Home Property in Montenegro
How to buy a house in Montenegro?
Here you will find the detailed information about real estate purchasing in Montenegro:
- the right way to choose the property and to effect the deal;
- property taxes and duties that should be paid;
- everything about home loans in Montenegro;
- home property management and renting;
- rental, commercial properties and related investment properties.
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From the time Montenegro gained independence and up to this day the country has positioned itself as a luxury resort for the EU-nationals. This also shapes local real estate market – there are lots of hotels, rental property, and gorgeous country houses.
By any stretch of imagination Montenegrin real estate cannot be called one of the cheapest in Europe. However, a rational investor has a chance to purchase property at a decent price. The average price for newly built apartments in Montenegro, as of 2013 third quarter, amounted to €1259 per sq. m. That said, housing in Podgorica, the capital of Montenegro, is far from being the most expensive throughout the country.
Apartments here range from €850 to €2000 per sq. m. with the average price of €1200.
Affordable property in Montenegro is easier to find in the northern parts of the country. A 30–32 sq. m. apartment in the region of Bar can be purchased for nearly €30 000. A 80 sq. m. country house with a land parcel of 200 sq. m. in Sutomore is worth about €33 000. A 56 sq. m. cottage with a land parcel costs about €35 000. A house with an area of 50 sq. m. in the city of Bar goes for €37 000. Real estate in Nikšić is among the cheapest in the whole country – the average price for a square meter here is €588.
Expensive and premium property in Montenegro is concentrated on the coastline of the Adriatic Sea in such resorts as Budva Riviera, Petrovac, Sveti Stefan, Dobrota and Ljuta. Montenegro tries to position itself as a luxury resort for residents of European countries, so the premium segment of real estate market here is quite well-developed.
Coastal regions in Montenegro are the most popular among foreign buyers. Real estate prices in such places usually stay within €2000-3000 per sq. m., but there are also some apartments worth €5000-7000 per sq. m.
A 200 sq. m. apartment right next to the sea can be purchased for €600 000. A luxurious apartment with an area of 190 sq. m. located in the center of Budva costs around €1 200 000. A 220 sq. m. villa on the outskirts of Bar goes for €1 000 000. While a 500 sq. m. villa in Budva is worth €3 000 000.
Investors should keep in mind that commercial real estate market in Montenegro is strongly influenced by local tourism industry. This is particularly discernible in a vast number of hotels and commercial apartment buildings. For example, a 331 sq. m. hotel can be purchased for some €200 000. A 200 sq. m. apartment building is worth €300 000. If you are interested in premium property, prices for some hotels may go up to several million Euros. For instance, a hotel with an area 2000 sq. m. in Budva costs around €5 500 000.
Let’s divide the purchase process into principal stages and figure out, how it works in Montenegro.
Real estate acquisition in Montenegro starts with property selection. After that, a preliminary agreement, called “Predugovor” in Montenegrin, is signed. This document includes terms of payment and other provisions related to the deal. The amount of required deposit is 10 % of property value. The deposit, which guarantees that buyer is serious about purchasing the object, is required for property reservation and removal from the market. If seller decides to cancel the deal, the deposit is returned to buyer, according to preliminary agreement, but no more than twice the amount. If transaction is cancelled due to the buyer’s fault, he or she loses the deposit. It is advisable to request a deposit receipt from the seller.
After preliminary agreement has been signed, it is necessary to register real property purchase in Montenegro. For this purpose, principal sale and purchase agreement, called “Glavni Ugovor” in Montenegrin, is executed.
According to changes in the law “On Foreign Investments”, all contracts are to be signed at the state notarial offices in the presence of an authorized notary and an interpreter, having the whole set of documents required for transaction.
The principal agreement contains the following information:
- property description;
- property value;
- payment schedule;
- amount of payments;
- seller’s consent to ownership title transfer in the buyer’s name;
- warranties of clean title to purchased property;
- seller’s liability to protect the buyer from third party claims to purchased property.
Principal agreement is signed by both parties and officially sealed by Montenegrin judicial authorities. Upon ownership title transfer, the buyer has to pay a property turnover tax, which is 3 % of transaction amount, specified in the agreement.
The next step involves property registration in Montenegro. A special request is submitted, in order to change the owner’s name in the cadastral register. This procedure takes up to 30 days, following which the buyer obtains all documents related to purchased property and becomes its rightful owner.
When planning real estate acquisition in Montenegro, one has to consider the following taxes:
- according to Montenegrin law, new owner has to pay a property turnover tax, which is 3 % of the object value. Within a month after sale and purchase agreement has been signed, buyer receives a tax payment reminder from Uprava Prihoda. This payment must be made within 15 days. Property, which is purchased on the primary market, is not liable to this tax – instead, it requires a 17 % VAT, which is already included in property value;
- lawyer’s fee for sale and purchase agreement execution – €100–500;
- registration fee – 0.5 % of the cadastral value (approximately €170–350).
Real estate tax in Montenegro is the same for both foreigners and residents of the country. archived version