PROPERTY BUYING GUIDE IN MONTENEGRO

Buying a property in Montenegro is a simple process, and we do everything we can to make your transaction go as smoothly as possible. The following is a summary of the procedure:

 

• Agree on a price that is fair to both you and the vendor.

• Appoint a lawyer (licensed in Montenegro) to represent you in Montenegro.

We are pleased to have a list of attorneys who have been recommended to us.

• We always recommend putting down a deposit (between 1000 euros and 10% of the purchase price) to take the property off the market; at this point, both parties sign a reservation agreement. Typically, the deposit would be held by the vendor, his lawyer, or the agent.
• Open a local bank account – this will come in handy later on when it comes to paying taxes and bills.

• The contract terms are negotiated between the buyer and seller – usually by lawyers. The contract is signed in the notary's office in Montenegro by you or your lawyer (via Power of Attorney), and the remaining balance is transferred from your bank account (in Montenegro or your home country) to the vendor according to the dynamics stated in the Contract.

• Once the full purchase price has been paid to the seller, the lawyer or notary usually applies to land registry for a title change.
• A 3% purchase tax is paid. (The Inland Revenue office determines the property's value.)
• After that, the property is registered in your name.
Foreign buyers have the right to purchase and register any property in their own name, with the exception of the following:

- agricultural land, - land that has not been zoned and is of special importance to the government,
- the property that is less than 300 meters from the Army's headquarters,
- any parcel of land larger than 5.000 m2

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POA:

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The purchase contracts must be notarized in the presence of a Montenegrin notary. You must be present in person or use a Power of Attorney to do so. It is preferable to organize this while you are still in Montenegro; otherwise, your lawyer will send you the text for the POA, which you will need to notarize in your home country and send to Montenegro via DHL or FedEx.

Please consult with your lawyer or agent if you require the document to be apostilled. In Montenegro, the cost of notarizing the POA is around 50 EUR plus the interpreter's fee. If you are reselling the property, you must sign a contract.

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LAWYERS:

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We strongly advise you to hire a lawyer to represent you in the purchase; lawyers are completely independent of the agents and work solely in your best interests. They usually charge 1.000 EUR, but this can vary depending on the complexity of the purchase process. They will guide you through the entire process until you are registered as a new owner.

Their service includes an independent check of the property deeds, legal advice, drafting the Contract, negotiating the terms, arranging for the Contract to be notarized, registering you as a new owner, and arranging for the purchase tax to be paid. We are happy to provide a list of recommended lawyers.

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THE COST OF BUYING PROPERTY IN MONTENEGRO:

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• Legal fees: Typically, lawyers charge 1,000 EUR for the entire process, but this can vary depending on the complexity of the purchase.
• Notary fees vary depending on the amount of the Contract; for example, a fee of 200.000 EUR would be around 500 EUR; please contact us for more information.

• Interpreter fees: The fee for translating the Contract is 20 EUR per page, which is usually around 120 EUR, and the fee for oral translation is 50 EUR per hour.
• 3 percent sales tax These are the main fees; however, there may be additional small fees of up to 100 EUR for applying to the land registry. We do not charge the buyer a fee.

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TAXES:

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The most important is purchase tax, which is 3% of the value of your property as determined by the tax office regardless of the contract purchase price. Purchase tax is due when the main contract is signed. It is recommended that you pay the tax within two weeks of receiving the invoice, as interest will be charged for each day you are late.

In some cases, purchase tax is not payable for off-plan developments; however, check with your lawyer to see if this law applies to the property you are purchasing. You must pay an annual property tax if you are the registered owner of the property. The cost is determined by the size and location of the property. Property owners are required to pay Tourist Tax in addition to the annual property tax. Typically, you will receive the bill in the mail in the spring. It is possible to pay it at the Tax Office (Poreska Uprava).

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NOTARISING THE CONTRACT:

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The purchase Contract must be notarized in front of the notary, and if you are present at the time of signing, a court-licensed interpreter must be present and read the Contract to you in the language you understand. Their hourly rate is usually 50 EUR. If you are unable to attend, your lawyer will send the translated Contract to you (again translated by court licensed interpreter) Before signing on your behalf, I will send it to you for approval.

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REGISTERING THE NEW OWNER:

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The land registry is required to change the owner's title within 60 days of receiving the application. However, this may take longer at times, particularly during the summer and holiday season. Typically, the process is handled by lawyers. You will receive the LIST NEPOKRETNOSTI (land registry extract) of the property with your name at the end.