Frequently Asked Questions

Frequently Asked Questions About Buying Real Estate in Montenegro

This FAQ provides potential buyers with essential information about purchasing property in Montenegro, addressing common concerns and ensuring clarity on the latest legal and financial regulations.

1. What is the process for buying property in Montenegro?

To purchase property in Montenegro, you typically follow these steps:

  1. Find a Property: Work with a reputable real estate agent to find properties that meet your criteria.
  2. Legal Checks: Hire a lawyer to conduct due diligence, ensuring clear title and no legal issues ( in our agency we are providing this service for free for our clients. Also, it can be arranged at notary ).
  3. Preliminary Agreement: Sign a preliminary contract and pay a deposit, usually 10% of the property price ( optional ).
  4. Final Contract: Sign the final sales contract in the presence of a notary.
  5. Register Ownership: The property needs to be registered at the local Land Registry (it’s usually done at notary office, buyer pays a tax to notary office and they sends documents for registration on the name of new owner).

2. Are there any restrictions on foreign buyers purchasing property?

No, there are no restrictions on foreign buyers purchasing property in Montenegro. Both individuals and companies can buy property. However, foreigners cannot directly buy (agricultural) land; they need to do so through a company registered in Montenegro.

3. What taxes are applicable when buying property in Montenegro?

The real estate transfer tax varies based on the property value:

  • Up to €150,000: 3% of the property value.
  • Between €150,000 and €500,000: €4,500 plus 5% of the amount exceeding €150,000.
  • Over €500,000: €22,000 plus 6% of the amount exceeding €500,000.

4. What are the annual property taxes?

Annual property taxes are based on the property’s market value and range from 0.25% to 1.0%. For luxury properties, especially hotels in coastal areas, the rate can be as high as 5% [❞].

5. Can foreigners obtain mortgages in Montenegro?

Foreigners can obtain mortgages in Montenegro, primarily through larger banks with Montenegrin branches. Typically, these loans are available only if the foreigner works in Montenegro. Loan terms can vary, but often include:

  • Maximum loan term of 25 years.
  • Loan amounts up to 50% of the property’s value or €300,000, whichever is lower.
  • Mandatory private mortgage insurance.

6. Are there any capital gains taxes?

Yes, capital gains from the sale of real estate are taxed at a rate of 9%. This tax is calculated based on the difference between the sale price and the purchase price of the property [❞].

7. How is property ownership registered?

Property ownership is registered at the local Land Registry Office. This process is typically handled by notary office (optional lawyer or real estate agency) and involves submitting the signed sales contract along with proof of payment of the real estate transfer tax.

8. What are the costs associated with buying property?

In addition to the purchase price, buyers should budget for the following costs:

  • Legal Fees: Typically around 1-2% of the property price.
  • Notary Fees: Around 0.01-0.05% of the property price.
  • Agent Fees: Usually 5% of the property price ( in our agency is paid by seller ).
  • Property Survey: Optional but recommended to confirm property boundaries and condition.

9. What are the residency requirements for property owners?

Owning property in Montenegro does not automatically grant residency. However, property owners can apply for temporary residency, which is often granted for a year and renewable. Permanent residency and citizenship are possible through the Montenegrin Citizenship-by-Investment Program, which requires a significant investment in real estate or other approved sectors.

10. What should I consider when choosing a property in Montenegro?

Frequently Asked Questions, Consider the following:

  • Location: Coastal areas like Budva, Tivat and Kotor are popular for their scenic beauty and tourism potential.
  • Purpose: Whether the property is for personal use, rental, or investment.
  • Condition: Older properties may require renovations, while new constructions offer modern amenities.
  • Legal Clearances: Ensure the property has a clear title and all necessary permits.

Frequently Asked Questions-Conclusion

Buying property in Montenegro can be a lucrative investment, especially with the country’s favorable tax laws and beautiful landscapes. Ensure you work with reputable professionals, including real estate agents and lawyers, to navigate the buying process smoothly.

For more detailed information or personalized assistance, feel free to contact us at Montenegro Real Estate.

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