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This is another emerging real estate market in Europe, if much smaller than that of Croatia. But being one of Croatia's neighbours, it's worth exploring for its potential. This article should help you make your aware of some of the formalities and "peculiarities" of buying a property in Montenegro.
Having got themselves well on the road to recovery after the Balkans war (with billions of dollars of foreign aid), Montenegro has become a property investors dream. Sharing a border with Croatia meant that it has been a logical step for property investors to move further along the Adriatic coast to find a new, untapped market. Especially for those investors who missed out on getting in at the ground floor of the Croatian property boom.
Villa in Budva, Montenegro - luxury stone clad 3-level villa offers elegant living, set in olive grove on the hills above Budva (Montenegro's leading holiday destination), with great sea and mountain views. This is an example of prime coastal properties in Montenegro.
Montenegro seaside town houses
As is the case with Croatia, getting a local lawyer is imperative. Many properties have multiple owners (i.e. owned by whole families) and all parties must be in agreement of the sale. When the lawyer has this in writing, the title of the property can be yours. In other words, make sure you obtain title clearance certificate before you proceed.
Generally, all real estate purchases are cash purchases. The vendor will require a cash deposit of at least 10% of the agreed price and you will need to pay the rest in 30 days. If you cannot complete the deal, you lose the deposit. If the vendor pulls out of the deal, they will have to pay back the deposit plus the same again. Therefore, if you put down €5000 and the vendor defaults, you will receive a total of €10000.
In Montenegro, it is the buyer that pays the real estate agent fees.
- Property tax: 2% (on the sale price, payable to the
- Agent fees: 4% (approx.)
- Legal fees: €750 (approx.)
Agreed sale price = €45000 + €900 tax + €1800 agent fees + €750 legal fees = €48450
It is not necessary to carry the whole amount of money to Montenegro as cash. Although you may wish to carry enough cash for the deposit. You can transfer the outstanding amount electronically to a bank in Montenegro and withdraw the money when you are there.
Some banks don't have any method of direct transfer to Montenegro, so you may have to use a currency exchange to do this for you. Currency exchange often will get better exchange rates, too. Once you have the money with currency exchange, it can be transferred to a bank in Montenegro. Some banks will charge you a percentage for a handling fee, while others will charge you a set handling fee. This can be €15 or higher.
Once you have decided on your real estate property (or properties), seek the proper legal advice and look forward to your new holiday home, capital growth or rental income.
This article is meant to be used as a guide only. Please check with your local contact in Montenegro about current procedures and fees, before you endeavour on buying property in Montengero.