Every tax you pay as a buyer and owner - purchase, annual, rental and sale - with the numbers first.
Updated 25 September 2026
Montenegro is a low-tax property market, but the low tax is four separate taxes landing at four different moments: when you buy, every year you own, when you rent it out, and when you sell. Each one below, at 2026 rates.
Resale property carries a progressive real estate transfer tax, paid by the buyer:
| Purchase price band | Transfer tax rate |
|---|---|
| Up to €150,000 | 3% |
| €150,000 to €500,000 | 5% on that band |
| Above €500,000 | 6% on that band |
On a €400,000 resale apartment that works out to €17,000 - €4,500 on the first band plus €12,500 on the second. Model your own number with the transfer tax calculator.
New-build from a developer carries no transfer tax at all. Instead the sale is subject to 21% VAT, which in practice is already inside the advertised price. What remains on a new-build is notary and registration of roughly €300 to €800 - total closing costs under 0.5% of the price.
Annual property tax is set by each municipality at 0.25% to 1% of market value for your main home, and 0.3% to 1.5% for a holiday home (any home that is not your registered residence), adjusted with corrective coefficients for location, age and use of the property. The coefficients often push the effective rate into the lower half of the range.
For a coastal apartment worth €250,000, a mid-range municipal rate produces an annual bill in the region of €600 to €1,200 - usually the smallest line in the cost of ownership, well below service charges in a managed resort.
Rental income is taxed at 15% of the taxable base, and the base is the rent less a standard cost deduction:
| Rental type | Standard deduction | Effective rate on gross rent |
|---|---|---|
| Long-term rental | 30% | 10.5% |
| Tourism rental, sojourn tax paid | 50% | 7.5% |
| Tourism rental via agency or local tourist organisation, average occupancy at least 60 days a year | 70% | 4.5% |
Worked example on €10,000 of gross annual rent: a long-term let pays €1,050; a registered tourism let through an agency at the 70% deduction pays €450. Registration and the sojourn tax are the difference between the first and last row.
Capital gains on property are taxed at 15% of the net gain. Two rules reduce the bill:
Indexation. The acquisition price is adjusted annually for retail price growth between purchase and sale (član 37d st. 4), so you are not taxed on pure inflation. Documented capital improvements and eligible transaction costs also come off the gain.
Main home exemption. There is no capital gains tax where the property was your only home and your registered residence in Montenegro, the prebivalište (član 37g). That rarely covers a foreign buyer with a second home on the coast.
Član 37g exempts three transfers completely. The first is the only-and-main-home case above. The other two matter to owners rather than to buyers.
Between spouses, on marriage, divorce or inheritance. A transfer between husband and wife directly connected to the marriage, to a divorce settlement or to inheritance carries no capital gains tax.
A gift to a first-order heir. In Montenegro that means your children and your spouse (Zakon o nasljeđivanju, član 11). Giving an apartment to a child sits outside capital gains tax entirely.
Transfer tax follows the same logic. Član 14 of the transfer tax law exempts a first-order heir, the spouse and the parent of the deceased, and on a gift the recipient in the first order and the donor's spouse. Both sets of exemptions sit in short articles with no detail on how they are claimed, so have an accountant confirm your case before you rely on one.
Companies do not pay a separate capital gains tax: gains are part of corporate profit and taxed under the progressive corporate income tax of 9% to 15%.
Closing costs, the step-by-step legal process, bank accounts and buying remotely: Buying Property in Montenegro - the full guide >
0.25% to 1% of market value for your main home, and 0.3% to 1.5% for a holiday home (any home that is not your registered residence). Set by each municipality and adjusted with corrective coefficients.
On resale, yes - progressive 3% / 5% / 6% by price band. On new-build, no transfer tax; the 21% VAT is inside the advertised price instead.
15% of the taxable base after standard deductions of 30% (long-term), 50% (tourism, sojourn tax paid) or 70% (agency-let tourism, 60+ days average occupancy) - effective rates of 10.5%, 7.5% or 4.5% on gross rent.
15% of the net gain, with the purchase price indexed for retail price growth and improvements deductible. No capital gains tax where the property was your only home and your registered residence, which rarely covers a foreign buyer's second home.
No. A gift to a first-order heir, your children or your spouse, is exempt from both capital gains tax and transfer tax, as are transfers between spouses connected to marriage, divorce or inheritance.
Almost nothing beyond the price - VAT is included, no transfer tax, and notary plus registration of roughly €300 to €800.
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