The acquisition and ownership of real estate in Montenegro is regulated by the Law on Proprietary and Ownership Rights of Montenegro which regulates proprietary rights since 2009. This law prescribes as general principle that foreigners may acquire real estate in Montenegro in the same way as Montenegrin citizens. However, the Law also prescribes the following exemptions in respect to acquiring real estate ownership rights by foreigners: natural resources, goods in general use, agricultural land, forest and forest land, a cultural monument of great and special importance, immovable property in a land-border area to a depth of one kilometer and islands, real estate which is located in an area which is to protect the interests and security of the country, legally declared an area in which a foreign person cannot have a property right.
Note: Exceptionally, a foreigners may acquire the right of ownership of agricultural land, forests and forest land with area of 5.000 m2 only if the contract on alienation (purchase and sale, gift, exchange, etc.), residential building located on that land.
Foreign nationals buy property in Montenegro directly from owners or using the services of real estate agents. There is a large No of real estate agents in Montenegro including local and foreign agencies. The agencies predominantly work as sellers agents with some exceptions and they charge commissions mainly from sellers. The commissions vary but a wide spread commission rate is 5% of the achieved price.
Foreign nationals buy property in Montenegro directly from owners or using the services of real estate agents. There is a large No of real estate agents in Montenegro including local and foreign agencies. The agencies predominantly work as sellers agents with some exceptions and they charge commissions mainly from sellers. The commissions vary but a wide spread commission rate is 5% of the achieved price.
Once that a buyer chooses and decides to buy a property the first step is the reservation deposit. The amount of the reservation deposit is usually nonrefundable and can vary between 1,000€ and go up to 10% of the value of the property depending on sellers requirements and the agreement between the buyer and the seller. The reservation deposit is usually accompanied by a reservation agreement.
All real estate transaction contracts are signed and verified in the offices of public notaries of Montenegro. The buyer can use a lawyers services for the drafting of the contract which can later be signed and verified at the notaries office or can have the notary draft the contract. The buyer can participate in the sales process or can authorize a lawyer or other legal representative which can sign the contract base on a notarized bilingual POA (power of attorney) or an official translation of a foreign notarized POA. The purchase process costs are paid by the buyer. The notary costs depend on the value of the property and are 250-350€ for properties of the value of 40,000-120,000€ and for the property valued above €120,000 for each increase of property price of €15,000 the fee is increased by €10. The maximum Notary fee is €5,000.
ADDITIONAL COSTS ARE:
Contract translation fees(depending on the language 10-20€ per page)
The legal fees (if a lawyer is appointed and they can vary depending on the services)
3% property transfer of ownership tax(3% of the purchase price paid if buying a resale property(not paid when buying a newly built property from the developer)
Cadastral fees(10-15€)
Once that the entire purchase price is paid the property ownership is transferred to the buyer.
Owners of properties in Montenegro are subject to property ownership taxes. These taxes are determined by the municipality the property is located in, determined and paid annually. The property ownership taxes vary between 0,25-1% of the property value depending on the type and location of the property. The property ownership taxed for the current year is paid by the owner of the property on the 1st of January of that year (meaning if a buyer buys a property on the 2nd of January 2020 he will be obliged to pay his first property ownership tax in 2021 provided that he is still the owner of the property on 1st of January 2021).
Property owners are also obliged to pay property maintenance fees if the property is located in a mixed ownership residential building (e.g.. condominium, mixed use building, apartment complex etc.). The minimum maintenance fee is regulated by law and is 0,20€ per meter square per month but it generally depends from the initial agreement with the developer or building council(e.g. some developments charge up to 5€ per square meter per month or more).