The Real Cost of Buying a Property in Montenegro

If you are thinking about buying property in Montenegro, the natural question is: “What does it actually cost once everything is added up?” For a typical resale flat, you should allow roughly 4–5% above the agreed purchase price for one‑off buying costs.

On a €150,000 apartment, that means realistically setting aside around €6,000–€7,500 extra, so a total budget in the region of €156,000–€157,500.

That extra money disappears into transfer tax, legal fees, notary, translation, registration and the joy of moving large sums through the banking system. None of the items is especially exotic, but several of them are easy to underestimate if you are used to a different legal system.

Figures below are based on 2025 data from property and tax guides by Omnia Capital Group, Immigrant Invest, Investropa and Tranio. Podgorica is used as the main example, but the tax rules themselves apply across Montenegro, with only some local variations in annual property tax and municipal surcharges.

How the Numbers Work in Practice: A Podgorica Example

To keep things concrete, imagine you are buying a €150,000 resale flat in Podgorica. It could just as easily be in Budva, Nikšić or Bar from a tax point of view, but Podgorica makes a good, “normal” example: no sea view premiums, no hyper‑tourist zoning, just a capital‑city market.

On paper, the price is €150,000. In reality, once you add transfer tax and professional and registration costs, you land around that 4–5% extra mark if the deal is straightforward and you are not insisting on the most expensive advisers in the country. Go up to €200,000 or €220,000, and the same tax rules apply; the absolute numbers rise, but the percentage of the price often stays in the same rough band.

The key thing to understand is that Montenegro’s purchase‑cost structure is largely standardised. There are local differences in annual property tax rates and practical variations in professional fees, but you do not have a different national tax regime just because the flat is in Podgorica rather than on the coast.

Transfer Tax on Resale Properties: The Big One‑Off Charge

For resale properties anywhere in Montenegro, the main one‑off tax is the real estate transfer tax. This now follows a progressive structure:

• Up to €150,000, the tax is 3% of the agreed price.
• From €150,000 to €500,000, it is €4,500 plus 5% of the part above €150,000.
• Above €500,000, it is €22,000 plus 6% of the part above €500,000.

So that €150,000 Podgorica flat gives you a clean, textbook calculation: 3% of €150,000 is €4,500.

If you were buying a €220,000 flat in Budva or Kotor instead, the formula would behave the same way. The first €150,000 is taxed at 3% (€4,500). The remaining €70,000 is taxed at 5% (€3,500). Total transfer tax: €8,000.

In all municipalities, you normally have 15 days from signing the sale contract to file the tax return and pay. Miss that, and you start accumulating interest at about 0.03% per day on the unpaid amount. That is the same whether the property is in Podgorica, on the coast or in the north.

For a typical resale flat anywhere in Montenegro’s mid‑market, once you combine this transfer tax with legal, notary, translation, registration and banking costs, the whole package landing around 4–5% of the purchase price is a realistic planning figure.

New Build vs Resale: VAT Instead of Transfer Tax

The big structural split in Montenegro is not capital vs coast, but new build vs resale.

If you buy a newly built property directly from a developer as the first owner, that initial sale is normally subject to 21% VAT instead of the real estate transfer tax. Buyers do not pay the transfer tax on that first sale.

In practice, developers across Montenegro almost always advertise VAT‑inclusive prices. Whether you are looking at a new unit in Podgorica, a fresh block in Bar or a seafront development in Tivat, the headline figure typically already has that 21% VAT baked into it.

The law does not force every advert to display the VAT split, though, so the sensible approach is:

• Assume the stated price already includes VAT on a developer’s first sale.
• Still have your lawyer obtain written confirmation that the price is VAT‑inclusive.

On that basis, if you buy a €180,000 new build directly from a developer, whether in Podgorica or on the coast:

• You are not adding a 3–6% transfer tax on top of that figure.
• You are still paying the other one‑off costs: lawyer, notary, translation, registration and bank fees.

If that same flat is then resold later, it drops out of the VAT world and into the progressive transfer tax regime described above, like any other resale property.

Legal, Notary, Translation and Registration Costs

The professional and administrative costs look very similar in most of Montenegro. The Podgorica example works well here, but the patterns hold for coastal and inland towns too.

A local property lawyer is strongly recommended. On a normal, clean purchase, fee quotes often start around €1,200 and usually land somewhere between €1,500 and €2,000, rising towards or above €3,000 for complex situations. That is the case whether you are buying in the capital, a coastal resort, or a provincial town; the exact amount depends more on the lawyer, the deal and the complexity than on the city.

For a relatively straightforward €150,000 flat, budgeting €1,500 for legal work is sensible. In return, your lawyer will:

• Check the land registry to confirm legal ownership and identify any mortgages, disputes or encumbrances.
• Confirm planning and zoning status and look for obvious legal risks.
• Draft or review the sale contract under Montenegrin law.
• Structure the payment schedule and ensure timely registration of ownership.

Notary fees are governed by a national tariff. For a €100,000 transaction, typical examples show something like €350 plus 21% VAT, with the fee increasing moderately as the value rises and capped at around €5,000. On a €150,000 deal, wherever it is in Montenegro, a notary bill of roughly €400–€450, including VAT, is a reasonable assumption.

If you do not speak Montenegrin, you will need a sworn translator for signing. Across the country, written translations of contracts commonly cost around €20 per page, and spoken interpretation about €50 per hour. One standard purchase usually ends up in the €100–€150 range for translation services, whether you are signing in Podgorica or on the coast.

Registration costs are slightly more nuanced. The law refers to a 0.5% of cadastral value fee in certain registration situations. The cadastral value does not always equal the price you pay; it can be lower or higher. In day‑to‑day practice, many buyers and advisers report total registration and miscellaneous administrative costs somewhere around €100–€300 for a typical flat, with €200–€250 being a perfectly sensible planning figure for a mid‑market unit in Podgorica or a similar city.

On higher‑value or more accurately valued properties, the 0.5% rule can lift those costs above the cheerful €200 mark, which is why it is good to treat the low‑hundreds estimates as guidance rather than a guaranteed cap.

Add these elements together — legal, notary, translation and registration —, and you can see how a couple of thousand euros of your “extra” budget disappears quite legitimately before you even think about furniture.

The 10% Deposit (Kapara) and Payment Structure

Montenegro’s approach to deposits on property purchases is standard civil‑law fare and applies throughout the country.

Most deals are structured around a deposit — often about 10% of the agreed price — paid when the sale contract is signed. This is treated as “kapara”, or earnest money, with clear consequences:

• If the buyer backs out without contractual justification, they lose the deposit.
• If the seller defaults without justification, they must normally return double the deposit to the buyer.

So, on a €150,000 property, whether in Podgorica, Bar or Kotor, a common pattern is a €15,000 deposit at the contract stage and €135,000 on completion. If you walk away because you simply change your mind, that €15,000 is gone. If the seller breaks the deal, it is designed to be painful for them instead.

Crucially, the deposit is not an extra fee. It is part of the price, so the final payment is the remaining 90%, not an additional full amount.

Banking, FX and Moving Your Money into Montenegro

Montenegro uses the euro as legal tender even though it is not in the EU. That keeps things simpler once your funds are actually in the country, but does not automatically protect you from the joys of international banking charges and FX spreads.

If you are sending money from a non-Euro account, you generally face:

• An explicit transfer fee.
• A less visible charge is hidden in the exchange rate.

Put together, those usually total about 0.25–1% of the amount sent if you use a competitive bank or specialist transfer service, and can creep up towards 1–1.5% if you pick something more expensive or do not shop around.

On €150,000, that means anything from a few hundred euros at the lean end up to more than €1,000 if your bank likes chunky FX margins. The pattern is the same regardless of where in Montenegro the property sits; the only difference is whether you are wiring into a Podgorica bank branch or a coastal one.

Most foreign owners open a local euro account in Montenegro to handle property‑related payments — utilities, building fees, local tax, and possibly rent — and to simplify any future sale.

Annual Property Tax and Ongoing Costs Across Montenegro

Once you own the place, annual costs depend a bit more on where it is located and how it is zoned.

For ordinary residential properties (flats and houses used as homes rather than hotels), most guidance puts annual property tax in a band of roughly 0.25–1% of the taxable value. Higher rates, which can go up towards about 5.5%, are reserved for certain hotel‑type properties and those in specific tourist zones, more common along the coast and in designated areas.

In a typical Podgorica residential zone, where tourism pressure is lower, a €150,000 flat might see an annual bill of roughly somewhere between €400 and €1,200. In some coastal municipalities with tourist zoning, a similar‑value unit used commercially might edge closer to the upper end of the normal residential band or into specialised categories, but ordinary residential flats and houses still tend to sit well below the maximum rates.

Podgorica has a municipal surtax on personal income tax for residents (15% of the base income tax), which is mirrored in Cetinje and is similar in concept to local add‑ons elsewhere in the country. If you become a tax resident and work locally, that affects your income tax, including on rental income. If you are a non‑resident and simply paying tax on rental income in Montenegro, you mainly see the national rate.

Common‑area building fees — essentially Montenegro’s HOA charges — are broadly similar across the country. A typical range is about 1–2 euros per square metre per month. That means a 70 m² flat in Podgorica, Budva, or Bar is likely to cost somewhere around €70–€140 per month in building fees, or €800–€1,600 per year, depending on services.

Utilities for a lived‑in flat of around 70–90 m² — electricity, water, heating/cooling, internet and waste collection — often fall in the region of €80–€150 per month across much of Montenegro, again depending more on usage and insulation than on the municipality’s name. Over a year, that yields a broad range of €1,000–€1,800.

Home insurance on a normal flat tends to cost around €100–€200 per year for standard cover, with higher premiums for large or high‑value properties and for broader policies.

Rental Income: Tax and Management

If you decide to rent your property out, the national rules kick in the same way whether the flat is in Podgorica or on the coast.

Rental income is taxed at a flat 15% rate. The law allows you either to deduct your real, documented rental expenses or to use a lump‑sum allowance. Current practice and guidance describe a 30% lump‑sum deduction option for long‑term rentals, which simplifies the maths.

As an example, imagine you own a flat that earns €800 per month in rent (€9,600 per year). If you apply the 30% lump‑sum deduction:

• You are taxed on 70% of that income, so €6,720.
• At 15%, the tax bill is €1,008 per year.

You will need to register the rental activity and follow local registration and reporting rules, which can vary slightly by municipality, but the tax rate and deduction structure are national.

Property management and key‑holding services work similarly wherever you are. Full‑service management of a long‑term rental often costs around 8–12% of gross rent. Lighter arrangements where someone checks the flat, holds keys and organises maintenance when needed might be priced as a fixed fee, often somewhere in the €500–€1,000 per year band for a typical flat.

Selling and Capital Gains Tax

When you eventually sell, capital gains tax is applied at the national level and does not depend on the municipality.

For individuals, Montenegro charges a flat 15% capital gains tax on real estate gains. In simple terms, the gain is the sale price minus your documented purchase price and the cost of documented improvements and selling expenses.

If you bought a property for €150,000, invested €10,000 in documented improvements, and later sold it for €200,000, your cost base would be €160,000. The taxable gain would be €40,000, and the capital gains tax at 15% would be €6,000.

The law also offers important exemptions, relevant whether the home is in Podgorica, Budva or anywhere else:

• If the property qualifies as your main residence and meets the conditions set out in the law, the gain can be exempt.
• Transfers between close family members — such as spouses, parents and children — can also be exempt from capital gains tax.

This is one area where the blog‑level explanation lines up closely with specialist commentary, and it is a major reason many people treat Montenegrin property as a long‑term, family‑held asset.

So, What Does This All Mean for a Buyer?

Across Montenegro, the pattern is broadly the same:

• On a resale property, progressive transfer tax of 3–6% is your main one‑off tax, with a realistic all‑in purchase‑cost figure of about 4–5% once you include legal, notary, translation, registration and banking.
• On a new build purchased directly from a developer, the first sale is normally subject to 21% VAT (almost always built into the price) instead of transfer tax.
• Annual property tax for ordinary residential property usually falls within a fraction-of-a-per-cent band, with higher rates reserved for particular tourist or hotel‑type uses.
• Rental income and capital gains are both taxed at 15%, with clear rules on deductions and exemptions.

Podgorica simply acts as a neat, middle‑of‑the‑road example: no coastal premiums, no extreme tourism zoning, just a capital city with a steady rental base and fairly predictable taxes. The same mechanisms, with minor local twists, apply right across the country.