Situated on the Balkan Peninsula in Southeastern Europe, Montenegro is known for its magnificent and unparalleled natural beauty. Emerging as a sovereign state in 2006, Montenegro is a member of NATO, uses the euro as its currency, and is an official candidate country for EU membership.
Everything you need to know about acquiring premium real estate in Montenegro.
Over the past 15 years, local real estate practitioners have enjoyed watching Montenegro emerge as a key second home and property-investor market in the Mediterranean. The Montenegrin real estate market is still an emerging market with a great deal of potential for capital growth, and it has a number of favourable benefits. Montenegro has low real estate tax rates, and a successful citizenship by investment program centered around new hotel developments, which are all helpful in the development and advancement of the real estate market in the country.
Acquisition of real estate in Montenegro, operationally, is executed before a notary public in the form of a Sale and Purchase Agreement, following an established model. In addition to the Sales and Purchase Agreement, there is a low level of paperwork required that is also completed with the assistance of the notary.
There are no legal restrictions on foreigners buying property in Montenegro.
Immovable property in Montenegro can be acquired locally or remotely (that is, it is not essential to be in the country at the time of acquisition). Property can be purchased via a certified Power of Attorney, wherein a representative may complete the entire purchase procedure on the applicant’s behalf.
The buyer is not obliged to open a bank account in order to purchase property in the country.
The net yield average is 3,5% in Montenegro for property investments.
Rental income tax is fixed at 15%.
Anyone purchasing a property in Montenegro is subject to notary fees which are around 0.01% of the real estate value. Additionally, translation fees apply if the applicant personally purchases the property in Montenegro, since Montenegrin is the official language that notaries are required to use. The fee for this is about EUR 50 per hour of translation. Alternatively, certification fees of the Power of Attorney apply. Should the owner decide to sell the property to market, a 3% tax applies, payable by the buyer, in this case, the owner must pay a profit tax of 9-15% depending on the amount of the profit.
The real estate tax rate is proportional, and it ranges from 0.25% to 1%, depending on the property’s location, market value, the municipality where it is located, the quality of the facility, and similar conditions. It is payable annually.
Henley & Partners assists international clients in obtaining residence and citizenship under the respective programs. Contact us to arrange an initial private consultation.
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