Why you should take a closer look at real estate in Montenegro
Journalist and music critic
If you’re from the US, the UK or Australia, Montenegro might look like just a tiny spot between Italy and Greece. But small places often hide the biggest surprises - euros as the main currency, the Adriatic right in front of you, and relaxed taxes. In short: a calm European lifestyle with the ability to own property without drowning in paperwork.
Right now Montenegro is in a sweet spot: the market is growing, the country is moving steadily toward the EU, and real estate is still reasonably priced compared to nearby hotspots. It’s no longer the “wild Balkan coastline”, but it’s also not Dubrovnik with price tags that feel like Manhattan.
Contents
Important for US, UK and Australian buyers
Why you might want this
1. A second home base in Europe
Montenegro is basically “Europe with ocean views and a two-euro coffee”. Fly in through Berlin, Belgrade or Istanbul and you’re in Budva, Kotor or Tivat in no time. For many Americans, a condo here isn’t just a vacation property - it’s a go-to place for quick escapes from the grind.
2. Residency through real estate
Property owners can currently apply for a one-year temporary residency permit with the option to renew.
*Important!* The Montenegrin government plans to introduce a minimum real estate value of 200,000 € for residency-by-investment. While this rule is not active yet, the current conditions are significantly more favorable - you can still buy and apply under the old, easier requirements.
3. Rental demand and income
Tourism increases every year. Apartments in Budva and Tivat rent easily throughout the summer - and with the right setup, you can earn year-round.
- Rental income tax - around 15 %.
- Capital gains tax - also 15 % (with exemptions for primary residences). Not a “get rich quick” scheme, but a solid, predictable financial tool.
4. An investment that feels good to own
You’re buying a euro-denominated asset in a European jurisdiction, with transparent registration and straightforward laws. If you want part of your portfolio in something stable, tangible and enjoyable - this fits the bill.
Ownership costs
When you buy:
- Resale properties - 3-6 % transfer tax, depending on the purchase price.
- New builds from developers - instead of the tax, there’s a 21 % VAT, usually already included in the final price.
Annual costs:
- Municipal property tax ranges from 0.25 to 1 % of the assessed value. For example, a 200,000 € apartment typically costs 500-2,000 € per year in taxes.
How the buying process works - the short version
1. Figure out what you want.
Beachfront house? A condo in a managed complex? A quieter place with mountain views? Everything else depends on this first step.
2. Document check.
Request the land registry extract and building permits. Your attorney checks for liens, debt or illegal construction.
3. Reservation.
Once you agree on the price, you sign a preliminary contract and pay a deposit - usually around 10 %.
4. Preparing the final contract.
You open a local bank account, provide documents (passport, tax number, marital status), and your attorney prepares the final purchase agreement.
5. Signing at the notary’s office.
Both parties meet at the notary, sign the agreement, and the payment is made via bank transfer or escrow.
6. Registration of ownership.
You pay the transfer tax, and the notary submits the paperwork to the land registry. Within a couple of weeks, you’re officially the owner.
Important for US, UK and Australian buyers
- Bank transfers. Check international transfer limits. Montenegrin banks require proof of funds for incoming money.
- Taxes back home. Owning or renting foreign property may require reporting to the IRS, HMRC or ATO.
- Short-term rentals. To rent short-term, you must register the property with the local tourism board and pay the applicable fees.
- Insurance. It’s smart to insure both the property and your liability as a landlord.
Summary
Real estate in Montenegro isn’t about “buy it and forget it”. It’s about “buy it and give yourself more freedom”. Euros, sunshine, stability, the potential for residency - and a market that’s still far from overheated.
While others scroll through beach photos online, you could be sipping your morning coffee on your own balcony thinking, “yeah, this was a good call”.
Journalist and music critic