Trough this final paper we are going to show the creation and execution of tax liabilities based on real estate transfer tax, which is one of primary task of Tax Administration, which is regulated by several different legal regulations trough the tax system of Republic of Croatia. Real estate transfer tax in Croatia is regulated by Real Estate Transfer Tax Act, Value Added Tax Act and Income Tax Act, where the latter regulates taxation of income on the basis of alienation of real estate. Taxation of certain legal activities in real estate transfer is regulated by Legal Position of Religious Communities Act, Social Incentive Housing Act and Areas of Special State Concern Act. The Real Estate Transfer Act determines the taxation subject, the tax payer, tax liability incurrence, and tax rate as well as tax exemptions. Real estate transfer tax can secure relatively generous tax revenue because the tax basis is so large. The tax revenue is the market value of the real estate at the moment when the tax liability is incurred. The tax payer is the person acquiring the real estate. The positive stabilization effect of real estate transfer tax is achieved by the effect of its action of real estate market value. Enlargement or lowering in the tax rate can alleviate oscillations in real estate market value, by overcoming excessive value growth over the period of economic growth. It was just the reduction of the tax rate from 5% to 4% that led to awakening of the real estate market, and the drop of prices at certain locations. For the tax payers, the location of real estate it is still very important, as well as how old that real estate is.