Montenegro's property tax system is competitive by European standards, but it changed in an important way in 2024. This guide sets out exactly what you pay when you buy, while you hold, and when you sell — with current 2026 rates.
When you buy: transfer tax or VAT
Since 1 January 2024, the Real Estate Transfer Tax (RETT) on resale property is progressive, no longer a flat 3%. It is charged in bands of the market value:
- 3% on value up to €150,000
- 5% on the portion from €150,000 to €500,000
- 6% on the portion above €500,000
The taxable base is the market value as assessed by the tax authority — not necessarily your contract price. The return must be filed and paid within 15 days of signing. New-builds bought directly from a developer pay no transfer tax; instead the price includes 21% VAT (the first transfer of ownership).
While you own: annual property tax
Annual property tax is set by each municipality and runs 0.25%–1.0% of assessed market value as of 1 January. The rate depends on the municipality and category — secondary or holiday homes and undeveloped land can attract higher rates, while a primary residence often qualifies for relief. It is usually payable in two instalments based on the authority's assessment.
When you sell: capital gains
If you sell at a gain, capital gains for individuals are taxed at 15%. Relief commonly applies where the property was your place of residence, or on transfers between spouses and between parents and children. Allowable costs — acquisition, documented improvements and fees — reduce the taxable gain.
Total cost of buying
For a standard purchase, budget roughly 4–6% on top of the price for a resale, or 2.5–5% for a new-build where VAT is already included. Beyond tax, expect notary fees, a court translator, an independent lawyer for due diligence, and agency commission.
Why verifying value and status matters
The tax base is market/assessed value — and the property's legal status affects everything downstream. Before you buy, confirm ownership and boundaries in the cadastre: our platform verifies every listing against the Montenegrin cadastre (Geoportal and eKatastar), so you know you are buying clean title before you take on any tax obligations.
Summary
Buying: 3–6% progressive transfer tax (resale) or 21% VAT (new-build). Owning: 0.25–1% per year. Selling: 15% on capital gains, with the usual exemptions. This is general guidance, not tax advice — confirm your specific situation with a qualified adviser.
Frequently Asked Questions
What is the property transfer tax in Montenegro?
Since 2024 it is progressive: 3% up to €150,000, 5% from €150,000 to €500,000, and 6% above €500,000, charged on the assessed market value.
Do I pay VAT on a new-build?
Yes — the first transfer of a new-build from a developer carries 21% VAT, usually included in the price, and no transfer tax applies in that case.
How much is the annual property tax?
It is municipality-set, generally 0.25%–1.0% of assessed value; holiday homes can be higher and a primary residence may get relief.
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