Montenegro property buying guide
Montenegro property buying guide
If you are looking for the home in your dreams or your property for investment, Montenegro is definitely one of the best and affordable places in Europe.
Foreign nationals, even if they are not involved in any business activity in the country, can easily buy houses and apartments in Montenegro.
The Law on Proprietary and Ownership Rights of Montenegro which regulates property rights in Montenegro since 2009, envisions that as a general principle foreign citizens may acquire immovable properties in Montenegro like Montenegro citizens. However, the Law also presupposes the following exceptions in the acquisition of ownership rights by foreigners:
Natural resources, goods in general use, agricultural land, forest and forest land, cultural monument of great and special importance, ,immovable property in a land-border area to a depth of one kilometre and islands, immovable property 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, are excluded from these envisaged rights.
Exceptionally, a foreign national may acquire a property right if there is contract (purchase and sale, gift, exchange, etc.) on alienation residential building located on the agricultural land with an area of 5,000 m2, forest and forest land for that particular site.
However, a company must be registered to purchase land in Montenegro. Property can then be transferred to a person in a simple procedure.
In Montenegro there are two conditions necessary to complete the purchase of a property and confirm ownership. These conditions are: “justus titulus” (legal entitlement to the property), and “modus aquirendi” (the registration of the property with the Area of Land Registry).
When a property is selected, a contract of purchase is prepared and signed by both parties or by their authorized representatives.
A purchase contract should be prepared in the form of a notary contract prepared by a public notary who has authority within the borders of the municipality in question.
Once legal ownership is confirmed, a section within the Local Municipal Offices establishes property value. The buyer then is supposed to pay the property transfer tax of 3% of the agreed valuation. After this tax is paid, the purchase contract is confirmed with an official stamp, and after this stage the property can be registered in the Local Area Property Registration Regulation.
The purchase is then completed by paying the remaining balance. Besides this tax, there are other costs such as transfer tax, registration and notary fees and value added tax. Regarding the payment, you may alternatively pay a deposit, wait for up to one month and then pay the remainder. This depends on the agreement you made with your property owner (s).
If you buy property in Montenegro, you will have to pay an annual tax depending on the location and size of the property. After the final and non-appeal registration of the Authorized Land Registry, the purchase is completed.
Before you buy your property, you must make sure that you do the following:
The Land Registry Extract providing details of land use details (“catastarska skica”) regulations (building restrictions) and all information about the structure.
For properties that are not included in the Land Registry, a Municipality Sketch is issued (not applicable to all areas).
Planning permit (“dozvola za projektovanje”): When you buy an off-plan (a project-in-progress property) from a developer, you must be sure that the development is approved by the local municipality.
It is also important to take a look at the Urban Plan, which states whether there is any building restriction on the property you want to purchase, whether it is in a protected or green zone, or whether it includes a public road or the like.
Do not forget to check the receipt of the payment made by the previous owner for the annual property tax. It will also be wise to make sure that the property has unpaid wages and taxes from previous years or not.
Land Register and Cadastre certificate indicating the boundaries and square meters of your land and property
The Permission to Use granted by the municipality for new buildings or reconstructions confirms that this property is habitable. You will need this certificate for your operations and many transactions with electricity and water companies.
Title deed – It is important to check whether there is an exact representation of the property in the deed given to you.
While we are hoping that this information is useful for you, please be aware that when considering a purchase, this is not the only guide for potential buyers to follow. We highly recommend independent legal and financial advice for all stages of the purchase of property buyers in Montenegro.
If you would like to know more about buying property in Montenegro, please feel free to contact us for more information and visit our website at https://www.homeinmontenegro.com/en to see available for sale properties.