Is property in Montenegro a good investment?

The tax is no longer a flat 3%

This is the single most common error in older articles about Montenegro, and it costs real money. Until the end of 2023 the transfer tax on a resale was a flat 3% of the contract value. Since 1 January 2024 it is progressive.

Up to €150,000 the rate is still 3%. Above that, the tax is €4,500 plus 5% on the excess. Above €500,000, it is €22,000 plus 6% on the excess. On a property at €600,000 that is €28,000, not the €18,000 a flat 3% would suggest.

On a first sale of a new build the seller pays VAT and the buyer owes no transfer tax at all. Whether a property is a first sale or a resale therefore changes the entry cost more than any negotiation on the price will.

Running costs are low, and stay low

The annual municipal property tax is calculated by the local authority on market value and cannot exceed 1% of it. In practice most coastal properties sit well under that ceiling.

There is no wealth tax on property, and company formation and running costs stay below Western European levels, which matters if the purchase is structured through an entity.

Notary fees scale with the transaction value and with whether translation is needed. Budget for them as a percentage rather than a fixed figure.

Rental demand is seasonal almost everywhere

This is where projections usually break. The coast lets well from June to September and thinly outside it. A yield calculated on twelve months of the summer rate is not a yield, it is a wish.

Podgorica is the exception, and the only market here with genuine year-round demand: offices, universities and administration rather than tourism. It also carries the lowest headline prices of the towns we cover.

Our own long-term rental book is small, 15 properties, which itself tells you something about where this market puts its energy: it sells far more than it lets.

What actually decides the answer

Two things. The first is position, because the gap between first line and three streets back is larger here than the finish of either building would justify, and it is the part that holds value when the market softens.

The second is who manages the complex. In branded schemes the service charge buys maintenance, security and a rental programme; outside them, an owner abroad is running a building by telephone. That difference shows up in the resale price years later.

Prices have climbed steadily from a low base and much of the coast is still undeveloped, which is the structural argument for the market as a whole. It is not an argument for any particular apartment.

A note on what this is not

This is a general summary written by an agency, not tax or investment advice. Confirm your own position with a Montenegrin lawyer or accountant before you commit to anything, particularly on structuring and on how the transfer tax applies to your case.