Montenegro Real Estate Taxation: Transfer Tax, VAT, Property Tax and Rental Income
Short answer: a buyer of a resale property in Montenegro pays a progressive real estate transfer tax of 3% to 6% of market value; a buyer of a new build from a VAT-registered developer pays 21% VAT instead. Owners then pay an annual property tax of 0.25% to 1% of market value, and individuals pay 15% on rental income and on capital gains.
Real estate transfer tax (resale)
Since 1 January 2024 the transfer tax is progressive. It is paid by the buyer and calculated on the market value of the property:
| Tax base (market value) | Tax |
|---|---|
| Up to €150,000 | 3% of the tax base |
| €150,000.01 – €500,000 | €4,500 + 5% of the amount over €150,000 |
| Over €500,000 | €22,000 + 6% of the amount over €500,000 |
Worked examples
| Market value | Transfer tax | Effective rate |
|---|---|---|
| €150,000 | €4,500 | 3.0% |
| €300,000 | €4,500 + 5% × €150,000 = €12,000 | 4.0% |
| €600,000 | €22,000 + 6% × €100,000 = €28,000 | 4.7% |
| €1,000,000 | €22,000 + 6% × €500,000 = €52,000 | 5.2% |
VAT on new builds
The first sale of a newly built property by a VAT-registered developer is subject to VAT at the standard rate of 21% instead of transfer tax. Land is treated separately from the building. Check whether the developer's price includes VAT before signing.
Annual property tax
Owners pay an annual property tax at a rate between 0.25% and 1% of the market value of the property as of 1 January. The rate is set by the municipality where the property is located, and the tax authority issues a decision with the amount, payable in two instalments.
Rental income and capital gains (individuals)
| Income | Rate | Tax base / exemptions |
|---|---|---|
| Rental income | 15% | Income minus documented costs, or standard costs of 30% (50–70% for tourist rentals) if costs are not documented |
| Capital gain on sale | 15% | Sale price minus purchase price. Exempt: the owner's only and main residence; transfers between spouses; gifts to first-degree relatives |
Owning through a company
A company registered in Montenegro pays corporate income tax on its profit, including rental profit and gains on sale:
| Annual profit | Corporate income tax |
|---|---|
| Up to €100,000 | 9% |
| €100,000.01 – €1,500,000 | €9,000 + 12% of profit over €100,000 |
| Over €1,500,000 | €177,000 + 15% of profit over €1,500,000 |
Individual ownership is simpler for a home or holiday property. A company can suit a larger rental portfolio or restricted land categories, but adds accounting, compliance and a second level of tax on distributed profit — compare both with a tax adviser before buying.
Figures as of 19 September 2026. This guide is general information, not tax advice; rates and rules change, so confirm your position with a Montenegrin tax adviser.
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Prepared by the Montenegro Sotheby's International Realty office in Porto Montenegro. Facts checked against the sources below on September 19, 2026. This guide is general information, not legal or tax advice.
Sources
- PwC Worldwide Tax Summaries — Montenegro: Corporate, other taxes
- PwC Worldwide Tax Summaries — Montenegro: Corporate income tax
- PwC Worldwide Tax Summaries — Montenegro: Individual income determination
- KPMG Montenegro — Changes to tax regulations
- Government of Montenegro — Law on Real Estate Transfer Tax (2024)
