Purchase Costs Summary
When buying property in Montenegro, budget for these costs in addition to the purchase price:
| Cost | Rate | Notes |
|---|---|---|
| Transfer Tax | 3–6% progressive | Paid by buyer within 15 days (resale properties) |
| 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 progressive Transfer Tax is calculated on whichever is higher: the agreed purchase price OR the cadastral value as assessed by the tax authority. Rates: 3% up to €150,000, 5% between €150,000–€500,000, 6% above €500,000. For a €300,000 property this means €4,500 (on first €150k) + €7,500 (on next €150k at 5%) = €12,000 total. 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 progressive 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 taxed at 15% for individuals, with deductible expense allowances.
Capital Gains Tax
Capital gains are taxed at a flat 15% on the gain (sale price minus acquisition cost), regardless of how long you have owned the property. The gain is exempt only for a primary residence or transfers between spouses or parents and children.
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.