With unrivaled natural wonders and plenty of sunshine, history and serenity, Montenegro has emerged as one the most attractive destinations attracting visitors from all over the world. With its favorable economic climate, the country has attracted many foreign investors.
Buying an apartment in Montenegro is an easy and straightforward process. Individuals can buy properties under their own name, domestic or foreign company.
Foreign citizens can apply for 2 types of residency permit taking into account they meet the necessary requirements.
Temporary residence permit gives foreign citizens opportunity to stay in Montenegro for maximum 365 days which includes full time employment, school / university attendance, family reunion, and property ownership.
Permanent residence permit can be obtained after 5 years of temporary residency and can be renewed for subsequent 5 years. Permanent residence permit gives the foreign nationals the same rights of Montenegrin citizen except the right to vote.
With the recent introduction of notaries, the whole purchase process is safe and transparent for both parties. Outlined below are some of the most important steps and facts:
Once both parties have agreed on the purchase price of the property , it is recommended to hire a lawyer who can check that the property fulfills all the necessary elements especially the title of deed and that there is no mortgage on the property.
Depending on the agreement between the parties, deposit is paid prior to scheduling the notary. Deposit amount depends on the value of the property and it is communicated and handled by the selling agent.
When all the details regarding the sale of the property are agreed on, the selling agent will schedule the notary.
At the notary, both the buyer and the seller need to be present in person. In cases when either of the parties is not in Montenegro, agreement can be signed on their behalf by their representative holding the Power of Attorney for such purpose.
When the agreement is signed between the parties who are not Montenegrin nationals, presence of the court translator is mandatory.
Once the Sales and Purchase Agreement is signed and the purchase price paid in full ( deadline for the payment is agreed between the parties and noted in the agreement ), the notary will send all the paperwork to cadaster in order for title of deed to be changed which takes up to a few weeks.
The buyer will be required to pay 3% purchase tax or title transfer tax.
Once the deed transfer is confirmed, the new owner can change all the communal bills to his own name.
Financial incentives and taxation
CORPORATE TAXATION
The basis for domestic companies is considered to be worldwide income, while non-resident companies are taxed only on Montenegro sourced income.
Corporate profit tax rate is progressive:
9% – profit up to 100,000 eur
12% – on profit above 100,000 eur and up to 1,500,000 eur
15% + 177,000 eur on profit above 1,500,001 eur
PERSONAL TAX
Personal income tax ranges between 9% and 15%. A 0% tax is levied on the inherited real estate among close family members.
Income tax rate is also progressive:
Personal income tax
0% on the amount up to 700 eur
9% on the amount from 701 eur to 1,000 eur
15% on the amount over 1,001 eur
15% on capital gain
VALUE ADDED TAX ( VAT )
The VAT rate is 21% with implementation of 7% on certain products and service categories including the sector of tourism.
PROPERTY TAX
Property tax is paid annually to the state and municipal authorities called the Annual Property Tax ranging from 0.1% to 1% depending on location of the property, size etc.
PROPERTY TRANSFER TAX
As from January 1st 2024, new property taxation will apply as follows:
3% on properties worth up to 150,000 eur
5%- + 4,500 eur on properties worth between 150,001 eur and 500,000 eur
6% + 22,000 eur on properties worth over 150,001 eur
