Notice for Montenegro

Can anyone (including foreigners) own and occupy real estate in your jurisdiction (including shares in property owning companies)? Are there any restrictions?

Yes. Foreigners can own and occupy real estate, including shares in property owning companies, without restrictions. As a general rule, Montenegrin laws prohibit acquisition of certain type of immovable property by foreign individuals or entities, such as acquisition of land designated as forest, agricultural tenure etc. However, in line with the Agreement on Stabilization and Accession that Montenegro concluded with European Union, EU citizens have the same treatment as Montenegrins. The same rule is applied to legal entities which means that mentioned restrictions are not applicable when it comes to foreign legal entities from EU countries.

Are there restrictions on lending for the purchase of real estate by foreign companies? If so briefly give an outline?

No. There are no restrictions on lending for the purchase of real estate by foreign companies.

Please provide a short summary of the fees and costs (including tax) relating to buying real estate in your jurisdiction.

Sale and Purchase Agreement of Real Estate is subject to notarization and notary fees are usually paid by the buyer. The purchase of real estate property in Montenegro is also subject to property transfer tax. The tax is levied at the purchase price of the property (agreed/paid between the seller and the buyer) at 3% tax rate.

Are there taxes applicable to owning real estate and can the burden of the taxes be passed to someone else (e.g. a tenant or an occupier – not being the owner)?

Owners of the real property located in Montenegro are required to pay property tax to the municipality in which territory the real property is located. Applicable tax rates vary from 0.1% to 5.5% depending on the municipality where the property is located, as well as on the type of property. The tax base for corporate taxpayers is the market value of the real property. The amount of the property tax is established by the resolution of the local tax authority and is payable in two annual instalments.

The tax is paid annually (for calendar year).  The amount of tax due has to be established in a resolution of the competent unit of the Tax Administration, on the basis of tax return filed by the owner of the property. The amount of tax assessed by the Tax Administration should be paid in two instalments (first – by 30 June, and second – by 31 October).

The person liable for payment of tax is the owner of the property. The cost of tax may be shifted for example, to the tenant (under the agreement), but, legally, the owner remains liable to the Tax Administration for the payment of tax.

Are there tax breaks or other incentives for foreigners to buy real estate in your jurisdiction? If so what are they?

There are no tax breaks for foreigners to buy real estate in Montenegro. Regarding the incentives, the foreigners who are the owners of the real estate in Montenegro can obtain temporary residence.