Property tax in Montenegro: features, rates and advantages for investors

Montenegro remains one of the most attractive countries in Europe for the purchase of real estate, not only due to its mild climate, picturesque nature and stable economy, but also due to its low tax burden. Property taxes here are significantly lower than in most European Union countries, which makes the country especially interesting for foreign investors and those who plan to move or buy a home by the sea. Property tax on purchase In Montenegro, when buying real estate, the property turnover tax is paid. Its rate is 3 percent of the object's value if the object's price does not exceed 150,000 euros, if the object is more expensive than 15,000 euros, the tax rate is 4,500 euros + 5% of the amount exceeding 15,000 euros, if the object's price is above 500,001 euros, the tax amount is 22,000 + 6% of the amount exceeding 500,001 euros.This tax is charged once and only in case of purchase of secondary real estate. The purchase of a new property from a developer is subject to value added tax (VAT) of 21 percent, but most often VAT is already included in the price of the property, and the buyer does not pay it separately. Annual property tax After the purchase, the owner is required to pay property tax annually. Its size is determined by the municipality in which the property is located. The rate varies from 0.1 to 1 percent of the cadastral value of the property. This cost is usually significantly lower than the market price, which makes annual payments quite affordable. For example, the tax on average-cost housing can be as low as 100 to 300 euros per year. Advantages of the Montenegrin tax system One of the key advantages of Montenegro is the simplicity and transparency of the tax system. The absence of complex bureaucratic procedures and loyal rates make the process of owning real estate affordable and comfortable for both residents and foreigners. In addition, the country has one of the lowest income taxes in Europe — 9 or 15 percent, depending on income, and the corporate tax is also only 9 percent. This allows you to profitably combine real estate investments with business registration or rental housing. Conclusion Low tax rates, a stable legal system, and a growing interest in real estate on the coast make Montenegro one of the best destinations for home purchase in Europe. Buying here is not only an opportunity to live or relax in one of the most beautiful corners of the Adriatic, but also a reasonable step in terms of preserving and increasing capital.