The Montenegro real estate market has undergone substantial growth and development in recent years. This overview offers an insight into the essential aspects that define the current state of the property sector in Montenegro.

The eligibility of foreign citizens to acquire real estate in Montenegro

Foreigners, individuals, and corporate entities can freely buy apartments, houses, and commercial properties in Montenegro without any restrictions. However, foreigners are restricted from buying land, including agricultural and forest land.

Exceptionally, a foreign physical person may acquire the ownership right on agricultural land, forests, and forest land of a surface up to 5,000 m2, only if a residential building located on this land is subject to the contract of divestiture (sale, gift, exchange, etc.).

Moreover, a foreign physical person may, on the territory of Montenegro, acquire the ownership right on immovable property through inheritance in the same way as a citizen of Montenegro. Furthermore, a foreign person can be entitled to a long-term lease and concession on the immovable property for natural resources and immovable properties located in the area declared under the protection of interests and safety of the country.

Additionally, foreigners are eligible to obtain a loan from a Montenegrin bank for real estate purchases, however, the bank may require various documents to verify the buyer’s financial stability.

It’s advisable to confirm whether any bilateral agreements between Montenegro and your home country could impact property acquisitions. Consulting with a tax and legal professional can be beneficial in navigating the complexities. Our firm offers comprehensive tax and legal services in Montenegro, among other areas. Contact us, and we would be delighted to arrange an introductory meeting with you.

High areas for real estate investment and prices in Montenegro

• The Bay of Kotor – stands out as the most exclusive area in Montenegro and has emerged as a popular tourist destination in recent decades, thanks to its breathtaking natural scenery and profound cultural heritage. Recognizing its significance, UNESCO has safeguarded the Bay of Kotor since 1979. Investing in the Old Town of Kotor is one of the most profitable investments considering the high number of tourists this area attracts. Buying real estate in Kotor comes at an average price of approximately from 2 842 Euro to 3,900 Euro per square meter.

• Tivat – has become a top tourist destination in Southeast Europe. Notably, projects such as Porto Montenegro and Lustica Bay have contributed to its popularity. Additionally, Tivat’s international airport enhances its investment appeal. In Tivat, real estate prices vary. Starter homes are around €2000-€3000 per square meter, while luxury beachfront properties can go from €7000 to a whopping €10000 per square meter.
• Budva – is a regional heavyweight and attracts the most tourists due to its old town, amazing coastline, and lively social atmosphere. Furthermore, Budva offers a diverse range of property types. Purchasing a property in Budva will cost you around €2,500 to €4,000 per square meter.
• Kolasin – is just 30-minute drive from the Podgorica international airport and a scenic 1 hour and 30 minutes from the coast. It’s drawing attention from international and local investors due to its strategic location, excellent infrastructure, connectivity, stunning nature, and a modern ski center that ranks among the best in the region. You can get a family house for €100,000 to €200,000. For a fancier chalet-style villa, expect to pay between €300,000 and €500,000. Modern apartments range from €1,200 to €1,500 per square meter.

Return on Investment

After buying a house or apartment, investors can earn money by renting it out while they’re not in Montenegro, making a return on their investment. Certain high-end residential and tourism projects in Montenegro guarantee buyers an annual return on investment ranging from 4% to 8%. Furthermore, when assessing the potential returns it is important to consider the specific locations within the country.

Investing in a property during the development phase offers the advantage of securing a more favorable price compared to post-construction prices. Additionally, there’s the potential for an annual return on investment once the property is completed, given the thriving tourism industry in Montenegro, which promises even greater growth prospects.

Incentives for ownership and investment on real estate for foreign citizens in Montenegro

The Montenegrin government has implemented various law regulations and incentives for those who invest in real estate in the country. Investing in real estate in Montenegro allows you to become a resident through the country’s residency-through-investment scheme.

The Montenegrin constitution protects and emphasizes the private property, ensuring that foreigners, including investors, enjoy equal legal protection.

The Law on VAT prescribes exemption from VAT for the supply of products and services for the construction and equipping of a hospitality facility with the rating of five or more stars. For a hospitality facility, the tax rate may be reduced for a hospitality facility which is category 3 up to 15%; category 4 up to 30%; category over 4 up to 70%.

For real estate used in agricultural production, processing, packaging, or manufacturing by owners or users registered as agricultural producers, legal entities, or entrepreneurs in Montenegro, there’s a potential tax reduction. This reduction can be up to 90% of the tax liability, compared to the standard rate set by law, for properties actively utilized in these agricultural activities.

Companies engaged in innovation activities can reduce real estate tax by 50% if the property is used for scientific research, innovative programs, or projects, as well as innovation infrastructure. This reduction applies while the company holds the status of a beneficiary of incentive measures.

In conclusion, the Montenegro real estate market has seen significant growth, driven by diverse offerings and attractive locations. Foreigners can freely buy various property types and the country also offers a variety of incentives for local and foreign citizens.

If you require assistance or have any inquiries regarding our services, we warmly invite you to reach out to our office. Our dedicated team is here to provide you with expert guidance and support tailored to your specific needs. Whether you’re seeking information, need professional advice, or wish to discuss how we can assist you further, please do not hesitate to contact us.