Montenegro combines a rich history, a wonderful climate, a growing economy and favorable conditions for investors, which makes it very attractive for real estate investment. Buying real estate in Montenegro is a chance to get high profits and an excellent opportunity to immigrate to one of the most beautiful countries in the world.

In our article, we will talk about the benefits of investing in real estate in Montenegro and how to avoid possible risks.

What an investor needs to know about Montenegro

What is Montenegro? This is a small but very beautiful country on the Adriatic coast. It appeared on the political map of the world quite recently – in 2006. The country has great potential for real estate investment and can offer investors many benefits. Tourists from all over the world come here to enjoy the view of dense black forests against the background of mountains and the sea, to get acquainted with medieval villages and picturesque city streets.

Investors in Montenegro are attracted by the low cost of living, a simple and understandable taxation system and a democratic system of public administration. The infrastructure and social sphere are also developed. In addition, there is a constant development of the economy in Montenegro.

The standard of living in Montenegro is relatively low compared to some European countries. However, it continues to grow in recent years and is higher than in the CIS countries.

The financial side of investing in real estate in Montenegro

The financial side of investing in real estate in Montenegro can be very attractive for investors. The cost of real estate in Montenegro is relatively low compared to other European countries, but it is growing every year. Buying property in Montenegro can also be a profitable investment in the long run.

What is the cost of housing in Montenegro

Real estate prices in Montenegro can vary significantly depending on the region, type of property and condition of the property. For example, in the capital Podgorica, prices for apartments in new buildings start from about 2,000 euros per square meter, while on the coast, in the cities of Budva and Bar, prices for apartments in new buildings can start from 2,500 euros per square meter.

Prices for resale properties can also be lower, depending on the condition of the property. However, when buying a second home, it is necessary to take into account the possible costs of repairs and renovations.

The cost of new villas on the coast can start from 450,000 euros, but can also significantly exceed this amount. Distance from the sea plays an important role in pricing.

You can also buy land and build a house from scratch. In this case, you can contact our company. We deal with turnkey investments: from the selection of a site and the preparation of all documentation to the construction of a house.

In addition, the value of real estate can be influenced by many factors, such as location, sea view, distance from the city center, availability of infrastructure, condition of the building and other factors. Therefore, when buying property in Montenegro, it is important to conduct a thorough market analysis and choose the most suitable option.

Additional real estate costs

In addition to the direct costs of buying real estate, investors incur a number of additional costs that you need to be prepared for:

• Purchase taxes: When buying a property in Montenegro, you must pay a tax on the transfer of ownership, which is 3% of the value of the property. From January 1, 2024, progressive tax rates for the purchase of real estate in Montenegro are introduced. In addition to %, an additional fixed rate is introduced for real estate worth over 150,000. Euro. Relevant amendments to the Law on Real Estate Turnover have recently been approved by the government and parliament. Objects up to 150.000 euros – 3% tax, objects over 150.000 euros up to 500.000 euros – 4.500 euros fixed + 5%, objects over 500.000 euros – 22.000 euros fixed + 6%.
• Property tax: In Montenegro, property owners are required to pay property tax every year. The amount of tax depends on the value of the object, area and location and can range from 0.25% to 1%.
• Real estate maintenance costs: these costs include – monthly fees for the services of the maintenance company, utilities.

The cost of renting a property in Montenegro

The profit that can be made from investing in real estate in Montenegro can be significant. Montenegro has a very developed tourism sector and many people are looking for vacation rentals. Renting a property can generate significant income depending on the location and type of property.

Risks of investing in real estate in Montenegro

Despite the fact that Montenegro looks attractive for investing in real estate, you need to understand that, like in any other country, there are certain risks. Some of the risks an investor may face include:

• Illegal construction: in Montenegro, many buildings are built illegally, which can lead to an investor purchasing property that does not have a legal basis. You can protect yourself if you buy a building plot instead of a finished house and entrust the execution of all documents and the construction of a trusted company with a good reputation.
• EU Accession Uncertainty: Montenegro is officially a candidate for EU membership, but is not yet a member. It must be understood that despite positive statements, EU membership is likely, but not guaranteed.
• Lack of housing at average prices: there is practically no “golden mean” in the land market of Montenegro – plots at average prices. This can be a problem for investors who are looking for properties in a certain price range.

Benefits of buying investment property in Montenegro

Buying investment property is not only a way to invest capital, but it can also lead to additional benefits, such as the possibility of immigrating to Montenegro.

Montenegro has one of the most attractive taxation systems in Europe. Real estate tax is only 0.25% of the property value, which makes it very attractive for investment. For new construction projects, there is a tax exemption that exempts from paying taxes for 3 years.

If you are planning to buy a property in order to earn on rent, Montenegro also looks more attractive than neighboring countries. Tax on personal income in Montenegro ranges from 9 to 11%, while in neighboring Croatia it is 30%.

In recent years, the economy of Montenegro has shown steady growth, which indicates that the country is going through a period of stable economic development. This creates a favorable atmosphere for investors who can expect the value of their property to rise in the future.

Prospects for the development of the investment property market in Montenegro

Buying an investment property in Montenegro can be a great opportunity to get a stable and high income.

1. The construction sector of Montenegro is in second place in the world in terms of development dynamics, which indicates a high demand for real estate in this country. Most countries, including the CIS, in comparison with Montenegro cannot boast such high growth rates of construction. This makes Montenegro especially attractive for investors.
2. Investment property in Montenegro can bring constant high profits, including through tourism, which is one of the main sources of income for the country. Tourism in Montenegro is developing steadily and annually attracts more and more tourists. Therefore, buying real estate in Montenegro, for example, apartments or villas for rent, can be a profitable and long-term investment.

In addition, the acquisition of real estate in Montenegro may enable the investor to immigrate to this country, obtain a residence permit or citizenship. This will open up additional opportunities for doing business or living in this beautiful country.