Purchase Costs Summary
When buying property in Montenegro, budget for these costs in addition to the purchase price:
| Cost | Rate | Notes |
|---|---|---|
| Transfer Tax | 3% | Paid by buyer within 30 days |
| Notary Fees | ~0.1% | Min €50, max €2,000 |
| Lawyer Fees | 1–2% | Recommend budgeting 1.5% |
| Agent Commission | 2–4% | Often negotiable; sometimes seller pays |
| Registration Fee | €50–150 | At UPN (Real Estate Administration) |
Total additional cost: typically 5–7% of purchase price
Transfer Tax Details
The 3% Transfer Tax is calculated on whichever is higher: the agreed purchase price OR the cadastral value as assessed by the tax authority. If the tax office believes the declared price is below market value, they may revalue and increase the tax.
New builds from developers: Subject to 21% VAT instead of 3% transfer tax. Usually included in the advertised price.
Annual Property Tax
Montenegro levies an annual property tax of 0.1%–1.0% of the assessed value, depending on:
- Type of property (residential vs commercial)
- Location
- Municipal rates
For a typical €200,000 coastal apartment, expect €200–500/year in annual tax.
Tax on Rental Income
Rental income is taxable at 9% flat rate in Montenegro. This is one of the lowest rates in Europe and a key attraction for investors.
Capital Gains Tax
If you sell within 2 years, capital gains are taxed. After 2 years of ownership, no capital gains tax applies. This is a significant benefit for buy-and-hold investors.
VAT Reclaim for New Builds
If you register a company in Montenegro and use the property for business (e.g., short-term rentals), you may be able to reclaim the 21% VAT. Consult a Montenegrin tax advisor for your specific situation.