Buying a property fees and taxes
The Notary service in Montenegro was established in 2005, in order to increase the level of protection of legal transactions. This was particularly important for real estate sector, which was further standardised and made safer with introduction of notaries.
The notary fees are uniformly regulated, which means that tariffs and fees are decided by the very Notaries Chamber of Montenegro. Thus, each notary will present you with the same fees for the same job.
While often you will be offered to go to the certain notary, be aware that you have the right to choose your notary.
Standard notarial fees
For properties valued in excess of Euro 120,000 a fee of Euro 10.00 on every Euro 15,000 increase is charged. The maximum Notary fee chargeable is Euro 5,000.00.
Translation of the Power of Attorney & Contract
Translation of these documents is done by a certified court or certified translator. The average price per page is approximately €20, depending on the number of characters per page. A standard contract is usually written on five (5) pages.
Any additional changes to the contract requested by the buyer are also chargeable. Usually translation costs in total amount to approximately Euro 100.00 – Euro 200.00
Cadastre taxes and Fees
Cadastre taxes are Euro 15.00 on average.
Estate Agents Fees
Estate agents’ fees are between 3 and 5 % of the property’s selling price and are payable by the Vendor. In Montenegro, there is no commission charged to buyer, if not specifically agreed between the agent and buyer.
Real Estate Transfer Tax (RETT)
When purchasing a second hand property directly from the owner, the Real Estate Transfer Tax is set at 3% of the value of the property and it is payable by the buyer.
The value of the property is determined by the Local Municipality Tax Authority and is usually equivalent to the price stipulated in the sales contract.
Once the Final Purchase and Sales Contract is signed, the buyer is obliged to make a payment of the RETT in the amount of 3% of the purchase price within 15 days from the signing of the contract. The Tax Authority then establishes if the purchase price is in accordance with the market value of the property. If the Tax Authority estimates the market value of the property to be higher than the one stated in the Purchase Contract, the buyer will receive an invoice from the Tax Authority for the difference in the amount of RETT.
When the client is purchasing a new property directly from a Developer who is a VAT paying legal entity, the buyer will be exempt from RETT on the full sales price. Your lawyer will ensure that this is stated in your contract.
Thereby, if you are buying such a property directly from a developer, through your company (instead on your personal name), you are eligible for VAT return in amount of the VAT on property (minus, value of the land and communal taxes).