House - $3,549,000
House - $7,489,350
House - $3,966,287
House - $5,864,532
Montenegro: Overview
Last Updated:
Apr 30, 2008
Post-independence
property boom in Montenegro
property boom in Montenegro
Two years after independence in 2006, Montenegro is in a midst of real estate boom.
Driven mainly by Russian and British buyers, real estate agents report price increases of more than 20% annually over the past two years.
Foreign investors are drawn to the Adriatic coastal areas, particularly the towns of Sveti Stefan and Budva. Some agents report that prices of coastal properties doubled within a year or two.
Government statistics show that out of the €900 million Foreign Direct Investment (FDI) Montenegro received in 2007, more than half went to real estate acquisition.
* Land titles can be problematic (especially property expropriated by the Tito regime from 1945 to 1980);
* Infrastructure is poor (swimming pools may lack water);
* Financing is difficult (most transactions are still done in cash and paid in full).
There are no restrictions on foreigners buying property, except for land, which can only purchased by foreigners through a company. After a building is constructed, ownership can be transferred to individuals through a simple procedure.
However, several politicians are concerned that foreigners are buying too many properties. A proposed law on the removal of restrictions on foreign ownership of property was withdrawn.
Foreign-ownership of property is also expected to be a thorny issue when Montenegro applies for EU membership.
Driven mainly by Russian and British buyers, real estate agents report price increases of more than 20% annually over the past two years.
Foreign investors are drawn to the Adriatic coastal areas, particularly the towns of Sveti Stefan and Budva. Some agents report that prices of coastal properties doubled within a year or two.
Government statistics show that out of the €900 million Foreign Direct Investment (FDI) Montenegro received in 2007, more than half went to real estate acquisition.
* Land titles can be problematic (especially property expropriated by the Tito regime from 1945 to 1980);
* Infrastructure is poor (swimming pools may lack water);
* Financing is difficult (most transactions are still done in cash and paid in full).
There are no restrictions on foreigners buying property, except for land, which can only purchased by foreigners through a company. After a building is constructed, ownership can be transferred to individuals through a simple procedure.
However, several politicians are concerned that foreigners are buying too many properties. A proposed law on the removal of restrictions on foreign ownership of property was withdrawn.
Foreign-ownership of property is also expected to be a thorny issue when Montenegro applies for EU membership.
RENTAL YIELDS
Last Updated: Sep 29, 2009
Prices in Montenegro are quite high, although they seem to have fallen over the past year. Buying prices for coastal houses average around €2,870 per square metre, or around €266 per square foot.
We are unable to give yields figures, because lets tend to be seasonal, and there is no basis for long-term yields calculations.
We are unable to give yields figures, because lets tend to be seasonal, and there is no basis for long-term yields calculations.
TAXES AND COSTS
Last Updated: Nov 19, 2008
Rental Income: Rental income is taxed at a flat rate of 15%, with an optional lump-sum deduction of 40% in lieu of actual costs.
Capital Gains: There are no capital gains taxes.
Inheritance: Inheritance of first degree relatives (spouses and direct descendants) is not taxed. Other heirs are liable to pay 2% tax on their share of the estate.
Residents: Residents are taxed on their worldwide income.
Capital Gains: There are no capital gains taxes.
Inheritance: Inheritance of first degree relatives (spouses and direct descendants) is not taxed. Other heirs are liable to pay 2% tax on their share of the estate.
Residents: Residents are taxed on their worldwide income.
BUYING GUIDE
Last Updated: Apr 30, 2008
Roundtrip transaction costs, i.e., the total cost of buying and selling a property, are around 6% – 8.75% of the property value. The buyer pays the transfer tax of about 3%. The agent’s commission ranges from 3% to 5%, usually paid by the seller.The transaction cost on newly built property is much higher because 17% VAT is levied instead of the transfer tax.
LANDLORD AND TENANT
Last Updated: Jan 01, 1970
Tenancy laws
Research is ongoing.
ECONOMIC GROWTH
Last Updated: Apr 30, 2008
High hopes after independence
Montenegro (pop. 650,000) became independent in 2006, after 55% of voters opted for the dissolution of the Union of Serbia and Montenegro in a referendum. This followed a long but peaceful struggle.Pro-independence Prime Minister Milo Djukanovic argued that association with Serbia hindered Montenegro from achieving its full potential. He hopes that his country will succeed in joining the EU before Serbia and Macedonia. Montenegro adopted the Euro as the official currency well before independence.
Djukanovic’s party won the first post-independence election, held in September 2006. He decided to retire in October that year after being president or prime minister since 1991. He was prime minister once more in February 2008 after his successor resigned.
His government has its hands full. Although the economy expanded by 7.5% in 2007, Montenegro is still one of the poorest countries in Europe with GDP per capita of just around US$3,800. The economy is expected to grow by 7.2% in 2008.
Unemployment was around 14.7% in 2007. Corruption, organized crime and the huge black market are other major issues that must be resolved.
