Property Costs
& Taxes in Montenegro
Everything you need to know
A comprehensive, fact-based guide to all costs and taxes when buying, owning, and selling property in Montenegro. Updated for 2025 with the latest progressive tax rates.
Montenegro Property Costs 2025
Understanding the Full Cost of Property Ownership
Montenegro offers a relatively straightforward and competitive tax environment for property buyers compared to many European countries. This guide covers every cost and tax you'll encounter when buying, owning, renting, and selling property—with interactive calculators and current rates as of January 2025.
Key Takeaways for Buyers
What You Need to Know
Montenegro's property tax system was updated in January 2024 with progressive transfer tax rates. Understanding the difference between buying new-builds (21% VAT included) versus resale properties (3-6% transfer tax) is crucial for budgeting accurately.
Competitive Advantages
No inheritance tax on property
No wealth tax on real estate assets
Generous rental income deductions (30-70%)
Primary residence capital gains exemption
Low annual property tax (0.25-1%)
Agent commissions paid by sellers, not buyers
Important Considerations
Progressive transfer tax since January 2024
15-day payment deadline for transfer tax
21% VAT on new-build purchases
Annual tax varies by municipality
Non-resident rental income reporting required
Data Sources & Last Updated
All information is sourced from official Montenegro government publications, the Tax Administration of Montenegro, and verified legal resources. Tax rates and thresholds are current as of January 2025.
In This Guide
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Real Estate Transfer Tax (RETT)
Property Transfer Tax: Progressive Rates Since 2024
As of January 1, 2024, Montenegro introduced progressive transfer tax rates replacing the previous flat 3% rate. This tax applies to resale properties only—new builds purchased directly from developers are subject to 21% VAT instead.
First Tier
Up to €150,000
€100,000 property = €3,000 tax
Second Tier
€150,001 to €500,000
€250,000 property = €9,500 tax
Third Tier
Above €500,000
€750,000 property = €37,000 tax
Transfer Tax Calculator
Calculate your exact transfer tax based on property value and type
Calculated Tax
Calculation: €4,500 + (50,000 x 5%)
Tax Brackets (Jan 2024)
Progressive Tax Explained
Transfer tax is calculated progressively—meaning only the portion of the property value within each bracket is taxed at that rate, not the entire value. This results in lower effective rates for higher-value properties than a simple percentage would suggest.
Payment Deadline: 15 Days
Transfer tax must be paid within 15 days of signing the purchase contract. After this deadline, Montenegro charges 0.03% interest for each day of delay. Ensure funds are available and payment is arranged promptly to avoid penalties.
Value Added Tax (VAT)
VAT on New-Build Properties: 21%
When purchasing a new property directly from a developer (first sale), you pay 21% VAT instead of transfer tax. This is Montenegro's standard VAT rate and applies uniformly to all new residential and commercial property sales.
21% VAT on First Sale
The VAT is typically included in the developer's advertised price, but always confirm this before signing. If the price is VAT-exclusive, add 21% to your budget. VAT applies only to the first sale—subsequent resales are subject to transfer tax.
VAT Applies When
Buying directly from developer (first sale)
Property has never been occupied
New construction or off-plan purchase
Purchasing from a VAT-registered entity
Transfer Tax Applies When
Buying from a private individual (resale)
Second-hand property sale
Property has been previously occupied
Seller is not VAT-registered
Important: Always confirm with the developer whether their quoted price includes or excludes VAT. Most reputable developers include VAT in their headline prices, but this should be verified in writing before you sign any reservation agreement.
Annual Property Tax
Ongoing Property Tax: 0.25% to 1% Annually
Montenegro charges annual property tax based on the market (cadastral) value of your property. Rates are set by each municipality within a government-defined range, with coastal and tourist areas typically applying higher rates.
Annual Tax Rate
0.25% – 1.00%
Factors Affecting Rate
Municipality location
Proximity to coast or tourist areas
Property type (residential, commercial)
Property age and condition
Assessment Basis
Market value determined by cadastre
Often lower than actual purchase price
Reassessed periodically
Municipalities may adjust by 25-150%
Annual Tax Examples
€200,000
Coastal property (0.75%)
€1,500/year
€350,000
Podgorica (0.50%)
€1,750/year
€150,000
Inland property (0.30%)
€450/year
Rental Income Taxation
Rental Income Tax: 15% with Generous Deductions
Rental income from Montenegro properties is taxed at a flat 15% rate after allowable deductions. The deduction rates are generous, especially for short-term tourism rentals, making the effective tax rate considerably lower than the headline rate.
Long-Term Rentals
Short-Term / Tourism
VAT Registration Threshold
If your annual short-term rental revenue exceeds €30,000, you must register for VAT and charge 21% VAT on rental income. Additionally, you must collect tourist tax ranging from €0.10 to €1.00 per adult guest per night, depending on the municipality.
Tax Filing Requirements
Rental income is reported annually via personal income tax return. For 2024 income, file by end of April 2025. Non-residents are subject to the same 15% rate and should ensure proper reporting to avoid penalties.
Capital Gains Tax
Capital Gains on Property Sales: 15%
When you sell property in Montenegro for a profit, capital gains tax applies to the difference between your purchase price and sale price. Several important exemptions exist, particularly for primary residences.
Individuals
15%
Flat 15% tax on net capital gain (sale price minus purchase price and documented improvement costs)
Legal Entities
9-15%
Taxed under corporate income tax at 9%, 12%, or 15% depending on profit level
Capital Gains Exemptions
Primary residence sales are completely exempt from capital gains tax
Transfers between spouses are exempt
Transfers between parents and children are exempt
Property transfers due to divorce are exempt
Inheritance transfers are exempt
Professional & Administrative Fees
Legal, Notary, and Registration Costs
Beyond taxes, several professional fees apply when purchasing property in Montenegro. These are regulated and relatively predictable, allowing accurate budgeting.
Legal Fees
€1,200 – €2,500+
Includes title verification, contract review, and registration. Complex transactions or higher-value properties may cost more.
Notary Fees
€350 – €5,000
Regulated fees based on property value. €350 base for properties up to €120,000, plus €10 per €15,000 above. Maximum €5,000 plus 21% VAT.
Cadastre Registration
0.5% of cadastral value
Registration with Montenegro's Land Registry. Cadastral value is typically lower than market value, reducing this cost.
Translation Fees
€150 – €300
Licensed interpreters are mandatory for non-residents. Written translation €20/page, oral interpretation €50/hour.
Agent Commissions: In Montenegro, real estate agent commissions (typically 3% + VAT) are paid by the seller, not the buyer. This reduces your purchase costs compared to markets where buyers pay agent fees.
Complete Cost Breakdown
Total Transaction Costs Calculator
Use this calculator to estimate all costs associated with your Montenegro property purchase. For resale properties, budget approximately 4-5% of the purchase price for total transaction costs.
Total Transaction Costs Calculator
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Cost Breakdown
Transfer Tax (RETT)
Progressive rates: 3-6%
€9,500
Notary Fees
Regulated fees + 21% VAT
€504
Registration / Cadastre
0.5% of cadastral value
€1,000
Legal Fees
Title search, contracts, registration
€1,500
Translation
Licensed interpreter services
€200
Total Transaction Costs
(For resale properties. VAT included in new-build prices.)
€12,704
5.08% of property value
This calculator provides estimates based on typical costs. Actual costs may vary based on property specifics, municipality, and service providers. Always obtain detailed quotes from lawyers and notaries before proceeding.
Frequently Asked Questions
Property Costs & Tax Questions Answered
Common questions about costs, taxes, and fees when buying property in Montenegro
Transfer tax (Real Estate Transfer Tax, or RETT) applies to resale properties—those sold by private individuals or properties that have been previously occupied. Rates are progressive: 3% up to €150,000, 5% from €150,001-€500,000, and 6% above €500,000.
VAT (21%) applies only when buying new-build properties directly from developers (first sale). VAT is typically included in the advertised price, but always verify this with the developer before signing.
For resale properties, budget approximately 4-5% of the purchase price for total transaction costs. This includes transfer tax (3-6%), notary fees (€350-500+), registration fees (0.5% of cadastral value), legal fees (€1,200-2,500), and translation costs.
For new-build properties, VAT is typically included in the price. Additional costs are lower—around 1-2% for notary, registration, legal, and translation fees.
Transfer tax must be paid within 15 days of signing the purchase contract. Montenegro charges 0.03% interest per day for late payment. Ensure you have funds available and coordinate with your lawyer to arrange timely payment.
Rental income is taxed at a flat 15% rate after deductions. Long-term rentals receive a standard 30% expense deduction, while short-term tourism rentals benefit from 50-70% deductions if properly registered. This results in effective rates of 4.5-10.5%.
If annual rental revenue exceeds €30,000, you must register for VAT and charge 21% on rental income.
Yes, capital gains are taxed at 15% for individuals. However, important exemptions apply: primary residence sales are completely exempt, as are transfers between spouses, parents/children, divorce settlements, and inheritances.
Annual property tax ranges from 0.25% to 1% of market value, depending on municipality and property type. Coastal and tourist areas typically have higher rates. Budget €500-2,000 per year for a typical €200,000-€300,000 property.
Additionally, factor in building maintenance fees (for apartments), utility costs, and optional property management if you're a non-resident investor.
No, foreign buyers pay the same tax rates as Montenegrin citizens. The tax system does not discriminate based on nationality. However, non-residents must ensure proper tax registration and compliance with reporting requirements for rental income.
No, in Montenegro real estate agent commissions are paid by the seller, not the buyer. This is different from some markets where buyers pay agent fees, and it reduces your total purchase costs.
Have specific questions about property costs in Montenegro? Our team provides factual, buyer-first guidance. Contact us for a personalized cost breakdown based on your target property and investment goals.
Important Legal Disclaimer
The information provided in this guide is for general informational purposes only and does not constitute legal, tax, or financial advice. Tax laws and rates are subject to change, and the information presented reflects our understanding as of January 2025.
While we strive to ensure accuracy, we recommend consulting with qualified legal and tax professionals in Montenegro before making any property purchase decisions. Individual circumstances may affect tax obligations and costs.
Omnia Montenegro is a property marketing platform and is not licensed to provide legal or tax advice. All tax calculations and cost estimates are indicative only and should be verified with appropriate professionals.
Sources & References
Information last verified: January 2025
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