How does purchasing real estate in Montenegro affect visas and the rights of foreigners?

Article content

Rights and obligations of foreign buyers, finding housing, step-by-step guide to the transaction, remote purchases, additional expenses, features of the real estate market, summary. Key points to remember.

Rights and obligations of foreign purchasers

Let's start with the rights and obligations of foreign buyers. What kind of real estate can foreigners purchase in Montenegro? Currently, there are some minor restrictions for foreign citizens in Montenegro. In general, foreigners have the opportunity to acquire real estate on behalf of individuals or legal entities, unless it concerns certain categories of land and specific properties.

According to the current legislation of the country "On Property Rights Relations," adopted on March 25, 2009 (paragraph 415), there are special conditions for individuals who do not hold Montenegrin citizenship:

• It is not allowed to own agricultural land.
• it is not allowed to acquire forested areas;
• It is not allowed to obtain plots located within national parks.
• It is not allowed to acquire cultural heritage objects.
• It is not allowed to own real estate within a radius of less than one kilometer from the state border;
• It is not allowed to buy land on the islands.
• It is not possible to have strategic objects.

A foreigner can purchase a piece of land with a maximum area of 5,000 square meters if there are already buildings on it. To buy a plot without buildings, it is necessary for the plot to comply with a detailed development plan that includes a construction permit and an approved project.

Land plots located in natural green zones are not subject to construction.

Buying real estate and obtaining a visa

An equally important question is whether purchasing real estate grants the right to a visa and residence permit. In 2015, amendments were made to the "Law on Foreign Citizens" that simplified the process for foreigners to obtain a one-year residence permit (with the possibility of subsequent renewal) after acquiring residential or commercial property in Montenegro, regardless of its market value.

Depending on the circumstances, foreign investors may consider various immigration programs in Montenegro. For example, there is an opportunity to obtain a residence permit in just two months with an investment starting from 30,000 euros. There is also a procedure for obtaining Montenegrin citizenship within three months, with a financial investment starting from 450,000 euros. A complete description of the "Montenegro Residence Permit for Real Estate Investors" program can be provided upon request.

The right to a residence permit begins after the registration of property and ends at the moment of sale of that property. However, it is important to note that this type of visa does not grant the right to employment and does not ensure the acquisition of permanent residency after five years.

Conclusion

Note! At the end of 2022, the government of Montenegro ended the popular investment citizenship program, which had a significant impact on immigration processes.

Responsibilities of property owners

As for the responsibilities of property owners, when purchasing on the secondary market, it will be necessary to pay a real estate turnover tax, which is at least 3%. During the ownership of the property, it is also required to regularly pay utility bills and an annual property tax, which can range from 0.2% to 1% of its value.

To sum up what has been said aboveIt can be noted that by considering all the aforementioned aspects when purchasing real estate in Montenegro, one can avoid many difficulties and ensure comfortable conditions for further ownership of their property.

New tourist tax for property owners

A new tourist tax has been introduced in resort areas, which affects property owners. If you plan to rent out your property, don't forget about the need to pay income tax, which also applies to non-residents. You can find more detailed information about ongoing tax obligations in a special article on property maintenance in Montenegro.

For tax residents of Russia, i.e., those who live in the country for more than 183 days a year, there is a requirement to notify the Russian tax authorities about their foreign bank accounts or the registration of foreign companies. This information can be important when conducting real estate transactions.

Real estate market research

Before diving into the process of searching for real estate, I highly recommend studying the current state of the real estate market in Montenegro. This can be done through:

• Reading articles
• News monitoring
• Researching price ranges and available offers

If you don't have time for independent searches, it makes sense to seek help from a realtor. They can help you articulate your needs—whether it's a convenient location, distance to the sea, size of the property, or your budget.ProfessionalThey will find a suitable property for you, provide the necessary consultations, prepare all the required documentation, and conduct an independent appraisal.

Choosing a reliable realtor

Although you can try to make a purchase on your own, it is often difficult for foreigners to manage without the help of a qualified realtor. To find a reliable company in Montenegro, you can refer to a directory of available agencies.

Real estate market offers

Let's take a look at some offers in the real estate market of Montenegro:

• Villa in Herceg Novi:For sale at €47,250. This is part of an old stone building with an outbuilding, located in the picturesque village of Kameno, which is situated in the municipality of Herceg Novi. This quiet and green area is set in a mountainous region and includes a mini-market and two cafes. The living area is 32 sq. m, while the outbuilding covers 24 sq. m. The land plot measures 369 sq. m. The house has electricity and water supply installed; you just need to do the interior finishing.
• Land plot in Mirishta:For sale at €799,000 with a total area of 7,850 m². The plot is located on the Lustica Peninsula and borders the coastal area known as "marine good," which reaches a width of 30-40 meters from the water. Permanent structures cannot be built on this land, but recreational areas and walking paths are permitted. Access to the plot is via an asphalt road, except for the last 200 meters.
• Commercial real estate in Dzhurashevichi:For sale at €320,000. A functioning mini-hotel is being sold. The total area of the building is 300 m², and the land area is 400 m². The hotel accommodates a maximum of 20 people, allowing for personalized service for each guest. The mini-hotel features five comfortable suites designed for a pleasant stay for guests.

Conclusion

Overall, the real estate market in Montenegro offers a variety of opportunities for investment and rental. If you are planning to purchase a property, it is crucial to approach the selection process carefully and consider all the details of the transaction.

Description of apartments and real estate in Montenegro

All apartments have mini-kitchens, air conditioning systems, and bathrooms. For example, a plot of land in the legendary city of Bar, located in Montenegro, is offered for the price of €670,000. When purchasing this property, you can obtain a residence visa. This plot is managed by the municipality of Bar and is located in an area known as Bar Field.

The land area is 7,447 square meters (75 acres) and includes six cadastral plots. The territory is flat, making it ideal for construction. Owners will be able to build between one and seven residential buildings, adhering to a height restriction of three stories. It is also possible to create condominiums or commercial structures, providing a wide range of opportunities for future use.

New villa in Sutomore

The company "Adriatic Sea Expert" is introducing a new villa to the market in Sutomore, Montenegro, priced at €255,000. This comfortable two-story house covers an area of 242 square meters and includes four separate one-bedroom apartments, all of which have access to cozy terraces and free parking spaces.

The building materials used are of high quality, and the area around the villa is 190 square meters. Three out of the four apartments are already furnished with new furniture and appliances, making them comfortable for living or renting out.

House in Žabljak

In addition, a new house is for sale in picturesque Žabljak, Montenegro, for €85,000. The area of this house is 84 m2, and it can be divided into two separate plots; it is located in the Borje area. The stated price includes renovation work, and all necessary documents have already been submitted for legalization.

The 303 m2 plot offers the possibility of dividing it into two independent houses, and there is also parking available for cars.

Apartment in Budva

In Budva, an apartment is offered for the price of €160,000. It is located in the cozy neighborhood of Seoce and features a two-bedroom residence that offers a stunning panoramic view of the sea. Situated on the fourth floor, the apartment has an area of 71 m2.

Internal distribution includes:

• corridor
• a spacious living room with a kitchen
• two bedrooms
• bathroom
• a large terrace

Part of the terrace is glazed, allowing you to enjoy it at any time of the year. The apartment is equipped withunderfloor heatingthat creates additional comfort.

Apartments on the Lustica Peninsula

Don't miss the chance to acquire unique apartments on the Lustica Peninsula in Montenegro for €554,000. These apartments are located in the new residential complex Jasmine, situated in the picturesque Marina Lustica Bay.

Potential buyers can take advantage of excellent conditions for purchasing a new property, including payment installments for up to five years.

The 70.11 m2 apartments will offer their owners a high level of comfort and mesmerizing landscapes with a magnificent sea view.

Apartment in Bečići

There is also an apartment in Bečići, Montenegro, priced at €120,000. This is a duplex with an area of 55 m², located on the fifth floor of a multi-story building with an elevator. The apartment is just a five-minute walk from the sea.

On the first level, there are:

• living room
• kitchen
• bathroom
• a balcony with a picturesque view of the mountains

On the second level, there is a bedroom and an additional bathroom, making this property ideal for comfortable living.

A parking space is for sale.

A separate parking space in the garage is for sale for20,000 eurosAdditionally, an interesting real estate property is being offered in Montenegro – a hotel in Sutomore, the price of which is299,000 eurosThis cozy hotel complex covers an area252 square metersand is located on a plot of land with an area of540 square metersHowever, there are no benefits in the form of terraces provided.

The hotel has9 comfortable apartmentsOn the first floor, there are4 apartmentsfrom which2 are designed for 5 peopleand the others2 are intended for two people to live in.There is also a summer kitchen and a separate single-story building here. The remaining rooms are located on the second floor.5 apartmentsand a small kitchen, each accommodation is equipped with its own bathroom with a shower cabin.

Apartment in Žabljak

Available for salean apartment in picturesque Žabljakfor80,000 eurosThe total area of this apartment is64 square metersa plot of land is included with it in280 square metersThe location next to a pine forest and amidst untouched nature creates the perfect conditions for relaxation. The space is finished with high-quality materials and furniture.

When purchasing an apartment, it is also possible to receiveresidence permit.

Villa in Bar

Another interesting investment could bevilla in Barwith a price tag175,000 eurosThe area of this villa is200 square metersand includes4 apartments (2 with one bedroom and 2 with two bedrooms), as well as 4 bathroomsorganized on two floors.

The villa is furnished and equipped with household appliances, and it has...air conditioning system...boilers and modern plumbing. Additionally, there is open parking available.

Like the cherry on top, the villa's location is just800 meters from the seaAdditionally, essential infrastructure facilities are located nearby, including shops, pharmacies, schools, and kindergartens. The nearest airport is Tivat.

Apartment in Budva

In addition to this, inBudvaAn apartment is for sale at the price of1,640,000 eurosThe total area of this apartment is172 square metersand includes three bedrooms with views of the sea and the city, located on8th floorthe newest complex located on the first line of the Budva coastline.

The complex includescondo hotelwith a five-star level of service and located in a unique spot at the center of events. The apartments being offered on the market are located aton the fourth, fifth, sixth, seventh, and eighth floorsThe tenth floor is designated for special purposes.

Furnished apartment in Budva

In Budva, you can also findfurnished apartment, the price of which is365,000 euros, the area of which is equal to104 square metersIt is located at9th floora residential complex with an elevator, built inin 2017The apartment features a stylish modern design and is finished to a high standard.

The living space includes:

• two bedrooms,
• two bathrooms,
• spacious living roomwith a kitchen area.

New house in Kostanitsa

It is also worth consideringnew house in Kostanitsafor725,000 eurosThe area of this modern building is235 square meters, offering6 bedroomsand4 bathroomsThe purchase of this property offers the opportunity to obtainresidence permit.

This magnificent house is located inin the prestigious area of Kostanitsajust in30 meters from the shoreThe area features terraces with mysterious views of the Bay of Kotor. The layout includes:

• garage,
• sauna,
• summer kitchen,
• living room,
• private courtyard.

Real estate in Montenegro: Opportunities for purchase

In the fairy-tale Montenegro, specifically in the city of Bar, there is a unique opportunity to become the owner of a wonderful house with an area of 200 square meters, priced at €180,000. This elegant residential property is located just a few meters from the coast, on the picturesque shoreline of Bar.

The property, which has an area of 400 square meters and includes a house with three floors, was built in 2016. The complex features a garage and parking spaces, as well as a storage room. A pleasant courtyard with a barbecue area creates an atmosphere of coziness and comfort. One of the most remarkable features of this house is the picturesque sea view that can be seen from all the windows.

Description of the house

On the first level, there is a bright living room and dining area decorated with panoramic windows, offering a mesmerizing sea view, as well as a cozy kitchen and bathroom.

Signing the contract

After completing all the necessary preparatory activities, both parties — the buyer and the seller — gather in the presence of a notary to sign the contract. This document can be either a preliminary agreement (pre-contract) or the main contract (purchase agreement). A preliminary agreement is often required when one of the parties demands it, and it is especially relevant in transactions involving properties that are still under construction.

Deposit amount

At the time of signing, the buyer provides an initial amount known ascaparato ensure that the property is taken off the market. Usually, this deposit amounts to 5 to 10% of the total property value. It is important to understand that if the buyer decides to withdraw from the deal later, the deposit becomes non-refundable. In a situation where the deal is canceled due to the seller's fault, they are obliged to return the deposit to the buyer in double the amount.

Key aspects of the contract

The contract that was prepared in advance includes several important points:

• Full details of the parties;
• Information about the seller and the buyer;
• Information about the object and its cost;
• Payment terms and deadlines.

In addition, the preliminary contract specifies the date by which the final agreement must be signed, outlines the obligations of the parties, and defines the guarantees.

Encumbrance of real estate

If the buyer insists on imposing a burden or in the case of transactions involving properties that are under construction, the notary is required to add the appropriate entry to the certificate of ownership. This is done to ensure that during the fulfillment of contractual obligations, the property cannot be rented out, sold to other parties, or used as collateral for a mortgage loan.

Notary's work

It should be noted that the notary prepares and certifies both the preliminary and the main contract exclusively on the territory of Montenegro. The document is drafted in the Montenegrin language and is executed in the presence of both parties or their representatives. If one of the parties is a foreign citizen, a licensed translator is necessarily involved in the process to assist with the translation of all necessary documents and to ensure clarity of the terms of the transaction.

The document is signed by a notary, the parties to the agreement, and a court translator. Each party receives their copies of the contract, while the remaining copies are sent by the notary to the real estate management and the tax office.

Obtaining the full version of the contract

The buyer does not receive a complete copy of the contract until all financial obligations for the property are fulfilled. The full version of the contract will be provided only after all payments are completed and the seller signs the document transferring ownership rights. All costs associated with drafting, notarizing the contract, and registering it in the cadastre are the responsibility of the buyer.

Documents for a real estate transaction in Montenegro

During a real estate transaction in Montenegro, it is necessary to gather important documents without which the completion of the operation is impossible. At the time of signing the contract, the buyer must have their foreign passport with them, while the seller is required to provide their passport.

It will also be necessary to provide the originals of the documents confirming ownership of the property. If the seller is married, they need to obtain the spouse's consent for the sale of the property; if there is no marriage, it is advisable to provide a corresponding certificate to that effect.

Additionally, it is necessary to prepare a statement from the tax service confirming the absence of tax debts, including taxes for the year in which the sale takes place. Don't forget to ensure the availability of receipts proving payments for utilities.

Payment process in Podgorica

In the capital of Montenegro, Podgorica, the third stage of the deal is approaching — the payment process. Financial settlements for the property are carried out in accordance with the terms specified in the contract, whether it is the main or preliminary agreement.

Payment can be made either as a lump sum or in installments at times convenient for both parties. Usually, payments are made in a cashless form, where funds are transferred to the seller's or notary's account, and the transfer can be made from bank accounts in any country, including Montenegro.

The real estate sale will be considered complete only after the seller receives the full amount specified in the contract.

The process of buying and selling real estate under construction

If the deal involves a property under construction, it may take a longer time until the documents from a licensed surveyor with floor plans and individual apartments are registered in the cadastre.

This includes signing the main contract and transferring ownership of a specific apartment that is registered in the cadastral register. The seller signs a statement at the notary's office, confirming the receipt of the full payment, the completion of the transaction, and the absence of any claims.

This document is calledclausula intabulandiAfter that, the buyer or their representative receives a complete copy of the contract, which includes all the necessary personal data of the parties, the cadastral number of the property, as well as the price.

The notary sends one copy of the agreement to the cadastral office for the purpose of registering the new owner — the buyer.

Payments of citizens of the Russian Federation

As for the transfers of citizens of the Russian Federation, currently, individuals who do not have a residence permit in either Montenegro or the European Union countries cannot open accounts in local financial institutions.

At the same time, there are certain restrictions on active accounts — the amount in them must not exceed 100,000 euros. However, foreign accounts can be used for transaction settlements from:

• Serbia
• Kazakhstan
• Georgia
• Armenia
• Other countries where local banks are willing to cooperate with citizens of Russia.

Payments can also come from banks in Russia that have not been subjected to international sanctions. To make a transfer, it is necessary to have documents confirming the grounds for the transaction (a sales contract) and to request special permission from the government commission, as Montenegro is included in the list."unfriendly countries".

This moment is extremely important and deserves attention when preparing for the deal.

Transactions using cryptocurrency and rubles

Some realtors in Montenegro are willing to consider transactions conducted using cryptocurrencies or Russian rubles. The provided links can help find current options that meet these conditions. Currently, each transaction involving Russian citizens is tailored to individual circumstances.

It is recommended to consult with realtors who can offer the best options for transferring funds to Montenegro.

Payment of tax

The fourth stage includes the mandatory payment of tax after the completion of the real estate purchase transaction. The buyer must pay a turnover tax starting at 3%. This rate is determined based on the market value of the property. It is worth noting that the purchase of housing on the primary market from a legal entity registered as a VAT payer is exempt from tax.

Transparency of transactions

Please note that in Montenegro, price undercutting in contracts for the purpose of tax reduction is practically not practiced. This market is characterized by high transparency. Government inspectors carefully check each transaction to determine the correct amount of tax.

If the price of the property is significantly lower than the typical market value, for example, due to poor condition, a motivated application will need to be submitted along with photographs of the property. Otherwise, the inspector will assess the tax based on the market value.

Deadlines for contacting the tax service

Within 15 working days after the purchase is completed, the buyer or their designated representative must contact the tax office to clarify the final tax amount. The tax payment should also be made within the same period.

It is recommended to send a copy of the payment document to the inspector, which can be done conveniently via email.

It is important to note that in case of late payment, the buyer will incur a penalty of0.03%from the amount for each day of delay.

Registration of property rights

As for the fifth stage of the process, it pertains to the registration of ownership rights. The complete version of the sales contract, which clearly states that ownership is transferred to the new owner, serves as the basis for obtaining registration with the cadastral office in Montenegro.

The officially established registration period is30 working daysHowever, in practice, this process takes two to three weeks.

After successfully completing the registration, the buyer or their representative receives the original extract from the cadastral register.list of real estate), confirming their rights to real estate in Montenegro. Information about the new owner is immediately entered into the electronic cadastre.

Remote registration

If the buyer is unable to be present for the signing of documents for any reason, remote processing is provided. In such cases, a representative from the real estateagency through which the purchase is made usually receives a power of attorney to sign the necessary documents.

In this case, it is essential to specify the cadastral data of the property and its market value.

Issuance of a power of attorney

You can issue a power of attorney in Russia either through a notary or through the consulates of the Russian Federation in any country where you are located. Additionally, there is the option to send the necessary documents by mail to your trusted person. This person can then translate the document into Montenegrin and carry out the apostille procedure with an accredited translator.

Additional expenses when purchasing real estate

When purchasing property, it is important to consider a number of additional expenses. One of the key ones is the property transaction tax, which varies from 3% of the cadastral value of the property. Starting in 2024, a progressive tax scale will be applied to such transactions. The main provisions are as follows:

• Objects valued up to €150,000 are taxed at 3%.
• For properties in the range of €150,000 to €500,000, a fixed amount of €4,500 is set, plus 5% of the amount exceeding €150,000.
• For real estate valued over €500,000, a fixed amount of €22,000 must be paid, plus an additional 6% on the amount exceeding that sum.

It should be noted that the tax is applied only if the transaction involves an individual selling new or secondary housing.

Notary fees

The costs for notary services depend on the price of real estate and are determined according to the rates set by the Notary Chamber. The main rates are as follows:

• The cost is up to €5,000 — €705.
• For a price ranging from €1,000 to €20,000 — €120, including 21% VAT.
• For real estate priced between €20,000 and €40,000 — €170.

For exceeding the initial amount of €120,000, an additional €10 will be charged for every subsequent €15,000, and this also does not include VAT. Typically, the maximum compensation for the notary does not exceed €5,000. Additionally, the notary must pay a state fee for obtaining the certificate of ownership and registration in the cadastre, which is approximately €15.

The fee for a court translator

The fee for a court translator is set based on the rates approved by the Ministry of Justice of Montenegro. The main points are as follows:

• Oral translation during the signing of documents will cost €50 per hour.
• The written translation with an apostille costs €20 per page, and most contracts typically have between six to eight pages.

Realtor's commission

In the secondary real estate market, the average size of the realtor's commission is discussed even before the deal is finalized. In this case, a schedule of property viewings is created, which specifies the commissions associated with each one. If a property is valued between €100,000 and €300,000, the agent receives about 3% of its value; for cheaper options, the percentage is 4-5%, while for more expensive properties, it is around 2%. In the primary market, realtor commissions are sometimes paid directly by the developer.

Features of the real estate market in Montenegro

When talking about the real estate market in Montenegro, it is important to highlight its features related to the interests of foreign investors. The attractive climate, the possibility of hassle-free entry, the rapid development of tourist infrastructure, the country's aspiration for EU membership, and relatively low housing prices make the Montenegrin market particularly appealing to overseas buyers. In particular, Russians already make up more than 10% of the total population living in Montenegro.

Conclusion

The conclusion of our article is dedicated to the important aspects that foreigners need to consider when purchasing real estate in Montenegro. The market in this country can offer many opportunities, but it is essential to keep in mind the existing restrictions and obligations, which I have detailed in the previous sections.

It is important to note that while foreigners have the right to acquire almost any real estate, there are exceptions, such as agricultural land and plots in national parks. This warning indicates that preliminary research into the legislation and local regulations is a crucial step that should not be overlooked to avoid unexpected difficulties.

Possibility of obtaining a residence permit

Furthermore, according to the latest changes in the law, investments in real estate can open doors to obtaining a residence permit, which further highlights Montenegro's appeal to foreign buyers. However, it is important to remember that this type of residence permit has its conditions and does not allow for employment.

Additional expenses

It's important not to forget about the additional expenses associated with property ownership. Moreover, taxes and fees vary depending on the type of property and its location. I emphasized the need for careful budget planning to avoid unpleasant surprises in the future.

Real estate search

Searching for real estate is a qualitatively new stage that can be approached in various ways, starting from doing it yourself to consulting specialists. The market offers a variety of properties for different budgets, and it is important to carefully consider the example of a professional realtor who can facilitate the process and help avoid potential risks.

Results

In conclusion, despite potential challenges, buying property in Montenegro is a real opportunity to improve your quality of life, invest in the future, or even create a home for your family. I hope this article has been helpful and provides you with all the necessary knowledge for a successful transaction in Montenegro. Happy travels and successful purchases!