Whether to buy property in Montenegro: pros and cons of investment

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Montenegro, with its breathtaking scenery, mild climate and status as one of the most affordable countries to buy property in Europe, has become a real magnet for foreign investors in recent years. Interest in the Balkan property market is steadily growing. But is it really worth buying property in Montenegro in terms of long-term benefits and feasibility? To get an honest answer, you need a detailed analysis that goes beyond the promises of realtors.

Should you buy property in Montenegro: geography and transport accessibility

Montenegro is compact but multifaceted: the Adriatic coast alternates with mountain valleys, and a well-developed road network connects tourist areas with business centres. Podgorica and Tivat airports receive regular flights from Europe, the Middle East and Asia, which ensures a steady flow of tourists and tenants. Holidays here are no longer seasonal – demand for accommodation throughout the year remains high due to the mild climate and year-round routes. What does buying property in Montenegro offer? First of all, access to a place where the mountains meet the sea, and logistics allows you to get to any part of the country in two hours.

Affordability of purchase: the financial threshold to enter the market is one of the lowest in Europe

The average price per square metre in resort areas remains below 2,000 euros, and in the suburbs – from 900 to 1,200 euros. For an investor, this means not only a start with lower costs, but also a high potential for value growth. A typical studio flat in Budva will cost 80,000 euros, and a two-bedroom flat will cost 110,000 euros. A house in the mountains with a plot of land can be bought from 140,000. These figures allow you to form an investment portfolio even with a limited budget.

Pros for the investor: whether it is worth buying property in Montenegro

The decision to invest requires calculation rather than emotion. Below is a one-size-fits-all breakdown of the benefits that answers the question – is it worth buying property in Montenegro in 2025.

Key pros for the buyer:

Affordable prices – compared to Croatia, Greece and Italy, the cost of housing in Montenegro remains significantly lower, while the quality of finishes and views meet European standards.
Tourism growth – the industry is growing at 7-9% per annum, increasing demand for short term rentals. Guest apartments bring income up to 8-10% per annum.
Loyal legislation – foreigners can buy housing without restrictions, and transactions are transparent. The property registration process takes from 3 to 6 weeks.
Tax conditions – property tax does not exceed 0.1-1%, rent is taxed at a flat rate, tax burden on income remains low.
Potential for residence permit – buying a home makes it easier to obtain a residence permit, especially if there is entrepreneurial or tourist activity.

Minuses and risks: what to look out for

Market potential does not negate the need to analyse. Buyer’s weaknesses are lack of document verification, working with non-certified agencies and overestimation of profitability.

Major disadvantages:

Legal intricacies – transactions require notarisation and translation, which increases costs.
Risk of “paper” properties – properties without building permits or with restrictions on use are found on the market.
Seasonality – in remote areas, rentals only operate from May to September.
Low liquidity – resale can take up to 12-18 months, especially without urgent demand.
Problems with management companies – not all properties provide reliable service to tenants.

What gives the purchase of property in Montenegro – it is not only a benefit, but also a commitment to careful consideration of each stage of the transaction.

Rental income potential and tenure strategy

Rental income is one of the main factors that form the answer to the question whether it is worth buying a property in Montenegro. Housing on the coast is actively used in both short-term and long-term rentals. In the summer months, tourist apartments bring from 60 to 150 euros per day, depending on location and comfort level. In three months, the high season can generate up to 80% of annual income, especially with a proper marketing strategy and presence on international booking sites.

Out of season, long-term rentals remain stable: in Budva, Kotor or Tivat, a one-room flat rents for 400-600 euros per month. A homeowner in the mountains or remote suburbs gets less, but reduces maintenance costs. A proper ownership strategy includes:

selecting a facility with minimal operating costs;
calculation for combined rentals – short-term rentals in summer and long-term rentals in winter;
hiring a local manager with experience in working with foreigners;
keeping an official lease registration and paying tax.

How to choose a location: coast, mountains, suburbs

A prestigious neighbourhood isn’t always the most profitable, and growing areas often give a greater increase in value. Comparison of key areas:

Budva is a tourist centre with developed infrastructure, high demand, but also market saturation. Ideal for short-term rentals.
Tivat – prestige, yachts, investments. Prices are above average, rental demand is stable all year round.
Bar is a functional harbour city with affordable real estate and growth potential.
Herceg Novi – tranquillity, thermal springs, interest for health tourism.
Petrovac and Ulcinj are young markets where the price has not yet caught up with the potential.

Mountainous areas such as Kolasin or Zabljak offer accommodation for fans of active holidays. The suburbs of Podgorica or Cetinje allow you to buy a house or plot of land at below market prices, while maintaining access to the city infrastructure.

Whether it is worth buying property in Montenegro: pros in figures

A typical investment calculation: a flat costing 100,000 euros and rented for 120 days a year with an income of 80 euros per day yields a gross income of 9,600 euros. After taxes, maintenance and depreciation, this leaves a net profit of 6,500-7,000 euros, which is equivalent to 6.5-7% per annum. If the property value increases by 5-7% per year, the total income exceeds 10%.

What gives the purchase of property in Montenegro in practice:

moderate financial threshold for entry;
sustainable passive income;
capital growth through market dynamics;
the possibility of obtaining a residence permit;
control over the asset and flexibility in management.

Investment with prospects

Buying property in Montenegro is a choice in favour of a real asset, a sustainable economy and a growing tourism sector. Against the background of political stability, tax transparency and openness to foreigners, the market demonstrates maturity and potential. The answer to the question, whether it is worth buying property in Montenegro, is formed not on emotions, but on numbers, logic and pragmatism. A balanced approach to the choice of object and ownership strategy turns an investment into a reasonable long-term decision.

Property taxes in Montenegro in 2025: what buyers and owners need to know

Property taxes in Montenegro remain some of the most favorable in Europe, making the country attractive to investors. Simple rules for acquisition, affordable prices, and stable tax legislation allow for advantageous purchases of apartments, villas, and houses for both locals and foreigners. However, before making a purchase, it is important to understand which fees need to be taken into account in 2025.

In this overview, we will look at the fees paid by property owners, tenants, and sellers in Montenegro, as well as delve into the nuances of tax residency.

Property Purchase Tax in Montenegro

Acquiring property involves a mandatory contribution, but its amount depends on the type of housing. For new buildings, there is no fee if the purchase is made from the developer, as VAT (17%) is already included in the price. However, when purchasing existing properties, the tax amounts to 3% of the cadastral value of the property.

A foreigner purchasing property should take into account that the fee is paid by the buyer and is one-time. Payment requires submitting a tax declaration within 30 days after signing the sales contract. Additionally, notary and registration fees, amounting to around 0.5-1% of the transaction value, must be considered.

Rental Income Tax

If you rent out property in Montenegro, be prepared to pay a rental income tax, which amounts to 15% of the net profit. However, there are nuances that can help reduce the taxable base and avoid overpayment.

Firstly, the tax is calculated not on the full rental amount, but on the profit remaining after paying utility bills and property maintenance expenses. If rental agreements are formalized, expenses for repairs, depreciation, and even improvements to the property can be deducted.

For short-term rentals (e.g., tourist rentals), registration with the tax authorities and obtaining a permit for such activity will be required.

Property Sale Tax in Montenegro

If you decide to sell an apartment, villa, or house, it is important to consider how long the property has been in your possession.

If the property has been owned for more than three years, no levies need to be paid — the state exempts such owners from payment. However, if less than three years have passed since the purchase, a 15% tax on the difference between the purchase and sale prices must be paid.

Taxes for Foreigners

There are no separate fees for foreigners in the country, so a foreigner pays the same fees as local residents. However, it is important to consider tax residency.

If a person resides in the country for more than 183 days a year, they automatically become a resident and are obliged to pay contributions not only on rental income but also on any other income, including profits outside Montenegro.

For non-residents, the burden is limited to property and income earned within the country.

How to Reduce Fiscal Payments on Property?

Although property taxes in Montenegro remain relatively low, owners and foreign investors can utilize several strategies to reduce them:

Buying new properties from developers — acquiring property directly from developers allows avoiding property purchase tax. When purchasing existing buildings, a 3% fee is charged, whereas this fee is waived for new constructions as VAT (17%) is already included in the price. This is especially beneficial for those considering long-term property investments;
Choosing properties in areas with low tax rates — municipalities set individual tax rates, which can range from 0.1% to 1%. By selecting a property in less popular locations, such as small towns and rural areas, annual expenses can be significantly reduced. Property taxes are minimal in small towns and rural areas;
Official registration of property rental — if a property is rented out, the owner must pay a rental income tax (15%). However, with official rental agreements, deductions can be claimed to reduce the taxable base. These expenses include repair costs, property maintenance, depreciation, and utility bills;
Long-term property ownership — if a property is sold more than 3 years after purchase, the owner is exempt from profit taxation. For foreign investors, this is one of the main advantages as it avoids additional costs upon subsequent resale;
Choosing the right resident status — if a foreigner resides in Montenegro for more than 183 days a year, they automatically become a resident. For minimizing the tax burden, it is better to remain a non-resident, maintaining obligations only within property ownership.

Thanks to these tax strategies, Montenegro’s tax legislation remains one of the most attractive in Europe. A smart approach to fiscal payments makes property ownership not only convenient but also financially advantageous for those considering long-term investments.

Conclusion

In 2025, property taxes in Montenegro remain transparent and convenient for both investors and regular owners. A simple tax system, absence of hidden fees, and flexible conditions make property purchase and ownership a beneficial decision.

When purchasing existing properties, buyers pay a 3% tax, but this fee is not levied when buying new constructions.

For those planning to sell property, the conditions are also favorable: if the property has been owned for more than three years, no profit tax is levied. For foreign buyers, the rates remain the same as for citizens, but it is important to consider the rules of tax residency.

Overall, buying property in Montenegro is a clear and advantageous process, making the country attractive for both personal residence and long-term investments.

June 15, 2025

The benefits of investing in commercial property abroad: a new geography of capital

Investing in property overseas no longer looks like a luxury – it has become a sound strategy for capital protection and growth. The benefits of investing in overseas commercial property open up a world of opportunities for investors, from stable cash flow to value growth in rapidly developing regions. Choosing the right market becomes the first step to financial independence. Montenegro is on this map as a new safe haven for capital.

Investing in overseas commercial property: basic advantages

Placing funds in commercial property abroad turns them into a working mechanism that generates income without the daily involvement of the owner. Main drivers of interest:

Real assets instead of virtual numbers in accounts.
Annualised returns above inflation.
Protecting funds from localised economic downturns.
Multi-currency income opportunity.
Tax optimisation tools through international treaties.

The benefits of investing in overseas commercial property are particularly pronounced over the long-term horizon, when the volatility of other assets drains the portfolios of less forward-thinking investors.

Advantages of investing in commercial property abroad in detail

Investing outside your home market forms a powerful financial shield. Advantages:

Stable demand: international rentals rarely sag even in crises.
Cost increases: infrastructure projects raise the price of properties without additional investment.
Access to global tenants: international chains lease properties on long term leases.
High liquidity: in-demand locations ensure quick sales in case of the need to exit the project.
Variety of formats: retail space, offices, hotels, apart-complexes.

The benefits of investing in commercial property overseas are enhanced by proper diversification and selection of high-growth markets.

Montenegro: a new star on the investor map

Montenegro is becoming one of the most promising destinations due to the combination of affordable prices, growing tourist flow and state support for investments.

Advantages:

GDP growth of 6-7% per year: one of the best dynamics in Europe.
Citizenship by Investment Programme: an opportunity to obtain an EU passport through a real estate investment.
Liberal taxation: tax on rental income as low as 9%.
Growing tourism market: tourist arrivals are increasing by 15-20% annually.
Direct neighbourhood with the EU: open borders and visa-free regime with Europe.

The benefits of investing in overseas commercial property in Montenegro go beyond classic returns, creating a foundation for personal empowerment on the international stage.

Passive income from real estate: the formula for a peaceful life

Commercial property in Montenegro brings stable income due to high rental demand in the tourist and business segments. The standard yield of properties is 6-8% per annum without taking into account the growth in value. Apartments on the coast or offices in Podgorica pay off faster than their counterparts in Western Europe due to low competition and strong internal dynamics of demand.

Passive income from property is made up of three components, including:

Regular rental payments.
Indexation of rental rates to the inflation rate.
Increase in property value when holding the property for more than three years.

Such a model creates a self-replicating income stream protected from localised fluctuations and inflationary processes.

Investment diversification: multiple layers of capital protection

Buying commercial property in different countries forms a stable investment portfolio capable of surviving even systemic global crises.

How diversification works:

Investing in different economies minimises geopolitical risks.
Different currencies in the portfolio reduce the impact of inflation of one of them.
The combination of different types of properties (offices, retail space, hotels) stabilises the overall cash flow.

The advantages of investing in foreign commercial property are most vividly manifested in multi-object portfolios, when the fall of one market is compensated by the growth of another.

Capital protection as a key benefit of investing in overseas commercial property

Commercial property abroad protects capital from instability and political risks better than most other assets. Key mechanisms:

Legislative protection of private property in Europe.
International agreements on the inviolability of investments.
Possibility to insure commercial risks through international companies.
Golden visa programme in Montenegro, opening the way to EU citizenship.

The mechanisms create an impenetrable defence of funds, allowing them to be preserved and multiplied regardless of domestic political conditions.

List of countries for investment

To take full advantage of the pros of investing in overseas commercial property, you need to choose the right regions. Promising destinations:

Montenegro: a new centre for European tourism and investment.
Cyprus: attractive tax rates and a stable market.
Greece: economic recovery and rising property prices.
Germany: the benchmark for stability and liquidity of commercial properties.

These countries allow for a sustainable and income-producing portfolio that can provide not only stability but also asset growth for decades to come.

The pros of investing in overseas commercial property – the path to a new level of freedom

The benefits of investing in overseas commercial property today go far beyond simply generating income. They create a foundation for financial independence, global mobility and capital protection. Montenegro demonstrates that smart investments in the right jurisdictions open the door to international opportunities, EU citizenship and passive income without borders.

June 15, 2025