Guide to Buying Real Estate in Montenegro: Step-by-Step Instructions with Examples and Case Studies

Montenegro has become one of the most attractive destinations for real estate purchases among foreigners, including those from CIS countries, in recent years. The mild climate, picturesque mountains, Adriatic Sea coastline, relatively low prices by European standards, and the possibility of obtaining a residence permit (Visa on Arrival) based on property ownership make Montenegro’s real estate market increasingly popular. However, before proceeding with a purchase, it is essential to thoroughly understand the procedure, legal nuances, and practical steps. This guide will help you navigate through all the stages and avoid common mistakes.

1. Defining Goals and Budget

1.1. Formulating a General Strategy

The first step is to clearly define the purpose of the purchase. Why are you looking for real estate in Montenegro?

• Investment and subsequent rental: In this case, it is important to analyze the rental demand in the chosen region (primarily coastal areas such as Budva, Kotor, Tivat, Bar).
• Relocation for permanent residence: If you plan to live permanently, pay attention not only to the cost of properties but also to the development of infrastructure: shops, schools, hospitals, and transportation.
• Purchasing a country house for vacation: Scenic views, proximity to the sea, and a relatively peaceful environment will be important.

1.2. Determining the Budget

It is necessary to consider not only the cost of the property itself but also additional expenses:

• Property purchase tax (3-6% of the cadastral value for secondary real estate; for purchases from developers, a different system related to VAT may apply).
• Realtor fees.
• Notary fees (depending on the contract value).
• Translation costs (if necessary; official documents must be signed with the participation of a certified translator if you do not speak Serbian/Montenegrin).

2. Searching for Real Estate and Working with Realtors

2.1. Main Sources for Search

• Specialized websites (local Montenegrin portals and international platforms).
• Real estate agencies (when choosing an agency, pay attention to client reviews. Starting from the end of 2025, also consider the presence of a real estate activity license, which will become mandatory for agencies in Montenegro).
• Word of mouth and acquaintances (in small towns and villages, interesting options can often be found through locals).
• Our recommendation is the professional real estate agency MD Realty.

2.2. Choosing a Realtor

• Reputation: Check reviews and look for information about the company online.
• Professionalism: Inquire about experience and the presence of a real estate activity license.
• Language barrier: It is preferable for the agent to speak Russian or English if you do not speak Montenegrin.

2.3. Preliminary Selection of Properties

It is recommended to create a list of several options. For each, it is important to check:

• Location and infrastructure: how convenient it is to reach the nearest shops, hospitals, schools; parking situation.
• Property condition: secondary market or new construction; condition of utilities (water, electricity, sewage, internet).
• Legal status of the property: whether there are any encumbrances, if the area matches official documents, and if there are any issues with the land (especially for houses with plots) or outstanding utility bills.

3. Legal Verification

3.1. Document Verification

This stage is crucial to avoid purchasing a property with hidden issues. You can verify property documents through specialized services like Goodroom or consult with an agency—many employ qualified lawyers who can help you understand the documentation and avoid potential risks. If in doubt, you can also find an independent lawyer for a professional opinion.

• List Nepokretnosti (Property List): Similar to a property registry extract. It contains information about the owner, property characteristics, and any encumbrances (mortgage, seizure, etc.).
  https://ekatastar.me/ekatastar-web/action/login — Official website of the State Land Registry.
  https://app.goodroom.me/ — Official website of the Goodroom service.
  
  
• Project documentation (for new constructions): Ensure all construction and commissioning permits are in place.
• Usage Permit (Upotrebna dozvola): Confirms that the property complies with construction norms and is approved for use.

3.2. Special Attention to Land Plots

Montenegro has certain restrictions on land purchases. Foreigners can usually buy land if it is categorized as private property and is not located in a protected area (national parks, military zones, etc.). In some cases, additional approvals may be required.

Case Study: Alexander wanted to buy a plot for building a house near Kotor. During the legal verification, it was discovered that the plot was near a historical monument and subject to certain urban planning restrictions. Thanks to timely verification, he avoided a costly mistake.

4. Agreement and Deposit

4.1. Agreement (Sporazum)

Once you find a suitable property and agree on the price with the seller, a preliminary contract is drawn up. It includes:

• Transaction price.
• Timeline for concluding the main (final) contract.
• Deposit terms.
• Conditions for canceling the deal (including deposit refund or forfeiture).

Typically, a deposit of €5,000 to 10% of the property value is required.

5. Final Contract and Notarization

5.1. Preparation for Signing

Once all documents are verified, the parties proceed to sign the main contract (Ugovor o kupoprodaji). The signing takes place at a notary in the presence of:

• The seller (or their authorized representative with a notarized power of attorney).
• The buyer (or their authorized representative).
• A translator (if the buyer does not speak Montenegrin).

5.2. Identity and Data Verification

The notary verifies all documents, IDs of the parties, translates, and explains the contract terms. If there are no objections, the parties sign the contract.

5.3. Notary Fees

In Montenegro, notary fees depend on the property value (amount in the contract). Typically, the fee ranges from 0.1% to 0.5% of the transaction amount. The exact figure should be clarified in advance.

Case Study: Irina planned to buy an apartment for €80,000. The notary fee was around €300–400. Additionally, she had to pay for a translator (approximately €50–100, depending on the text complexity).

6. Payment Options for Real Estate

When buying real estate in Montenegro, several payment options are available, each with its own features:

1. Bank Transfer: The buyer can transfer funds to the seller’s account using the details specified in the contract. This is usually done through international banking systems like SWIFT or SEPA. Ensure the details match the seller’s official data and keep payment documents for proof.
2. Notary Deposit (Escrow Account): Some transactions go through a notary deposit (Escrow account), where funds are first transferred to the notary’s special account and then released to the seller only after all contract conditions are met. This protects both parties and ensures a secure transaction.
3. Cash Payment: If both the buyer and seller are individuals, cash payment is possible, either in Montenegro or abroad. However, this method requires caution due to potential legal issues regarding the origin of funds and tax declarations.

Before choosing a payment method, consult a lawyer to avoid risks and comply with local laws. Key risks include delays or blocks in international transfers, additional bank fees, inability to recover funds in case of erroneous transfers, and issues with confirming the source of income for large transactions. For cash payments, consider legal restrictions and potential tax authority inquiries.

7. Tax and Fee Payments

7.1. Property Transfer Tax

Montenegro currently has a progressive property transfer tax rate for secondary real estate:

• 3% for properties up to €150,000.
• 5% for properties between €150,000 and €500,000.
• 6% for properties over €500,000.

If purchasing from a developer who issues an invoice with VAT, the property is not subject to an additional transfer tax, as VAT is already included.

7.2. Payment Deadlines

After signing the final contract, the tax must be paid within 15 days (the deadline may vary, but 15 days is typically specified in the notification).

7.3. Penalties

Failure to pay taxes on time may result in penalties and fines. To avoid issues, monitor this process with your lawyer or agent.

8. Registering Property Rights in the Cadastre

8.1. Submitting Documents

After signing and notarizing the contract and paying the tax, you must submit an application to the cadastral office (katastar) to register the property transfer. The following documents are usually required:

• Notarized purchase agreement.
• Tax payment receipt.
• Application for cadastral changes.

In Montenegro, the notary usually handles the document submission.

8.2. Processing Time

The process can take from a few weeks to several months, but it is usually completed within 15–30 days. However, in some regions, such as Budva, registration may take up to a year. In some cases, the process can be expedited if necessary. Upon completion, you will receive an updated List Nepokretnosti with you listed as the owner.

9. Obtaining a Residence Permit (Visa on Arrival) Based on Real Estate

9.1. General Procedure

Purchasing real estate in Montenegro grants the right to obtain a residence permit (Visa on Arrival), but this process requires submitting documents to local authorities (MUP—Ministry of Internal Affairs of Montenegro).

The procedure typically includes the following steps:

• Prepare necessary documents:
  • Valid passport.
  • Criminal record certificate with an apostille.
  • Property ownership document (List Nepokretnosti).
  • Proof of financial means (€3,650 in a Montenegrin bank account).
• Register with the tourist inspection.
• Submit the application to the local police station (MUP).
• Pay fees: state duty and administrative charges.

Note: Depending on your citizenship, some documents may require an apostille.

9.2. Residence Permit Validity

A residence permit obtained through real estate purchase is usually issued for one year with the possibility of renewal. After five years of residence in Montenegro, property owners can apply for permanent residence (PR), but they must meet several conditions:

• Continuous residence in the country for at least nine months per year.
• Valid residence permit at the time of PR application.
• Financial stability and no tax or fee arrears.
• No serious legal violations, including migration rules.

The PR application process takes several months, after which the applicant receives the corresponding status.

Case Study: Ivan and Marina bought an apartment in Budva for €120,000 and decided to apply for a residence permit. After registering the property, they submitted documents to MUP. A few weeks later, they received a one-year residence permit with the possibility of annual renewal, provided they maintained ownership and met residency requirements.

10. Special Considerations for Non-Residents

10.1. Restrictions on Agricultural Land Purchases

Montenegrin law restricts the sale of certain lands to foreigners. Sometimes, creating a legal entity (registering a company in Montenegro) is necessary to purchase, for example, a large plot for construction or business purposes.

10.2. Maritime Zones (Morsko dobro) and Coastal Lands

Montenegro’s coastline is considered a strategically important area. Additional restrictions and rules may apply, especially in zones with marinas, ports, and beach areas.

10.3. Verifying Permits for New Constructions

If buying from a developer, ensure they have all necessary permits and that the project complies with the approved plan (DUP). Cases of developers delivering properties with deviations from the plan are not uncommon, which can lead to future encumbrances.

11. Common Mistakes and Pitfalls

• Choosing an unqualified agency: Working with an agency lacking sufficient competence, legal knowledge, and a mandatory real estate activity license can lead to problems at all stages of the transaction.
• Missing tax payment deadlines: Delays in tax payments can result in penalties and additional financial costs.
• Dealing with unverified developers: Cases of construction without necessary permits, especially for private homes, are not uncommon in Montenegro. Some developers with questionable reputations may compromise construction quality, leading to significant issues later.
• Understating the contract price: Some sellers suggest indicating a lower price in the contract to reduce tax payments. However, this can cause complications in the future, such as increased taxable base during resale and additional financial risks.

12. Practical Tips and Recommendations

• Choose a promising area: If considering real estate as an investment, study price trends and rental demand. Popular investment locations include Budva, Kotor, Tivat, and Podgorica.
• Consider seasonality: Montenegro’s tourist season runs from May to September, with rental demand significantly dropping in winter. If planning to earn rental income, factor this into your property choice.
• Check infrastructure: In some coastal areas, water supply issues may arise during summer. Ensure your chosen area has the necessary amenities.

13. Conclusion

Buying real estate in Montenegro is not only a profitable investment but also an opportunity to change your lifestyle, enjoying a mild climate, picturesque nature, and stable European legislation. The country offers a relatively straightforward property registration process for foreigners, but to avoid potential risks, it is crucial to approach the transaction thoughtfully and carefully.

Key Points:

• Define your purchase purpose and set a realistic budget.
• Choose a reliable agency or realtor.
• Study Montenegrin legal restrictions and specifics for foreigners.
• Conduct thorough legal verification of the property.
• Prepare and sign a preliminary agreement with a deposit.
• Finalize the main contract at a notary, pay taxes, and register property rights.
• If necessary, consider applying for a residence permit.

By following these recommendations, you can successfully purchase real estate in Montenegro, avoid common mistakes, and enjoy the comfort of your own home on the Adriatic coast.