New Real Estate Laws in Montenegro - 2025

1. The law on the legalization of illegal buildings
   The Government of Montenegro has approved a draft law on the legalization of unauthorized structures, aimed at streamlining chaotic development and protecting territorial resources. The draft was passed at the 89th Cabinet meeting in July 2025.
   The main provisions:

• Must be registered with the real Estate cadastre within six months. After this period, the right to register is lost.
• Clear criteria and conditions for legalization and a clear division of responsibility have been introduced: municipalities register buildings up to 500 m2; larger ones or those located in protected areas — a special government agency, the Legalization Administration
• The legalization period has been extended from two to three years, especially for facilities in the tourism sector, such as hotels
• The possibility of installment payment of fees for up to 30 years, with a 20% discount for a one-time payment
• A special coastal fee is provided for facilities on the coast
• Tightened measures: if an application for legalization has not been submitted, it has been rejected or registration has not begun, it is possible to impose an administrative order for demolition within three days after notification.
  It is expected that due to the new laws, it will be possible to collect hundreds of millions of euros, both from fees and taxes, which will be used for infrastructure development.

In June–August 2025, a law was passed regulating the activities of realtors and intermediaries in the real estate market (Montenegro Business).
Key innovations:

• Mandatory license and professional examination for agents.
• Creation of a registry of licensed agencies.
• Introduction of compulsory professional liability insurance (at least 20,000 € per case, 60,000 € per year) (Montenegro Business).
• Binding contracts with clients: with details of services, deadlines, cost (Montenegro Business).
• Serious fines for those working without a license — up to 20,000 € (Montenegro Business).
• The deadline for compliance is 12 months; full launch of the interaction system through the electronic register of adherents (Montenegro Business, amforaproperty.com ).
  These measures are designed to increase transparency, protect consumers and stabilize the real estate market, which is especially important for foreign investors (Montenegro Business).

2. Tax changes — stimulating investments
   The tax legislation was also updated in 2025 and affects the real estate market.
   Major changes:

• Annual property tax: from 0.25% to 1% of the cadastral value; in tourist areas (for example, hotels) up to 5.5%. Municipalities can increase rates by 25-150%.
• Tax on the purchase of real estate:
  o up to 150,000 € — 3 %
  o 150,001-500,000 € — fixed 4,500 € plus 5 % over
  o above 500,000 € — fixed 22,000 € plus 6 % over .
• Tourist tax: 0.1–1 € per day per adult, children under 12 and the disabled are exempt.
• Despite the increase in rates, the market remains active — the demand for real estate remains high, the growth is driven by investor interest and the prospect of joining the EU
  Results
  Montenegro is actively regulating the real estate market in 2025: laws are being introduced to legalize illegal buildings and increase transparency of transactions, strict building requirements are being returned, and a new tax policy is being introduced. These measures should streamline the market, increase the profitability of municipalities and create an attractive investment environment.