Property Taxes in Montenegro

20.01.2025

Property Taxes in Montenegro - With the news last week from Spain that the government is considering a significant increase on the property purchase tax that will need to be paid by Non-EU citizens and Non-Residents (i.e. those who are buying for holiday-home purposes), many people have started to look at alternatives which can offer a better or similar lifestyle, without the worry of a possible hefty tax liability. Montenegro, already highly popular due to it's stunning landscapes, relaxed lifestyle, and favorable tax regime is now the hotspot in which to invest and buy a new home abroad.

The Basics of Buying Property in Montenegro - Foreigners can purchase property in Montenegro with minimal restrictions, making it an attractive option for investors, expats, and holiday homeowners. Buyers typically need a valid passport, a local bank account, and a Tax Identification Number (TIN) to proceed. Working with a reputable real estate agent like CMM Montenegro and getting yourself a legal expert is highly recommended to navigate the process efficiently.

Property Taxes in Montenegro - When purchasing property in Montenegro, buyers are subject to the Property Transfer Tax or VAT (Value Added Tax), depending on the type of property.

• The property transfer tax in Montenegro is applicable only to re-sale properties, and is charged at a flat rate of just 3% of the property market's value. 
• VAT is applied to new builds sold directly by developers, and this rate is typically just 21% of the purchase price, though rates may be reduced where the property will be used for residential purposes

Ongoing Property Taxes in Montenegro - Montenegro imposes an annual property tax, which is relatively low compared to other European countries. This tax varies based on the property’s location, type, and market value, typically ranging from 0.1% to 1% of the property’s assessed value. Coastal areas or premium properties may attract higher rates. To stay compliant, property owners should register with the local tax office and ensure timely payments to avoid penalties.

Income Tax for Non-Residents -  If you plan to rent out your property, income tax applies to the rental income. Non-residents are taxed at a flat rate of 9% on rental income after deducting allowable expenses, such as maintenance and management costs. Non-residents should also register for tax purposes and report rental income to Montenegro’s tax authorities annually. 

Additional Costs to Consider - When purchasing property in Montenegro, several additional costs may arise beyond taxes:

• Legal Fees: Typically 1% of the property value.
• Notary Fees: Approximately 0.1% to 0.5% of the transaction value.
• Bank Charges: If financing the purchase, banks may charge 1% to 2% of the loan amount for processing fees.
• Surveyor Fees: Recommended for verifying the property’s condition, costing around €300-€500

Selling Property in Montenegro - When selling property in Montenegro, sellers are subject to approx. 15% capital gains tax, making the country particularly attractive for investors seeking long-term gains. You may also incur real estate agent fees (3%-5%) and legal fees during the sales proces.

Appealing in Many Ways - Montenegro’s straightforward and relatively low-tax regime is a significant draw for property buyers and investors. With a clear understanding of property taxes in Montenegro, ongoing obligations, and additional costs, you can make an informed decision and enjoy the benefits of owning property in this picturesque Balkan gem.

Whether you’re looking for a holiday retreat, a rental investment, or a permanent residence, Montenegro offers opportunities for every type of buyer. By planning your finances and consulting with professionals, your property journey in Montenegro can be both smooth and rewarding.

CMM Group covers a wide range of areas in Montenegro including Tivat, Kotor, Budva, Bar and Petrovac. We are well placed to help you discover this unique part of the world, and we are ready to assist you in the purchase of your dream home any way we can, if you decide to invest here. If you'd like further information on Property Taxes in Montenegro, or you'd like to discuss options, please do contact us, and let's have a chat.

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Reviews

• Just a brief thanks to CMM! I was buying a plot for house construction. They found the best possible options for my inquiry, replied all my questions and made full accomodation till the deal close. Responsible managers, quality service. So greatful to the Company for the job done!

  Noah, 15.03.2019 12:13:00

• Dear CMM team, just to leave a small feedback on the superjob you've done ! It was not an easy period for us with a child. As we had to sell our home property and decided alternatively buy some nice house at Montenegrin coast. We were truly frightened at the start. My colleague, being your customer, gave a good recommendation, so, we called the office. All the part, covering seach and purchase in Montenegro, was quickly, safe and perfectly done. Good luck and further success and propsperity to the company! Special thanks to Alexander and Snezana for professional approach!

  Mariana , 06.03.2019 12:06:00

• Always thought that buying property abroad isnervous and difficult task. CMM changed my mindset. I felt support and care in every step: from the first call arranged till receiving the Owner's list. I am also happy about how they make my apartment management. Now, whenever me or my family members come home to Montenegro, I am absolutely confident that my apartment is in the best condition!

  Harry, 26.02.2019 12:11:00

• Good day! The first time we met professionally organised step by step work with property in the Southern country. It was a nice surprise for me and my spouse. Well-established algorithms helped us to understand country, its particular features, pluses and drawbacks. Professional manager (Petar Kuzmich) helped us to avoid mistaken choice and provided a really wide number of options to choose from. We felt and still do absolutely safe while buying a house. Happy to come across with your company! Will recommend to our neighboors and family friends in first Norway home.

  Alice and Andrew, 05.02.2019 12:04:00

• As people from the North, we would express our gratitude to CMM team for advice and professionalism! Never met this before dealing with real estate. Perfect job, super-trained experts! Thanks Google we reached you. Now holidays only with CMM! My daughter is in love with Montenegro. Now started to persuade me to buy some flat on the coast. We know to whom to turn for professioanl help now!

  Oliver, 23.01.2019 12:08:00

• CMM is supergood in diplomatic dealing with all sides. I found the apartment I wanted in Montenegro, though the previous owner was behaving awfully and didn't want to bargain. Your managers somehow managed to agree the acceptable price so that we could start with deal. Professional advice on every step helped me avoid numerous mistakes possible. You have all that a naughty customer needs! Also thanks for the wonderful natures shown and nice coffeeshops/dineries =) Now recommending CMM Group to those planning to move or long vacations in Montenegro. Great management and attitude!

  Thomas, 12.12.2018 12:06:00