Montenegrin Property purchase process
The procedure of buying real estate in Montenegro is very simple. Foreign property buyers are able to obtain a one-year residency permit based on the ownership of a property in Montenegro, regardless of its value. The permit can only be obtained by owners of houses, apartments, commercial units, hotels, restaurants and holiday homes but it does not apply to owners of a plot of land.
After spending five years as a temporary resident, you can apply for permanent residency in Montenegro and it can be renewed for additional five-year terms. This is one step closer to obtaining citizenship, and this is important to mention because of the forecast that Montenegro will become a member of the EU by 2025.
Foreigners have the same rights as a Montenegrin citizen to purchase property. You can buy investment properties, holiday homes, or commercial premises as well as a primary residence.
So, when you decide what kind of property you want to buy, the process goes smoothly. Once both parties approve the terms, the buyer and seller need to sign a purchase contract in front of a notary. The presence of a certified court interpreter is necessary.
Upon signing the contract and paying the purchase price, the new ownership details must be registered with the Cadastre and State Property Administration. The property ownership will be changed and cadastral certificate will be issued.
The buyer costs include:
- Notary fees, the amount depends the sale price or appraised value of the real estate that you buy or sell;
- Translation fee charged by a court certified translator. The average price per page is approximately € 20;
- Real Estate Transfer Tax (state’s tax on any change in ownership of real estate) with the average cost of € 15.00.
Regarding the real estate purchase tax, it is important to note that if you are buying real estate directly from an investor who pays VAT, no tax is required. If the seller is an individual, you need to pay a tax of 3%.
Also, you have an obligation to pay the annual property tax, and the amount and procedure of tax payment are determined by the local government of the municipality to which the real estate belongs, and its amount depends on the location, class, distance from the sea, etc.
Since Montenegro has become one of the leading tourist destinations with a growing number of visitors each year, renting out your home can be a great way to provide lucrative income – and serve as an investment down the road.
VitaNova Group we’ll help you find a desirable property and walk you through the whole process towards homeownership.