Montenegro is a small mountainous country located in Southeastern Europe, on the Balkan Peninsula, with a coastline on the Adriatic Sea, and with a specific real estate market that offers something for everyone’s pocket.
Montenegro belongs to the hottest and the sunniest tourism regions in Europe, and it is a very attractive tourism destination. After visiting and enjoying Montenegro, many tourists decide to buy some property, start their business here, or invest in real estate. Such decisions are easier to make when considering that, with buying property, foreigners are allowed to obtain residence permits.
There are no restrictions on foreigners buying property, except for land, which can only be purchased by foreigners through a company if it is agricultural land. Property tax rates are also attractive for foreigners, because the property transfer tax rate is 3%, and the annual property tax rate range is between 0,25% and 1% of the property’s market value. Montenegro has also signed double-taxation treaties on income and property with more than 40 countries.
The real estate market in Montenegro is very diverse, in terms of the type of real estate offered on it, and very favorable, in terms of real estate prices. In Montenegro you can find everything from simple apartments and townhouses all the way to luxurious, fabulous penthouses and stone villas with amazing sea views.
The Economic Citizenship Program, which started in January 2019, gives the opportunity to obtain a second passport through the investment in real estate, which can be acquired by a donation to the government plus the purchase of real estate in the country.
Investments range from EUR 350,000 to EUR 500,000, so this program results in attracting wealthier investors interested in Montenegro citizenship. The Government of Montenegro has extended the citizenship program until December 31, 2022.
There has also been a marked increase in the investments in real estate by entrepreneurs and foreigners that invest in small businesses, as well as by highly qualified foreign workers that moved to Montenegro.
The trends in the real estate market and prices in recent years stayed positive, despite the COVID-19 crisis which has not avoided Montenegro. Last year, the Montenegrin real estate market recorded a significant increase in demand and sales compared to 2020, when the market was in sharp decline due to the COVID-19 pandemic.
Although Montenegro is a small country, there is a significant difference in the price of properties depending on the region where they are located. We can split the real estate market into three regions: coastal, central, and northern. In the north of the country, properties can be bought for as little as EUR 500 per square meter. In Podgorica, the capital of Montenegro, prices range from EUR 1,000 to 2,000 per square meter, while at the seaside prices range from EUR 1,000 to 4,000 per square meter.
Property prices have seen a slow increase compared to a few years ago, but real estate prices in Montenegro are still some of the lowest in the region and the European Union. The price increase was influenced by the increase in the price of construction materials and, in 2021, property prices increased by between 10% and 25%.
We do not expect a considerable increase in prices on the real estate market in the next period. But, as we drive to join the European Union, now is a great time to buy real estate in Montenegro, as its value will increase significantly after joining the EU.
By Jelena Vujisic, Partner, Vujacic Law Offices