Is it worth buying real estate in Montenegro in 2024? Where can I find cheap apartments in the country? What are the rules for buying a home in Montenegro? Valeria Ursul, CEO of CRASSULA Estate real estate agency in Montenegro, told us about this, as well as about upcoming changes in the market, prices, and earning opportunities.

“Real estate on the coast is considered to be the most expensive in the country.”

— Montenegro will introduce a progressive tax on real estate turnover from the beginning of 2024. What does this mean, and how exactly will it affect the market and buyers?

Valeria Ursul, CEO of CRASSULA Estate real estate agency— As of January 1, 2024, a new law on tax on the purchase of secondary real estate will come into force in Montenegro:

  • 1. Properties up to €150,000 are subject to the previous 3% tax.
  • 2. From €150,001 to €500,000, subject to a flat tax of €4500 + 5% of the amount exceeding €150,000.
  • 3. From €500,001 and above, subject to a flat tax of €22,000 + 6% of the full value of the property.

Until January 1, 2024, the old 3% tax applies, regardless of the value of the real estate. It should also be noted that investments in new buildings are not subject to additional taxation since the seller is a legal entity (VAT payer). Thus, changes in the legislation of Montenegro affect only the purchase of real estate by individuals.

— What objects attract residents and investors? And in which regions of the country is there the greatest demand?

— Over the past two years, there has been significant movement in the real estate market in Montenegro, and buyers had different motives for purchase. Currently, the situation is returning to the original trends—locals and residents of the Balkan region mainly invest their money in small apartments for subsequent rent, while foreign investors prefer hotels, villas, residences, and new luxury tourist areas with a high percentage of return on investment (ROI). 

The greatest demand is observed in the so-called “golden triangle”, which includes Tivat, Kotor, and Budva.  The last year has also seen the active development of the Kolašin ski resort in the north of Montenegro. Large hotels with developed infrastructure, elevators, and ski slopes are being built here. This direction is attractive for investors, as the region has great potential.  

There are also discussions about revitalizing the airport in the north of Montenegro, which stopped operating 50 years ago. This move could make it the third international airport in the country.

— What is the situation with real estate prices in different regions of Montenegro at the moment? And how have these figures changed in recent years? 

— Since 2019, real estate prices in Montenegro have increased by up to 40%. 

The cost per square meter is diverse; it ranges from minimum values for secondary housing in old houses on the outskirts to maximum values for fully equipped apartments in hotels on the first line of the coast. Some examples: 

  • Budva Riviera: from €1700 to €6000 per “square”. 
  • Tivat: from €2300 to €7000. 
  • Kotor: from €1900 to €7000. 
  • Bar Riviera: from €1400 to €4000. 

— Where is the most affordable and the most expensive real estate in Montenegro, and what factors influence this situation? 

— Tourism is the main source of income for Montenegro, so real estate on the coast is considered the most expensive in the country. This is especially true for new tourist centers such as Porto Montenegro, Luštica Bay, and Portonovi, which have their own marinas and developed infrastructure. Nevertheless, new projects are constantly emerging, providing opportunities for profitable investments. 

There are also development prospects in the north of Montenegro, especially in the ski resort area. Here, the construction of large projects in Kolašin continues, and the advertising campaign for the region is being actively promoted. 

The most affordable real estate in Montenegro is located away from tourist routes. For example, prices per square meter in Bar opština are lower because of the lower flow of tourists.

“Montenegrin banks do not provide loans to non-residents.”

— How can a foreigner buy real estate in Montenegro? What does this process look like?

— Investing in real estate in Montenegro for foreigners is a fairly simple and transparent process. The documents required only the provision of a foreign passport and the availability of funds in an account in any country. 

Before making a purchase, you should make sure that there are no encumbrances on the property, that the seller's title is correct, and that there are no errors in the documents. The notary will check this before signing the contract within one or two days based on the property certificate (list nepokretnosti) provided by the seller. The document contains information about the property (type of property, location, area, information about the owner, cadastral number) and records of encumbrances and restrictions. The seller's ownership of the property can be checked independently on the website of the cadastral office.

When signing the contract, the buyer must have a foreign passport, and the seller must provide the following documents:

  • Passport.
  • Original documents for the real estate.
  • Spouse's consent to the sale, if the seller is married, or a certificate that he or she is not married.
  • A statement from the tax office that there are no tax debts, including the year of sale.
  • Receipts for payment of utility bills.

The contract between the buyer and the seller, whether preliminary (predugovor) or main (ugovor), is signed in the presence of a notary. A preliminary contract is concluded at the request of one of the parties or when purchasing a building under construction.

Payment is made by bank transfer to the account of the seller or the notary.

Registration of the title of ownership (a sheet of non-proprietary with the name of the buyer) usually takes from 1 to 3 months. During this time, the client can use the property, but to obtain a residence permit, the client must have a sheet of non-possession in hand.

To obtain a residence permit.

A transfer of funds is allowed from an account opened in a bank in any country, subject to the laws of Montenegro.

Important Notes:

  • Foreign citizens have the right to purchase residential and commercial real estate in Montenegro. The exception is land plots with an area of more than 5 thousand square meters with objects on them.
  • Acquisition of land plots without buildings is possible only if the plot is included in a detailed urbanization plan.
  • Foreign investors can apply for a residence permit in Montenegro (with the right to extend) for the purchase of any real estate. However, the right to a residence permit is canceled when the property is sold.
  • The contract (preliminary and final) is drawn up and notarized only on the territory of Montenegro in the presence of both parties or their representatives, a notarized power of attorney, and a translator.
  • When purchasing secondary real estate, the buyer must pay a tax of 3% of the price of the object specified in the contract of sale.
  • Remote registration of the transaction is possible with the use of a notarized power of attorney.
  • Montenegrin's banks do not provide loans to non-residents.

— Which foreigners buy real estate in Montenegro most often? 

— Among the top 10 foreign investors in Montenegro are the following nationalities: Turks, Russians, Serbs, Germans, Ukrainians, Swiss, British, Americans, Croatians, and UAE nationals. 

In the first half of 2023, the inflow of foreign investments in Montenegro amounted to 569.61 million euros. More than half of this amount was invested in real estate, namely 296.81 million euros.

For comparison, here is the data on foreign investment in real estate for previous years: 

  • 2022: €435 million. 
  • 2021: €278 million. 
  • 2020: €116 million. 
  • 2019: €178 million. 
  • 2018: €182 million.

“Foreigners can get Montenegro residence permits upon purchase of real estate.”

— How should a foreigner choose an apartment for investment? How much can you earn on real estate in the country, and what are the ways to do this? 

— Earnings on real estate are typically associated with renting out apartments. For successful investments, it is important to pay attention to the areas where new projects for the construction of hotels and tourist complexes are actively developing. The highest percentage of return on investment (ROI) is often achieved in large complexes that invest in marketing and promotion of their brand. Such complexes can guarantee an ROI of 10%. 

When choosing real estate for investment, it is also worth paying attention to promising areas that may become popular in the future. Naturally, there is a risk, as it is impossible to predict exactly how quickly these areas will become popular with tourists. 

Another option for real estate investment is to buy apartments in dormitory areas for long-term rent. Currently, the cost of a month's rent for a one-bedroom apartment on the coast starts at 500 euros.

— Which cities are worth investing in, and why? 

— Tivat, Kotor and Budva are the golden triangle and each city is different from the other. These three destinations have long been popular with tourists. 

Small towns on the coast of Boka Kotor Bay, such as Prčanj, Stoliv, Risan, Morinj, Dobrota, Orahovac, and others, attract lovers of quiet vacations, relaxation, and solitude with nature. 

Large premium complexes such as Potro Montenegro, Luštica Bay, and PortoNovi are also very popular. In addition, ski tourism is actively developing in Kolasin. 

Bar and Ulcinj, with the longest sandy coastline, are still the most accessible for investment among the coastal towns. 

The common reason for investment in all these places is tourism, but the style of vacation in each of these cities is different.

— What makes the Montenegrin market attractive to investors?

— Let's take a look at a few advantages of Montenegro:

  • The local currency in Montenegro is the euro.
  • Foreigners can obtain a residence permit upon the purchase of real estate.
  • It is also possible to formalize the ownership of two persons, which allows each of the owners to obtain a residence permit.
  • Most locals speak English and Russian.
  • In 2025, Montenegro may become a member of the European Union.
  • Investments in new buildings are not taxed. If the seller is a legal entity (VAT payer), the buyer is exempt from additional taxation.
  • The tourist destination is actively developing with the expansion of infrastructure and the construction of new roads.
  • Montenegro provides loyal conditions for the business and residence of foreigners, who constitute the main source of the country's income.
  • The country has a liberal economic regime for foreign trade.
  • Favorable tax policy.
  • Convenient geographical location and natural riches.

These advantages make Montenegro an attractive place for life, investment, and tourism.

— What, based on the current market position, can be expected in the future, in your opinion? 

— We are convinced that the real estate market in Montenegro will continue to develop. In the next two years, the construction of large hotel complexes will be completed both on the coast and in the north of Montenegro. The government of the country has chosen a tourism development strategy aimed at attracting tourists both in summer to the Adriatic coast and in winter to ski resorts. 

The infrastructure of the state is also being actively developed. The construction of the Podgorica-Kolašin autobahn continues, and the extension of the Jaz-Tivat road is being implemented. The cable car to Mount Lovcen has already started functioning, and new air routes are being opened. In addition, huge passenger lines regularly come to Kotor's pier. 

Montenegro has experienced significant changes in the last few years, and this is just the beginning. We expect the development to continue and intensify.