TAX WHEN BUYING REAL ESTATE IN MONTENEGRO. HOW TO PAY AND HOW MUCH?

We outlined the procedure for purchasing real estate and the costs of completing the transaction in previous articles. Below I will tell you what the 3% tax is, which is paid after completing the transaction.
In accordance with the Law of Montenegro “On Tax on the Sale of Real Estate” (Zakonom o porezu na promet nepokretnosti (“Službeni list RCG”, br. 69/03), the subject of taxation is the sale of real estate. Any acquisition of ownership of real estate in Montenegro is considered a sale real estate.

The payer of the tax on the transfer of real estate is the acquirer of real estate. The tax base for real estate sales tax is the market value of the real estate at the time of its acquisition.

The tax rate for the sale of real estate is proportional and amounts to 3% of the tax base (for the sale of new buildings, VAT is paid at a rate of 19% and in this case, the buyer is exempt from paying tax).
Thus, if you have executed a sales contract for the amount of 100,000 euros, then you are required to pay a tax of 3%, i.e. 3,000 euros. However, there are nuances. Tax appraisers can check the compliance of the value of the property specified in the purchase and sale agreement with its market value.
In order to pay the tax, you personally or through a notary's office or with the help of an agent, within 15 calendar days after full payment of the property, you are required to submit an application (porezka prijava) to the tax office according to the established form. To do this, you must obtain a tax number (maticni broj) in advance. In this application, you indicate the value of the property according to the purchase and sale agreement, and also fill in other data, including the amount of tax payable in the amount of 3% of the agreement amount. You can obtain a tax number from the tax office at your place of residence in Montenegro or at the location of the property you purchased. To do this, you must present your foreign passport to the relevant tax office employee.
If tax appraisers draw up a report stating that the price of the property you purchased is underestimated in the contract, you will have to pay additional tax on the difference between the price indicated in the appraisal report and the price specified in the sales contract. You will also have to pay for the work of the appraisers, the cost of which ranges from 40 to 80 euros, depending on the community. To avoid additional payments, as well as to minimize the amount of tax, you can contact our lawyer and he will help you legally pay the tax without extra costs.
If you have any questions on this topic, please contact the contacts indicated on the website.