Buying Property in Montenegro: Taxes, Costs, ROI, Property Maintenance, Residence Permit, Citizenship

• Property purchase tax – is 3% of the market value of the property if the property is purchased on the secondary market. There is no tax for new buildings, but the buyer pays VAT (usually 21%) if the seller is a legal entity.
• Annual property tax – varies from 0.1% to 1% of the cadastral value of the property depending on its type and location.
• Property rental tax – 9% of rental income if the owner is an individual, and 9% – 15% for legal entities depending on the tax system.
• Capital gains tax – 9% of the difference between the purchase and sale price if the property is sold earlier than three years after purchase.

Additional expenses when buying

In addition to taxes, the buyer should consider:

• Realtor services – 3-5% of the property value.
• Notary fees – about 0.01-0.05% of the transaction amount.
• Registration of ownership – a fixed state fee of 100-300 euros.
• Translator services (if necessary) – from 100 euros.
• Opening a bank account – up to 50 euros.

The return on investment in real estate in Montenegro depends on several factors: location, type of property and its use. Average returns are:

• Short-term rental (tourist) – 5-10% per annum. The high season lasts from May to October, which allows for significant rental income.
• Long-term rental – 4-6% per annum, especially in large cities such as Podgorica and Budva.
• Capitalization of value – real estate prices grow by an average of 3-7% per year, especially in coastal areas.

Property Maintenance

• After purchasing, you need to consider the maintenance costs:
• Utilities (electricity, water, internet) – 50-150 euros per month depending on the season.
• Maintenance of common areas (if the property is in a residential complex) – 0.5-1 euro per m².
• Property insurance – 100-500 euros per year depending on coverage.
• Property tax – from 0.1% to 1% of the property value.

The Montenegrin citizenship by investment program was closed on December 31, 2022.

It is currently not possible to obtain Montenegrin citizenship by purchasing real estate.

Buying real estate in Montenegro does not automatically entitle you to a residence permit, but it does make it easier to obtain.

There is no minimum cost for housing. That is, you can buy real estate of any value and apply for a residence permit.

The residence permit applies to the owner's family members.

Buying real estate in Montenegro is a promising investment with the possibility of receiving a stable income. However, it is important for investors to consider all taxes, expenses and requirements for obtaining a residence permit.

A competent approach to choosing real estate and managing assets will help to maximize the return on investment and the comfort of living.

Have you decided to buy real estate in Montenegro as a profitable investment, personal residence or obtaining citizenship? Contact us!

Mercury Group specialists offer individual solutions for each client:

• we will monitor the market and select real estate in Montenegro that meets your criteria;
• we will accompany you at all stages of the turnkey transaction;
• we will prepare the necessary package of documents for obtaining citizenship in Montenegro.