countries' tax system as giving all the tax breaks to real estate investors and punishing stock investors with heavy CGT.
It's been around for a while, with its advantages and drawbacks. What's going to happen in the future to make it more attractive? The current trend is on deglobalization
Politics are making it more complicated. Many countries are taking a less friendly stance on foreigners occupying valuable real estate and pushing prices higher without assimilating the culture. Like anything, the real answer is, “it depends”.
I live in Portugal, and there is a robust debate around this topic. It's far from ridiculous, and nationality laws are in the process of changing as a component of this discussion.
Also, many countries are "tightening down" their golden visa programs or removing them entirely. I have a friend who works for a golden visa consultancy, and they're already in the process of pivoting because of so many changes.
> I live in Portugal, and there is a robust debate around this topic.
Assumed it was somewhere in that region because my European friends usually talk about it. Personally find it bizarre because the few thousand digital nomads are barely moving the needle compared to tourism or normal migration. It comes across as people getting very upset about a minor issue because they have rigid ideological views that prevent them from touching the main one. A convenient scapegoat but nothing will change in the slightest if the Portugese DN visa is scrapped.
You've created the easiest pathway to a EU passport and then wonder why the planet flocks there.
The simple solution here is to build enough housing to meet demand.
I agree with you. It's purely political. The country has shifted to the right because of rhetoric around immigrants being the reason for everyone's problems. I do not agree with it, but I'm seeing it every day, and it does suggest that DN may be less viable as time goes on.
I don't think it's ridiculous, you might even argue we're at "peak" digital nomad. There's definitely pushback building, here's an example from recently:
‘There’s an arrogance to the way they move around the city’: is it time for digital nomads like me to leave Lisbon?
I know the guardian can be very hand wringy, but digital nomads are going to get swept up in the general anti-migration narrative that most populaces are now feeling. Anti-mass-migration in most populations, anti-tourist in Venice, anti-nomad in Portugal.
Locals are feeling betrayed by their politicians and foreigners are an easy target to point at and say "why is this happening". The Lisbon example is especially egregious, with the digital nomads being taxed less than locals. Locals are subsidizing their lifestyles.
Same feelings towards non-nomadic Expats in The Netherlands - because of the "30% tax free for Expats".
Meanwhile the truth is that some 15-20 years ago - Dutch government introduced that "30% tax rule" as a cost saving measures.
Previously expats in The Netherlands would collect bills/receipts for expatriation related expenses (e.g. language classes, international school for kids, differences in cost of living/housing ...etc).
And processing those tax claims was so much bureaucracy that Dutch government realized just giving expats 30% of gross income tax free for 10 years (reduced to 8 and then 5 years) is both less money than actual expenses used to be, and much less paperwork/cost.
And let's not forget that (definitely for non-nomadic expats, though arguably also for digital nomads) country didn't need to pay their birth/growing up, education ...etc.
And (especially for digital nomads) might not need to cover the costs for their old age health, retirement and such.
> but digital nomads are going to get swept up in the general anti-migration narrative that most populaces are now feeling
Can you name one digital nomad visa that has been scrapped in the last year or two?
I can name a few dozen that have been implemented.
When I started in 2017 there was maybe 3 or 4 places you could move on Earth with a six figure USD salary as a remote worker, it was always a grey zone to go places on tourist visas but that's how people rolled and countries knew how good a deal it was for them compared to raising/educating/supporting locals so let it slide. There's over 70 legal valid options now for remote workers in 2025.
The easily proven evidence doesn't stack up with the narrative people and newspapers likes the Guardian are trying to push for clicks.
I personally couldn't care less if locals don't like me. My own countrymen are jealous about me having a good paying remote job too.
It doesn't matter what they contribute to the government and local communities, the digital nomad visa wasn't built with that in mind.
Digital nomads make landlords and property owners richer so there's a high chance the system will be allowed indefinitely since a lot of Croatians are property owners so they directly or indirectly benefit from this gentrification.
The system will only be challenged in politics once enough young Croatian voters find themselves priced out of their own cities like in Barcelona or Lisbon.
The local economy also gains from the small but continuous spend on restaurants and cafes etc, and the spend is encouraged to be year-round and not just in peak holiday season.
>The local economy also gains from the small but continuous spend on restaurants and cafes etc
Speaking as someone living in Austria ATM, that's the worst kind of industry you want to boost if you want more money in the community, as it only creates dead-end low wage unskilled jobs(often taken by seasonal immigrants who send that money home) and is rife with cash-driven tax evasion, leading to more wealth and income disparity. If you get more and richer tourists, you won't get better paid baristas or waiters with better pension plans, but wealthier business owners who will buy more properties and flashy cars while still hiring the cheapest most desperate labor possible from abroad.
As a government, you should do the opposite, focus on attracting or creating highly skilled innovation jobs (like NL or Sweden did) and the hospitality jobs will follow naturally.
There's a reason countries where the tourism industry is a big part of the GDP, are low income countries.
> The system will only be challenged in politics once enough young Croatian voters find themselves priced out of their own cities like in Barcelona or Lisbon.
Outside of the direct coastal areas that already struggle with this issue from tourism, the brain drain that followed the 90s Independence War still left a sizable amount of empty real estate just sitting around.
And even in the direct coastal areas... a place to live is cheap. In doubt, just buy it, usually young people pool together some cash from relatives and some from bank loans to get started. Or they build it piece by piece, floor by floor, just like my grandparents did. Work a few years in a good job abroad, return to the homeland, build a house.
>young people pool together some cash from relatives
Where's my cash from my relatives? Guess I should have picked better parents.
>Or they build it piece by piece, floor by floor, just like my grandparents did.
Yes I'm sure building a house today is like in the 1950s. Same rules and regulations. I buy a small piece of land in the city and can just start laying bricks after work and then live in them.
> With what money? Doesn't matter, just buy it bro!
Work in Germany, set aside money, go back to Croatia. Land and construction costs are really cheap compared to Germany. It's a common thing in Croatia.
> Yes I'm sure building a house today is like in the 1950s. Same rules and regulations. I buy a small piece of land in the city and can just start laying bricks after work and then live in them
You still can do that today and extend an existing structure after the initial permit/inspection. All you need is the lower stories be solid enough statically, and you can't use that to get around zoning limitation on building height/story count. And yes, you can even do that in the motherhood of bureaucracy that's colloquially called Germany.
No, it's a transitionary step before Governments introduce more comprehensive taxation regimes. You already can't work even a single day in many developed countries with becoming liable to the local taxation regime and as desirable locations developer, they inevitably have to restrict access due to overcrowding and taxation (along with visa availability) is the key lever available.
What AI is doing very effectively is allowing tax authorities to identify digital nomads illegally working in jurisdictions without registering for tax.
I think the purpose of digital nomad visa is exactly to get their taxes. As opposed to say Germany where it's close to impossible to work for a overseas company even as a citizen, not to say get a visa for that
No, that's not the case for the most part. For example, the Croatian digital nomad residence permit that this article is about provides an exemption to income tax for earned income while working for a foreign company and living in Croatia. This means that most digital nomads can work tax-free in Croatia.
This contrasts with, for example, Ireland, where not only does a digital nomad's income become subject to local tax on day 1, so does their company (if they are the beneficial owner).
Croatia's approach is excellent if you want many wealthy (compared to local standards) people to bring an influx of hard currency into your economy, at the cost of inflation. Eventually the benefits outweigh the costs and the government begins to subject digital nomads to local taxation and stricter visa rules.
The benefit is similar to remittances - you get a huge influx of hard currency as digital nomads freely spend their high salaries. That does create jobs and raises tax revenue through consumption taxes and downstream employment. It's very similar to tourism - digital nomads are effectively semi-permanent tourists.
However, like tourism, it causes inflation, prices out locals, and can detract from more sustainable, natural economic growth (the so-called tourism curse). So like tourism, developed economies inevitably place limits on digital nomads.
That can take the form of stricter visas, capped numbers, or by implementing tax reforms.
Since digital nomads use the same public infrastructure and amenities as the people who live and work there, why shouldn't they also pay the same taxes?
> As opposed to say Germany where it's close to impossible to work for a overseas company even as a citizen
That's by design of our employment laws. We are the ones whose social security system will have to pay up when the employer closes down shop or fires their remote employees over night, and we are the ones whose health system has to take care when people burn out from being overworked, so we demand that employers create a local subsidiary with people and bank accounts we can hold accountable when laws are being violated.
Oh, and we also want to make sure that people and companies pay their taxes.
I wouldn't say it is necessary by design, as it is not forbidden and definitely possible. It's just Germany can't handle the complexity of its bureaucracy. Every new government promises to alleviate the bureaucratic burden, but in the end only adds exceptions on top of exceptions making the burden even heavier. So for remote work setup either the worker or the employer should carry it, and it's rarely worth it.
Well, that's what the problem is. When all you as an US startup want is to hire a single or maybe a dozen Europeans, you can either go and pay them in cash or as sole-proprietors and leave the employees to deal with the rest (as long as the US gov't gets its taxes, you're in the clear from the IRS point of view), you hire some intermediate body-shop, or you do it the proper way and pay a loooooot of money for a subsidiary.
You can contract with companies wherever you want as a company but you can only have an employment contract with a company based where the employment laws of your country applies.
It does make sense, but it also is pretty hard to work as a contractor being located in Germany. The main issue is that contractors don't by default pay pension contributions, so the pension fund hunts down those it considers "fake contractors" under a complicated and ambiguous set of rules.
> The main issue is that contractors don't by default pay pension contributions, so the pension fund hunts down those it considers "fake contractors" under a complicated and ambiguous set of rules.
It's not that complicated. The rules are relatively easy: as soon as you're embedded into the organization of the client (aka, you get laptops/desktops from them, get directed by their staff what you have to do) and/or the dominant part of your time / income is one single client, the assumption is that the client only does "contracting" to avoid the obligations (in wages, social security contributions and employee protection laws) that regular employment would bring with it.
The only issue that I have with the current regulatory framework is that the individual "sole proprietors" are held financially accountable for the social security contributions, not those who actually profit from this kind of abuse.
That seems extremely backward to me. Is that specific to certain contracting status or is that the case for any kind of contracting?
People should be free to contract if they want. Obviously that means they are now acting company-like and have to pay social contribution like a company would but that should be on the contractor not on the client. That’s how things work everywhere in Europe I had to deal with contracting.
Not really German specific, this is also the same situation in many European countries.
The main goal is to prevent contracting with a single client as means for companies to get rid of employees and their social security responsabilities.
Anyone contracting with a single client can eventually go to court and demand to be employed by the client, proving that the relationship has been one of employee/employeer, even though the contract was a freelance one.
> Is that specific to certain contracting status or is that the case for any kind of contracting?
It's specific for "sole proprietor" contractors. Multi-person operations, consultancies and bodyshops are exempt as long as the employees get their contributions paid.
> Obviously that means they are now acting company-like and have to pay social contribution like a company would but that should be on the contractor not on the client.
That is possible, indeed, you can voluntarily pay pension contributions (and that's the stuff that the pension fund claws back). You can also voluntarily contribute to the unemployment benefits.
As long as you at least pay the pension contributions, you're fine. The unemployment benefits is voluntary, no penalties if you don't pay these, but also, no payouts when you gotta close down shop.
The problem is, good luck finding a client willing to pay appropriate rates - too much unfair competition from those who just hope that neither they nor the client end up in a colonoscopy-level tax audit in 10 years (the time frame in which the statute of limitations for tax crimes expires), and the sad reality is that this gamble often enough pays off.
Even I, who doesn't require anyone to be in any sort of office (we don't even have one) only hire people from the same country my company is registered in. I've hired full time employees from other countries before, but it's quite the hassle bureaucracy wise.
So yeah, I'm sure it's possible to find remote work from Croatia, especially in Europe cause it's a bit less hassle to employ someone across borders between EU countries. But I do think the chances of finding even a remote job are higher if you're based in a country with plentiful employers.
I work mostly remote, but do have those days that I am required to be on the office per month, and when working from another EU country is allowed, usually requires approval and is regulated how many days per month as well.
It’s actually a terrible toxic idea that guarantees that anywhere beloved, prized, peaceful or beautiful becomes unaffordable as international jet setting tech people nurse a single cappuccino with their laptops in family-run cafés all around the world while driving up the price of property.
The only way a country should approach digital nomads is to charge them massive flat fees and change the law to allow local planners to zone them out of most accommodation.
The arrival of digital nomads will not fundamentally drive up a country’s or a city’s housing prices, as they usually only rent. Renting has no direct impact on the development of local housing prices. On the contrary, the influx of digital nomads can actually increase the income of most low-cost countries, since they will inevitably spend money locally.
Renting does have direct impact on housing prices. As the price landlords pay for units is based on rent they can get. If rent they can get goes up, so does the amount they are willing to pay.
more renters than apartments/homes => rents go up => cap rate goes up => new home prices go up. it isn't instant obviously, but if the renters keep coming and new developments don't accelerate, prices will keep going up. see bay area for a market that keeps going up for two decades or whatever.
> Renting has no direct impact on the development of local housing prices.
Ehh??? Sorry this is wholly untrue. Landlords get easy, often zero-deposit mortgages on houses and then let them out to make money. Of course this affects local house prices, because it absorbs housing stock.
Particularly in long-established, geographically bounded, attractive European towns and cities where there is no possibility of growing the housing stock fast enough to compete.
More to the point, the reason we know the arrival of digital nomads will drive up house prices is that they absolutely already have done, everywhere they have been courted.
I am living in a Digital Nomad hotspot, and you are painting a dystopian picture that is not reality. Most DNs I know work either from Home or Coworking Spaces, which have sprawled up everywhere. You pay around 150-250€/month for your own desk.
There are also now "coworking cafés", that usually target DNs and Coworkers by charging a flat fee (i.e. 5€ a day) a give either a free coffee included, or 10%-20% rebate on drinks/food. These cafés are specifically setup for Laptops (i.e. single table layouts). Other cafés that had those "nursing people" simply put up signs disallowing laptops - which is at every café owners discretion to do so.
In my experience, the local starbucks is crowded with tourists and their laptops (or tablets with keyboards), but these folks are not DNs, they are just waiting for their plane or airbnb to get ready.
Regarding property price and high rent, this discussion is pretty stupid. Every country wants richer-than-average people to come and pay taxes and/or spend their money. I often hear the bogus argument that DNs don't pay taxes which is bullshit, because even DNs pay taxes indirectly, as every amout they spend is someone elses taxable income (this includes rent). If they don't come, those incomes won't exist and no taxes be paid.
Most places in Europe bring in millions of poor immigrants, while some countries (most prominently spain) the people complain about rich immigrants...
I live in what's not exactly a digital nomad hotspot, but they do come. You pay 150€/month for a coworking space in a city where some people pay 300-400€/month rent. These digital nomads come here, pay absurd amounts of rent without blinking an eye.
And the tax thing is not a bogus argument. When people only pay taxes indirectly, they are tourists. Digital nomads pay _much_ less tax overall than other people, because people who pay income tax pay indirect taxes as well. If the digital nomads don't come, they also wouldn't raise rent and café prices for everyone around them. You come here, register yourself as a freelancer and pay income tax? You're very welcome in my book. But if you come to the country to leech off its cheap prices but don't pay income tax, you can go back where you came from.
We bring in millions of poor immigrants for various reasons: It's the human thing to do, these immigrants do cheap and hard labor that a lot of natives won't do (think construction, food delivery, etc.) and as such even provide benefits to us.
Digital Nomads mostly aren't immigrants. They come for a limited time, don't provide much to the local economy outside spending some money (and even then it's not that much because a lot of them come to cheap countries to live for cheap and save money) and then leave again. It's not really comparable.
> When people only pay taxes indirectly, they are tourists. Digital nomads pay _much_ less tax overall than other people, because people who pay income tax pay indirect taxes as well
Bad argument, as the alternative is the DN (just as the tourist) simply not coming to the island. If a DN spends 2000€ a month, that is 2000€ taxable income for someone else. If the DN doesn't come someone else makes 2000€ less of income. This does not compare to people living in the place, as they are there no matter what. Every cent of foreign money flowing into your economy ON TOP is a bonus. It is only bad if it removes someone else who would spend that money, but that is not the case.
And if you would argue that the economy does not need more foreign money and you do not want productivity and wealth increase and have stay things as they are, you are advocating socalism - look at cuba, venezuela or argentina how that worked out.
Well, that only counts if you see the DN as a net positive. Similar to tourists, a lot of people see DN as a net negative because they spend some money, sure, but they also raise rent and hospitality prices. This can harm local communities and economies because it may benefit few people over many or change where people have to go live.
Places relying on tourism as economic activity are very susceptible to economic crisis and it can even go as far as suppressing generation of jobs in other sectors and people leaving because you only find jobs in tourism or you can't afford to live in the city because Digital Nomads live there already. This is obviously exaggerated to make a point, but I think the point still stands in smaller scale.
Foreign money flowing in does not need to be a bonus. DN have the potential to change the microeconomy and in ways that affect your macroeconomy much more than just money flowing in.
Take a place like Barcelona, a famous example for people not being able to live there anymore due to high prices. On top of that, a lot of digital nomads don't interact much with local culture. When people start leaving, is the influx of DN money really still a net positive? Especially considering some of them don't even pay income tax?
I don't want to demonize immigration, but people moving somewhere and treating it like a cheaper version of their hometown is not a positive in any way, culturally or economically.
I am not arguing for socialism by saying that people coming and spending some money (not even that much) is not a sustainable way to do economy. I've got no problem with foreign investors building things that are actually valuable to the economy by building up industry, creating jobs or whatever. Cuba, Venezuela and Argentina have a whole lot of different problems and the reasons they are in the positions they are are much more nuanced than "socialism bad".
> Take a place like Barcelona, a famous example for people not being able to live there anymore due to high prices.
I always hear this bullshit "People can't afford to live there anymore". That is complete nonsense, because unless there are deserted buildings and empty apartments, people DO live there and people CAN afford it. Just not you.
I feel like either you're really dense or you're misunderstanding me on purpose.
It's exactly my point that mist people can't afford to live their because they're being priced out by foreigners. Most people native to such an area see that as a net negative, regardless of how much you want to dress it up as people coming and spending their money.
I understand you perfectly clear, but to me you are spreading socialist ideas. If prices are high for a given scarce resource, it is because of high demand. Now you want to basically cut off demand (less foreigners, DNs) for prices to go down. But you do need the high price signal in order to create an incentive to create more of that resources.
In the case of the EU (I'm a german EU citizen living in another EU state) we are all equal in terms of freedom of movement. There are no "locals" that have for some reasons more rights to any resources than anyone else. Giving "locals" preferential rights is completely unfair, as this would be excercising some kind of birth right.
I myself getting priced out of vintage german sportscars myself, could we please cut the rights for non-germans to buy up those cars so I can afford one again? You can see how ridicioulous that would sound.
I think there's multiple things coming together. I'm in no way arguing to forbid immigration, I'm just pointing out that I don't think Digital Nomads are a net positive and that there are real economic consequences beyond "they spend money so it's good".
I also specifically said I don't have a problem with anyone coming. You're welcome. I expect people that come to to a country to pay income tax there (as is usually required by law), but I'm in no way arguing to "cut off demand".
Arguing that someone who would want to close borders and stop immigration (both of which policies I don't support at all, btw) is socialist is a bit far fetched. As I said, I welcome immigrants. Immigration brings with it a whole class of problems that need be addressed, but that doesn't mean it should be forbidden.
And lastly, there's also a big difference between housing a vintage cars. One is an essential need, the other is not. You getting priced out of vintage cars, a luxury item, is not nearly as bad as you getting priced out of housing. That is a real problem that is actually happening in a lot of places, not some weird fantasy.
As a Croatian citizen working remotely - this would have been a much better deal pre-covid. Ever since we entered the eurozone and the EU funds started pouring in the prices skyrocketed (even compared to the rest of Europe, not just global inflation). Still worth looking into, but not a nobrainer like it was. Quality of life you used to be able to get for the mentioned 3.5k eur/month income was hard to get elsewhere in EU, but nowadays prices rose faster then the rest of Europe and quality of life stayed the same, a lot of other places in EU are competitive.
I've just come back from my first trip to Croatia, and this rings true. It's a beautiful place but the prices are high! To quote one of the taxi drivers I chatted to "all the prices have gone up, but is okay; wages have stayed same" - deadpan
In fairness, you could make the same glum joke in most if not all of the developed world over the last 5 years.
Depends on what you are looking at - but yes. Wages also rose considerably, below inflation, but still I think thats the same story as everywhere else.
I think the main difference is that (in my opinion) Croatia used to be unbeatable for the price/quality of life ratio, nowadays it's probably slightly overpriced, but depends on what you value.
Is the cost of living inflation relative to income fuelling the current shift to the right in Croatian politics? This was on the international news yesterday: https://www.bbc.com/news/articles/cz60nyp3714o
Not really - there is no right shift, Croatia is very catholic and right leaning since the civil war. But at the same time the I would say it's mostly performative and not really that extreme as painted in the article.
if you want to travel down this conversational path you should probably choose a better example than people going to a rock concert of the country's biggest rock star , regarding the given example there are a few cans of worms to unpack that would result in massive deviation from the question at hand
It is something that is not well understood about the Euro, it is a deal with the devil, with all the hallmarks of looking like a wonderful idea where wishes and imagination blind one to the details and the tricks one opens oneself up to. It immensely benefits the ruling class and the upper class, and even foreigners at the expense of the working and middle class and the indigenous.
It was also that way for the Germans who are accused of having benefited at the expense of others, when that was really more an effect of national scale, not all Germans individually. The Euro has had an odd distorting and perverting effect all across Europe; but it has always generally been excellent for the ruling and upper class that have gained access to an overflowing trough of other people’s money at the EU.
The Euro has been a kind of wealth transfer mechanism to the ruling, upper, and even foreign classes, just as it has been a tool to restore the aristocracy just as it had in the USA; the aristocracy gets the money, the people get the inflation and debt that fuels the fraud.
We shall see if it all goes off the rails and the people establish legitimate democratic rule, or if the authoritarian aristocracy can fully entrench itself again.
FWIW Warsaw or Prague also got ridiculously expensive (esp. housing) without a Euro
You ain't seen nothing yet. Wait till they join the Euro. Housing is gonna get even more expensive. But hey at least imported knickknacks are gonna get cheaper.
Still not to bad, don't scare people off. Here are some comparisons of cost of living - to Vienna, but you can choose what to compare.
For example living in Split is cca 26% cheaper than Vienna.
https://www.numbeo.com/cost-of-living/compare_cities.jsp?cou...
https://www.numbeo.com/cost-of-living/compare_cities.jsp?cou...
https://www.numbeo.com/cost-of-living/compare_cities.jsp?cou...
Yeah but you can't compare living in Vienna and Split - Vienna is a top tier city - huge regional capital with so many things going on and offerings. Split is a C tier city dead outside of tourist season, like the rest of the coast. 26% is kind of ridiculous when you compare the standard of living.
Again depends on what you value, some might find it worth, just saying the equation was much more in Croatia favor 5 years ago.
This is not a good comparison.
Split has great weather for much longer than Vienna, and people are almost certainly spending time there to be next to the sea, islands, etc. – of which Vienna has none.
I didn't pick Vienna as a comparison, I just said that cost of living and living standards between two are very much out of proportions.
But you can compare to cities in Italy, Spain, Greece, etc. the choice is nuanced and based on what you value. It used to be a clear win for Croatia a while back.
“Living standards” includes things like access to the sea and better weather.
Not everyone cares about having access to the urban amenities that Vienna has. Split is also a pretty nice place, even off-season (I once lived there for 3 months February-April.)
That is why the costs of living between the two are not as disparate as you might expect.
Yes but you can also live in other cities in Europe on the coast with similar or lower prices and different tradeoffs. This is my entire point - this was not the case a few years ago - I would say all the comparable coastal regions in the EU were more expensive.
Some people care about sea and islands but others care about culture and arts and Vienna wins on that? If sea and islands is what you want, most of south Asia is loads cheaper than Croatia!
And much cheaper in real terms, as the Croatian digital nomad residence permit provides an exemption from income tax on earned income.
There are other tax exemptions in Croatia that might still make it worth it - especially in FIRE setting.
While say The Netherlands taxes your investments such as Stocks/ETFs (not their earnings/capital-gain/etc but literally just owning stocks/ETFs/etc) - in Croatia those are not taxed after you've held them for 1 or 2 years (don't recall if 1 or 2).
Similar (owning stocks/ETFs not taxed) in Serbia, Malta, Cyprus ...etc.
As Portuguese, I can relate as I have seen what the euro has brought, positive and negatively as well.
For example 1 euro = 200.482 escudos, and when euro came we had stuff happening like 50 cents escudos becoming 50 cents in euro, I bet something similar has happened in Croatia.
Those 50 cents across coins are naturally not the same value, especially when the income wasn't suffered the same valuation across monetary systems.
Yes I believe Portugals and Croatias stories are very similar, your capital being a coastal city probably makes it even worse with regards to tourist inflation.
Unfortunally tourist inflation, digital nomads, and foreign pensionists have driven house prices sky high, prevented the usual system of house renting for university students and people unable to buy houses, with crazy rents, as landlords rather profit from foreigners, thus that is how we end with a mostly right goverment, the far right having a large majority, with my parents and many others having fought the dictatorship for nothing.
Zagreb isn't a coastal city.
But Lisbon is, which is why Portugal situation is likely even worse (that was what I was trying to say). I can only imagine Zagreb prices if it was on the coast.
This happened even in Germany though the DM/E rate was 2 Marks = 1 Euro but some things magically went from 2 DM to 2 Euro
Same in The Netherlands
Not sure it's just those EU funds.
As Serbian/Dutch with wife from Croatia - I can definitely say that prices didn't rise only in Croatia.
Basically same % rise in (non-EU) Serbia, and The Netherlands.
Possibly elsewhere too - but NL/CRO/SRB is where were have family and spend enough time to really know.
This appears to coincide with the rapid rise of my wealthier friends taking extended holidays in Croatia. It wasn’t the cool thing to do, now suddenly it’s a must-see place. I didn’t get the memo about that, apparently. I wonder if it’s having an impact or if it’s just a local phenomena that feels far larger to me
That ... doesn't matter? Croatia approves under 1k nomad visas per year. I don't know why people are concerned that nomads will anyhow affect housing supply given that today Croatia has 500k fewer people than it had 20 years ago.
Croatia is beautiful. Yesterday I have returned to Warsaw from a week-long vacation in Croatia.
There is this one thing I can't seem to grasp: Croatia and Poland have almost the same GDP per capita, but why are the prices in Croatia roughly 2x compared to Poland while the infrastructure and quality of life are visibly way lower than those in Poland? What is the proposition? Like, just the sea and the weather?
Because Croatia is a tourist destination that became wildly popular lately, especially after Game of Thrones hype and COVID flight bans. There's literally millions of Europeans going there every year and prices have been skyrocketing as a consequence.
No one really goes to Poland for it's summer weather or the coast.
Can you share more specific place(s) in Poland and Croatia for your "infrastructure and quality of life" being 2x different? And what infra and what are you looking at for QOL?
And the weather - well personally I haven't been in Croatia around New Years.
But last few weeks (it's same every year) it was 37-40°C - too hot. While in May you still need to turn on heating (or light a fire).
And from the rest of family that grew up in the Croatian coast (Dalmatia) - winters sound pretty crappy due to winds. Also because it's mostly still above 0°C snow is rare.
My wife said that as kid, they had to drive her to other part of then Yugoslavia for her to finally see real snow.
https://mup.gov.hr/aliens-281621/stay-and-work/temporary-sta...
Croatia is beautiful, well connected and has low taxes. Capital gain tax is 12%. It's a very important consideration although some other countries in the area are even more attractive tax wise but then there are trade-offs (more remote, worse infrastructure, not as beautiful).
CGT is applicable only if held <2 years, otherwise no CGT
Wow, that's fantastic. I may consider Croatia as the base for retirement in the future if that stays. Nothing annoys me more about EU countries' tax system as giving all the tax breaks to real estate investors and punishing stock investors with heavy CGT.
For FIRE - maybe check out Serbia (IIRC >1 year no CGT) as well as Greece, Malta, Cyprus ...etc.
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I believe digital nomadism is the trend of the future, and AI is making solo businesses increasingly complete and efficient.
It's been around for a while, with its advantages and drawbacks. What's going to happen in the future to make it more attractive? The current trend is on deglobalization
Politics are making it more complicated. Many countries are taking a less friendly stance on foreigners occupying valuable real estate and pushing prices higher without assimilating the culture. Like anything, the real answer is, “it depends”.
This is a ridiculous claim probably very biased by a local worldview given that the number of DN visas has exploded in the last 2 years.
I've been working remote for 8 years now and it's never been easier and the amount of options worldwide is unreal.
I live in Portugal, and there is a robust debate around this topic. It's far from ridiculous, and nationality laws are in the process of changing as a component of this discussion.
Also, many countries are "tightening down" their golden visa programs or removing them entirely. I have a friend who works for a golden visa consultancy, and they're already in the process of pivoting because of so many changes.
> I live in Portugal, and there is a robust debate around this topic.
Assumed it was somewhere in that region because my European friends usually talk about it. Personally find it bizarre because the few thousand digital nomads are barely moving the needle compared to tourism or normal migration. It comes across as people getting very upset about a minor issue because they have rigid ideological views that prevent them from touching the main one. A convenient scapegoat but nothing will change in the slightest if the Portugese DN visa is scrapped.
You've created the easiest pathway to a EU passport and then wonder why the planet flocks there.
The simple solution here is to build enough housing to meet demand.
I agree with you. It's purely political. The country has shifted to the right because of rhetoric around immigrants being the reason for everyone's problems. I do not agree with it, but I'm seeing it every day, and it does suggest that DN may be less viable as time goes on.
I don't think it's ridiculous, you might even argue we're at "peak" digital nomad. There's definitely pushback building, here's an example from recently:
‘There’s an arrogance to the way they move around the city’: is it time for digital nomads like me to leave Lisbon?
https://www.theguardian.com/world/2025/jul/27/lisbon-portuga...
I know the guardian can be very hand wringy, but digital nomads are going to get swept up in the general anti-migration narrative that most populaces are now feeling. Anti-mass-migration in most populations, anti-tourist in Venice, anti-nomad in Portugal.
Locals are feeling betrayed by their politicians and foreigners are an easy target to point at and say "why is this happening". The Lisbon example is especially egregious, with the digital nomads being taxed less than locals. Locals are subsidizing their lifestyles.
"Locals are subsidizing their lifestyles"
Same feelings towards non-nomadic Expats in The Netherlands - because of the "30% tax free for Expats".
Meanwhile the truth is that some 15-20 years ago - Dutch government introduced that "30% tax rule" as a cost saving measures.
Previously expats in The Netherlands would collect bills/receipts for expatriation related expenses (e.g. language classes, international school for kids, differences in cost of living/housing ...etc).
And processing those tax claims was so much bureaucracy that Dutch government realized just giving expats 30% of gross income tax free for 10 years (reduced to 8 and then 5 years) is both less money than actual expenses used to be, and much less paperwork/cost.
And let's not forget that (definitely for non-nomadic expats, though arguably also for digital nomads) country didn't need to pay their birth/growing up, education ...etc.
And (especially for digital nomads) might not need to cover the costs for their old age health, retirement and such.
> but digital nomads are going to get swept up in the general anti-migration narrative that most populaces are now feeling
Can you name one digital nomad visa that has been scrapped in the last year or two?
I can name a few dozen that have been implemented.
When I started in 2017 there was maybe 3 or 4 places you could move on Earth with a six figure USD salary as a remote worker, it was always a grey zone to go places on tourist visas but that's how people rolled and countries knew how good a deal it was for them compared to raising/educating/supporting locals so let it slide. There's over 70 legal valid options now for remote workers in 2025.
The easily proven evidence doesn't stack up with the narrative people and newspapers likes the Guardian are trying to push for clicks.
I personally couldn't care less if locals don't like me. My own countrymen are jealous about me having a good paying remote job too.
And so they should. It looks like a fun trend until you realise how little digital nomads give back and how much they take.
It doesn't matter what they contribute to the government and local communities, the digital nomad visa wasn't built with that in mind.
Digital nomads make landlords and property owners richer so there's a high chance the system will be allowed indefinitely since a lot of Croatians are property owners so they directly or indirectly benefit from this gentrification.
The system will only be challenged in politics once enough young Croatian voters find themselves priced out of their own cities like in Barcelona or Lisbon.
The local economy also gains from the small but continuous spend on restaurants and cafes etc, and the spend is encouraged to be year-round and not just in peak holiday season.
>The local economy also gains from the small but continuous spend on restaurants and cafes etc
Speaking as someone living in Austria ATM, that's the worst kind of industry you want to boost if you want more money in the community, as it only creates dead-end low wage unskilled jobs(often taken by seasonal immigrants who send that money home) and is rife with cash-driven tax evasion, leading to more wealth and income disparity. If you get more and richer tourists, you won't get better paid baristas or waiters with better pension plans, but wealthier business owners who will buy more properties and flashy cars while still hiring the cheapest most desperate labor possible from abroad.
As a government, you should do the opposite, focus on attracting or creating highly skilled innovation jobs (like NL or Sweden did) and the hospitality jobs will follow naturally.
There's a reason countries where the tourism industry is a big part of the GDP, are low income countries.
> There's a reason countries where the tourism industry is a big part of the GDP, are low income countries.
Unreal that you can't see the obvious logical flaw in this argument.
As opposed to your bad faith comment that argues nothing and just breaks HN rules?
> The system will only be challenged in politics once enough young Croatian voters find themselves priced out of their own cities like in Barcelona or Lisbon.
Outside of the direct coastal areas that already struggle with this issue from tourism, the brain drain that followed the 90s Independence War still left a sizable amount of empty real estate just sitting around.
And even in the direct coastal areas... a place to live is cheap. In doubt, just buy it, usually young people pool together some cash from relatives and some from bank loans to get started. Or they build it piece by piece, floor by floor, just like my grandparents did. Work a few years in a good job abroad, return to the homeland, build a house.
>In doubt, just buy it
With what money? Doesn't matter, just buy it bro!
>young people pool together some cash from relatives
Where's my cash from my relatives? Guess I should have picked better parents.
>Or they build it piece by piece, floor by floor, just like my grandparents did.
Yes I'm sure building a house today is like in the 1950s. Same rules and regulations. I buy a small piece of land in the city and can just start laying bricks after work and then live in them.
> With what money? Doesn't matter, just buy it bro!
Work in Germany, set aside money, go back to Croatia. Land and construction costs are really cheap compared to Germany. It's a common thing in Croatia.
> Yes I'm sure building a house today is like in the 1950s. Same rules and regulations. I buy a small piece of land in the city and can just start laying bricks after work and then live in them
You still can do that today and extend an existing structure after the initial permit/inspection. All you need is the lower stories be solid enough statically, and you can't use that to get around zoning limitation on building height/story count. And yes, you can even do that in the motherhood of bureaucracy that's colloquially called Germany.
>And yes, you can even do that in the motherhood of bureaucracy that's colloquially called Germany.
So why isn't anyone doing it?
No, it's a transitionary step before Governments introduce more comprehensive taxation regimes. You already can't work even a single day in many developed countries with becoming liable to the local taxation regime and as desirable locations developer, they inevitably have to restrict access due to overcrowding and taxation (along with visa availability) is the key lever available.
What AI is doing very effectively is allowing tax authorities to identify digital nomads illegally working in jurisdictions without registering for tax.
I think the purpose of digital nomad visa is exactly to get their taxes. As opposed to say Germany where it's close to impossible to work for a overseas company even as a citizen, not to say get a visa for that
No, that's not the case for the most part. For example, the Croatian digital nomad residence permit that this article is about provides an exemption to income tax for earned income while working for a foreign company and living in Croatia. This means that most digital nomads can work tax-free in Croatia.
This contrasts with, for example, Ireland, where not only does a digital nomad's income become subject to local tax on day 1, so does their company (if they are the beneficial owner).
Croatia's approach is excellent if you want many wealthy (compared to local standards) people to bring an influx of hard currency into your economy, at the cost of inflation. Eventually the benefits outweigh the costs and the government begins to subject digital nomads to local taxation and stricter visa rules.
What's the benefit to have rich people in your country if they don't pay taxes and don't create any meaningful amount of jobs?
The benefit is similar to remittances - you get a huge influx of hard currency as digital nomads freely spend their high salaries. That does create jobs and raises tax revenue through consumption taxes and downstream employment. It's very similar to tourism - digital nomads are effectively semi-permanent tourists.
However, like tourism, it causes inflation, prices out locals, and can detract from more sustainable, natural economic growth (the so-called tourism curse). So like tourism, developed economies inevitably place limits on digital nomads.
That can take the form of stricter visas, capped numbers, or by implementing tax reforms.
> That does create jobs and raises tax revenue through consumption taxes and downstream employment. It's very similar to tourism
Oh wow! A bunch of poorly paid service jobs!
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Since digital nomads use the same public infrastructure and amenities as the people who live and work there, why shouldn't they also pay the same taxes?
Nomads and even more permanent expats use less of the infrastructure and amenities.
Not just for periods before and after they are living there - also during their stay.
For example. If they (nomads) lose their (remote) job - they won't get social benefits payments like the "locals".
They (nomads) also don't accrue retirement/pension which is usually part of income taxes.
And of course they pay all the other "taxes".
If they rent/buy anything - there's VAT. If they drive around in their car - they pay registration, insurance, road tax, highway tolls.
Pretty sure they also need to purchase some sort of health insurance.
I think it's up to each country. Some jurisdictions have done very well from allowing digital nomads.
Personally, though, I think they should be subject to local taxes and I'm glad they are in my country.
> As opposed to say Germany where it's close to impossible to work for a overseas company even as a citizen
That's by design of our employment laws. We are the ones whose social security system will have to pay up when the employer closes down shop or fires their remote employees over night, and we are the ones whose health system has to take care when people burn out from being overworked, so we demand that employers create a local subsidiary with people and bank accounts we can hold accountable when laws are being violated.
Oh, and we also want to make sure that people and companies pay their taxes.
I wouldn't say it is necessary by design, as it is not forbidden and definitely possible. It's just Germany can't handle the complexity of its bureaucracy. Every new government promises to alleviate the bureaucratic burden, but in the end only adds exceptions on top of exceptions making the burden even heavier. So for remote work setup either the worker or the employer should carry it, and it's rarely worth it.
As someone working mostly remote across DACH, it is possible, but naturally the official residence and taxes have to be here.
Well, that's what the problem is. When all you as an US startup want is to hire a single or maybe a dozen Europeans, you can either go and pay them in cash or as sole-proprietors and leave the employees to deal with the rest (as long as the US gov't gets its taxes, you're in the clear from the IRS point of view), you hire some intermediate body-shop, or you do it the proper way and pay a loooooot of money for a subsidiary.
I think it makes a lot of sense personally.
You can contract with companies wherever you want as a company but you can only have an employment contract with a company based where the employment laws of your country applies.
It does make sense, but it also is pretty hard to work as a contractor being located in Germany. The main issue is that contractors don't by default pay pension contributions, so the pension fund hunts down those it considers "fake contractors" under a complicated and ambiguous set of rules.
> The main issue is that contractors don't by default pay pension contributions, so the pension fund hunts down those it considers "fake contractors" under a complicated and ambiguous set of rules.
It's not that complicated. The rules are relatively easy: as soon as you're embedded into the organization of the client (aka, you get laptops/desktops from them, get directed by their staff what you have to do) and/or the dominant part of your time / income is one single client, the assumption is that the client only does "contracting" to avoid the obligations (in wages, social security contributions and employee protection laws) that regular employment would bring with it.
The only issue that I have with the current regulatory framework is that the individual "sole proprietors" are held financially accountable for the social security contributions, not those who actually profit from this kind of abuse.
That seems extremely backward to me. Is that specific to certain contracting status or is that the case for any kind of contracting?
People should be free to contract if they want. Obviously that means they are now acting company-like and have to pay social contribution like a company would but that should be on the contractor not on the client. That’s how things work everywhere in Europe I had to deal with contracting.
Germany really is a puzzling country.
Not really German specific, this is also the same situation in many European countries.
The main goal is to prevent contracting with a single client as means for companies to get rid of employees and their social security responsabilities.
Anyone contracting with a single client can eventually go to court and demand to be employed by the client, proving that the relationship has been one of employee/employeer, even though the contract was a freelance one.
> Is that specific to certain contracting status or is that the case for any kind of contracting?
It's specific for "sole proprietor" contractors. Multi-person operations, consultancies and bodyshops are exempt as long as the employees get their contributions paid.
> Obviously that means they are now acting company-like and have to pay social contribution like a company would but that should be on the contractor not on the client.
That is possible, indeed, you can voluntarily pay pension contributions (and that's the stuff that the pension fund claws back). You can also voluntarily contribute to the unemployment benefits.
As long as you at least pay the pension contributions, you're fine. The unemployment benefits is voluntary, no penalties if you don't pay these, but also, no payouts when you gotta close down shop.
The problem is, good luck finding a client willing to pay appropriate rates - too much unfair competition from those who just hope that neither they nor the client end up in a colonoscopy-level tax audit in 10 years (the time frame in which the statute of limitations for tax crimes expires), and the sad reality is that this gamble often enough pays off.
Good luck finding companies that after covid don't require at least a couple of days per month on site, other than startups eager for personal.
Even I, who doesn't require anyone to be in any sort of office (we don't even have one) only hire people from the same country my company is registered in. I've hired full time employees from other countries before, but it's quite the hassle bureaucracy wise.
So yeah, I'm sure it's possible to find remote work from Croatia, especially in Europe cause it's a bit less hassle to employ someone across borders between EU countries. But I do think the chances of finding even a remote job are higher if you're based in a country with plentiful employers.
I work mostly remote, but do have those days that I am required to be on the office per month, and when working from another EU country is allowed, usually requires approval and is regulated how many days per month as well.
It’s actually a terrible toxic idea that guarantees that anywhere beloved, prized, peaceful or beautiful becomes unaffordable as international jet setting tech people nurse a single cappuccino with their laptops in family-run cafés all around the world while driving up the price of property.
The only way a country should approach digital nomads is to charge them massive flat fees and change the law to allow local planners to zone them out of most accommodation.
The arrival of digital nomads will not fundamentally drive up a country’s or a city’s housing prices, as they usually only rent. Renting has no direct impact on the development of local housing prices. On the contrary, the influx of digital nomads can actually increase the income of most low-cost countries, since they will inevitably spend money locally.
Renting does have direct impact on housing prices. As the price landlords pay for units is based on rent they can get. If rent they can get goes up, so does the amount they are willing to pay.
more renters than apartments/homes => rents go up => cap rate goes up => new home prices go up. it isn't instant obviously, but if the renters keep coming and new developments don't accelerate, prices will keep going up. see bay area for a market that keeps going up for two decades or whatever.
> Renting has no direct impact on the development of local housing prices.
Ehh??? Sorry this is wholly untrue. Landlords get easy, often zero-deposit mortgages on houses and then let them out to make money. Of course this affects local house prices, because it absorbs housing stock.
Particularly in long-established, geographically bounded, attractive European towns and cities where there is no possibility of growing the housing stock fast enough to compete.
More to the point, the reason we know the arrival of digital nomads will drive up house prices is that they absolutely already have done, everywhere they have been courted.
I am living in a Digital Nomad hotspot, and you are painting a dystopian picture that is not reality. Most DNs I know work either from Home or Coworking Spaces, which have sprawled up everywhere. You pay around 150-250€/month for your own desk. There are also now "coworking cafés", that usually target DNs and Coworkers by charging a flat fee (i.e. 5€ a day) a give either a free coffee included, or 10%-20% rebate on drinks/food. These cafés are specifically setup for Laptops (i.e. single table layouts). Other cafés that had those "nursing people" simply put up signs disallowing laptops - which is at every café owners discretion to do so.
In my experience, the local starbucks is crowded with tourists and their laptops (or tablets with keyboards), but these folks are not DNs, they are just waiting for their plane or airbnb to get ready.
Regarding property price and high rent, this discussion is pretty stupid. Every country wants richer-than-average people to come and pay taxes and/or spend their money. I often hear the bogus argument that DNs don't pay taxes which is bullshit, because even DNs pay taxes indirectly, as every amout they spend is someone elses taxable income (this includes rent). If they don't come, those incomes won't exist and no taxes be paid.
Most places in Europe bring in millions of poor immigrants, while some countries (most prominently spain) the people complain about rich immigrants...
I live in what's not exactly a digital nomad hotspot, but they do come. You pay 150€/month for a coworking space in a city where some people pay 300-400€/month rent. These digital nomads come here, pay absurd amounts of rent without blinking an eye.
And the tax thing is not a bogus argument. When people only pay taxes indirectly, they are tourists. Digital nomads pay _much_ less tax overall than other people, because people who pay income tax pay indirect taxes as well. If the digital nomads don't come, they also wouldn't raise rent and café prices for everyone around them. You come here, register yourself as a freelancer and pay income tax? You're very welcome in my book. But if you come to the country to leech off its cheap prices but don't pay income tax, you can go back where you came from.
We bring in millions of poor immigrants for various reasons: It's the human thing to do, these immigrants do cheap and hard labor that a lot of natives won't do (think construction, food delivery, etc.) and as such even provide benefits to us.
Digital Nomads mostly aren't immigrants. They come for a limited time, don't provide much to the local economy outside spending some money (and even then it's not that much because a lot of them come to cheap countries to live for cheap and save money) and then leave again. It's not really comparable.
> When people only pay taxes indirectly, they are tourists. Digital nomads pay _much_ less tax overall than other people, because people who pay income tax pay indirect taxes as well
Bad argument, as the alternative is the DN (just as the tourist) simply not coming to the island. If a DN spends 2000€ a month, that is 2000€ taxable income for someone else. If the DN doesn't come someone else makes 2000€ less of income. This does not compare to people living in the place, as they are there no matter what. Every cent of foreign money flowing into your economy ON TOP is a bonus. It is only bad if it removes someone else who would spend that money, but that is not the case.
And if you would argue that the economy does not need more foreign money and you do not want productivity and wealth increase and have stay things as they are, you are advocating socalism - look at cuba, venezuela or argentina how that worked out.
Well, that only counts if you see the DN as a net positive. Similar to tourists, a lot of people see DN as a net negative because they spend some money, sure, but they also raise rent and hospitality prices. This can harm local communities and economies because it may benefit few people over many or change where people have to go live.
Places relying on tourism as economic activity are very susceptible to economic crisis and it can even go as far as suppressing generation of jobs in other sectors and people leaving because you only find jobs in tourism or you can't afford to live in the city because Digital Nomads live there already. This is obviously exaggerated to make a point, but I think the point still stands in smaller scale.
Foreign money flowing in does not need to be a bonus. DN have the potential to change the microeconomy and in ways that affect your macroeconomy much more than just money flowing in.
Take a place like Barcelona, a famous example for people not being able to live there anymore due to high prices. On top of that, a lot of digital nomads don't interact much with local culture. When people start leaving, is the influx of DN money really still a net positive? Especially considering some of them don't even pay income tax?
I don't want to demonize immigration, but people moving somewhere and treating it like a cheaper version of their hometown is not a positive in any way, culturally or economically.
I am not arguing for socialism by saying that people coming and spending some money (not even that much) is not a sustainable way to do economy. I've got no problem with foreign investors building things that are actually valuable to the economy by building up industry, creating jobs or whatever. Cuba, Venezuela and Argentina have a whole lot of different problems and the reasons they are in the positions they are are much more nuanced than "socialism bad".
> Take a place like Barcelona, a famous example for people not being able to live there anymore due to high prices.
I always hear this bullshit "People can't afford to live there anymore". That is complete nonsense, because unless there are deserted buildings and empty apartments, people DO live there and people CAN afford it. Just not you.
I feel like either you're really dense or you're misunderstanding me on purpose.
It's exactly my point that mist people can't afford to live their because they're being priced out by foreigners. Most people native to such an area see that as a net negative, regardless of how much you want to dress it up as people coming and spending their money.
I understand you perfectly clear, but to me you are spreading socialist ideas. If prices are high for a given scarce resource, it is because of high demand. Now you want to basically cut off demand (less foreigners, DNs) for prices to go down. But you do need the high price signal in order to create an incentive to create more of that resources.
In the case of the EU (I'm a german EU citizen living in another EU state) we are all equal in terms of freedom of movement. There are no "locals" that have for some reasons more rights to any resources than anyone else. Giving "locals" preferential rights is completely unfair, as this would be excercising some kind of birth right.
I myself getting priced out of vintage german sportscars myself, could we please cut the rights for non-germans to buy up those cars so I can afford one again? You can see how ridicioulous that would sound.
I think there's multiple things coming together. I'm in no way arguing to forbid immigration, I'm just pointing out that I don't think Digital Nomads are a net positive and that there are real economic consequences beyond "they spend money so it's good".
I also specifically said I don't have a problem with anyone coming. You're welcome. I expect people that come to to a country to pay income tax there (as is usually required by law), but I'm in no way arguing to "cut off demand".
Arguing that someone who would want to close borders and stop immigration (both of which policies I don't support at all, btw) is socialist is a bit far fetched. As I said, I welcome immigrants. Immigration brings with it a whole class of problems that need be addressed, but that doesn't mean it should be forbidden.
And lastly, there's also a big difference between housing a vintage cars. One is an essential need, the other is not. You getting priced out of vintage cars, a luxury item, is not nearly as bad as you getting priced out of housing. That is a real problem that is actually happening in a lot of places, not some weird fantasy.
> while driving up the price of property.
So punish the people wanting to travel instead of the greed that leads to this?
Punish? No. Compensate for their unfunded externalities.