Buying Real Estate in Montenegro: 5 Pros and 5 Cons

Is it worth buying an apartment or a house on the Montenegrin Adriatic coast? What are the advantages, and could there be downsides to such a decision? What is the situation in this country regarding infrastructure, property taxes, and is residency guaranteed for buyers? Is the climate truly as good as people say? In this article, you will learn about advantages and the downsides, as well as find recommendations on how to choose a property to ensure that the benefits clearly outweigh any drawbacks.

Content

How We Decided on the Advantages and Disadvantages

Pros of Buying Real Estate in Montenegro

Real Estate Prices

Let’s Compare Prices with Other Countries

Taxes

Geography and Climate

Possibility of Montenegro's Accession to the EU: Positive Prospects

How Easy is it to Buy Property in Montenegro?

Cons of Buying Real Estate in Montenegro

Infrastructure

Lack of Central Heating

Buying Real Estate Does Not Confer a Residence Permit

Possibility of Montenegro's Accession to the EU: Negative Prospects

Earthquake Risks

Advice for Buying Real Estate in Montenegro

The sharp rise in Montenegrin real estate prices between 2022 and 2024 is a result of increased demand from migrants who are actively purchasing homes and apartments in the country. However, this country has long attracted foreign buyers, consistently showing growth in the housing market year after year, with the exception of the pandemic period. Those looking to move here, along with investors, often cite three main advantages of acquiring property in this country:

• Affordable prices: The average cost of housing in Montenegro is around €1,500 per square meter. In modern residential complexes within resort areas close to the sea, prices range from €2,000 to €2,200 per square meter. In the central and northern regions, prices drop from €800 to €1,000 per square meter. There is also a wide selection of apartments priced between €50,000 and €70,000 and houses between €70,000 and €100,000.
• Low taxes on transactions and property ownership: Taxes on property transactions and ownership are generally low, with progressive rates starting at 3%. For luxury properties taxes are higher, while for budget properties they are lower.
• Strategic location and mild Adriatic climate: This country boasts a resort coastline along a clear sea, picturesque mountain views, and charming medieval towns from the era of the Venetian Republic, making it an attractive destination for both investors and residents.

However, every coin has two sides, and Montenegrin real estate is no exception. There are certain downsides to consider. The question is whether these drawbacks outweigh the benefits or not. Is it possible to buy an apartment, house, or villa in this place in a way that minimizes the negatives while maximizing the advantages?

Let’s weigh the pros and cons of Montenegrin real estate by highlighting the key factors that influence the decision to purchase. This will be useful for those interested in relocating to the country’s resort areas, setting up a vacation home, investing in property along the Adriatic coast, or buying real estate to obtain temporary residency.

How We Decided on the Advantages and Disadvantages

Deciding to purchase real estate is a complex process influenced by multiple factors. To provide a balanced overview, we’ve considered the following:

• Climate and geography
• Transportation access and infrastructure across different regions
• Tax burdens associated with purchasing and owning property
• The process of transaction formalities
• Political factors, particularly the country's potential accession to the European Union
• Details regarding temporary residency permits through real estate ownership

Pros of Buying Real Estate in Montenegro

The attractiveness of Montenegrin real estate is largely driven by its affordable prices, which are significantly lower than in other Mediterranean and Adriatic countries. This makes it possible for individuals with average incomes to acquire a piece of this place and enjoy the perks of owning property in this country.

Low taxes and straightforward purchase procedures are also compelling reasons to consider Montenegrin real estate. Additionally, the prospect of the country joining the European Union adds potential for higher property value.

Real Estate Prices

For a resort country bordered by the warm and clear Adriatic Sea, property prices in Montenegro remain highly affordable, despite the sharp increases in 2022-2024 driven by an influx of buyers from Russia and Ukraine. Currently, the average price per square meter is around €1,500, with proximity to the sea and resort infrastructure being the key factors driving prices.

Prestigious places to live in this country are Tivat, Kotor, and Budva, where prices for new developments near the coast range from €2,000 to €2,200 per square meter, and luxury properties can reach €3,000-5,000 per square meter. Meanwhile, in smaller coastal villages and the capital, Podgorica, prices range from €1,000 to €2,000 per square meter, and in more remote inland towns, they can be as low as €500-600.

The most popular type of housing is apartments priced at €50,000-70,000. If one doesn’t prioritize size and the prestige of the residential complex, such an apartment can be located just 500 meters from the coastline. Houses priced at €50,000-120,000 are also actively purchased, and for €200,000, one can even acquire a real villa — though not in the most prestigious location.

Let’s Compare Prices with Other Countries

When comparing the country's real estate prices with those in other Mediterranean and Adriatic countries, they are significantly more attractive. Prices in France, Italy, Spain, and Cyprus are 1.5 to 3 times higher, even for similar properties. Greece, while more affordable than those countries, is still 20% more expensive than Montenegro when comparing capital cities, and 30% higher in popular coastal locations.

Few European resort countries offer high-quality coastal properties at prices accessible to individuals with average incomes. Montenegro, Croatia, and Bulgaria are among the few exceptions. Although Bulgaria offers lower prices, its coastline is along the Black Sea, which is slightly cooler, and the resort season is shorter.

In Croatia, property prices are higher, and immigration laws are stricter. Additionally, many buyers are put off by the country's history of religious conflicts, which this country does not have. 

When planning relocation, many compare Montenegro with Serbia, as both countries are welcoming to expats and offer relatively easy temporary residency processes. Serbia has lower property prices, but it lacks a coastline.

Taxes

Another advantage is the country's low property tax rate. When purchasing property (specifically, secondary market property), buyers pay a transfer tax of 3-6%, based on a progressive scale:

• For properties up to €150,000: 3%
• For properties between €150,000 and €500,000: 5% on the amount exceeding €150,000, plus a fixed tax of €4,500
• For properties over €500,000: 6% on the amount exceeding €500,000, plus a fixed tax of €22,000

These new tax rates took effect on January 1, 2024. Before this, the tax rate was a flat 3%. Experts predict that the introduction of a progressive tax scale may slightly reduce interest in the luxury segment, but the most popular segment, which appeals to people with average incomes, remains unchanged at 3%.

Comparable tax rates exist in Croatia (3%), while other Adriatic and Mediterranean countries have higher taxes:

• Greece: 3.09% plus municipal tax
• Cyprus: 3-8% (3% for properties up to €85,000)
• Spain: 6-10%
• Italy: 4-10%, with higher rates for non-primary residences

For new constructions, VAT applies:

• Montenegro: 19%
• Croatia: 25%
• Greece: 24% (with a moratorium until the end of 2024, meaning a temporary 0% VAT)
• Cyprus: 19% (5% if the property is for primary residence)
• Spain: 10%
• Italy: 10-22% (depending on the property’s market segment)

Since VAT is usually included in the property price, most buyers focus on the total cost rather than the specific tax burden. Therefore, when analyzing the market for new constructions, it is simpler to compare final prices.

As for property maintenance taxes, they are also relatively low in this country, ranging from 0.25% to 1%, depending on the property’s class. If the property is located in the capital or a tourist area, a tourist tax is also levied, amounting to an additional €75-150 per year for a 100-square-meter apartment.

Geography and Climate

Montenegro’s coastal location is a significant factor when purchasing property. The resort season begins in late May, when the sea warms to 20°C, and ends in early October. In certain years, people swim until December. The country boasts over 120 beaches, ranging from elite and free beaches to those with trendy club infrastructure and completely wild spots. Thirty of these beaches have been awarded the "Blue Flag" for exceptional cleanliness.

The pride of the country is the Bay where the most prestigious resorts are located. However, the coastline also features many other bays and inlets, well-protected from winds and waves. There are also long stretches of beach with waves perfect for surfers, such as Velika Plaža.

Local products are not only affordable but of high quality, including cheese, meat, vegetables, and, of course, fresh seafood. Cafés and restaurants are scattered along the coast, offering another benefit of the warm climate and coastal location.

Mountainous landscapes add to the region’s scenic beauty, with cliffs visible from any point along the coast. Also, there are ski resorts.

The country’s compact size is another advantage, allowing residents to reach beaches, ski centers, or medieval landmarks within an hour or two. If beachfront apartments or villas are out of budget, affordable options in central or northern regions are available, with easy access to beaches or ski slopes on weekends.

This part of the Adriatic coast is dotted with charming towns featuring stone walls and red-tiled roofs. Thanks to "Game of Thrones," many people have discovered the beauty of Croatia’s Dubrovnik, which served as King’s Landing in the series, and have fallen in love with the country's landscapes. The good news is that similar views can be found along the coasts of both Croatia and Montenegro. A true gem in this country is Sveti Stefan, an island connected to the mainland by a man-made causeway. It’s a fairytale town perched on a rock surrounded by turquoise waters.

One of the advantages of this Adriatic location is its proximity to Italy. Romantic Venice is accessible by a coastal drive through Croatia or by yacht. During the season, a ferry runs from Montenegro’s Bar to Bari, Italy. In the Middle Ages, the country was a part of the wealthy and powerful Venetian Republic, as evidenced by the numerous historical landmarks from that era. The towns of Kotor and Perast are often referred to as "Venetian Montenegro".

Living or vacationing in this place doesn’t feel like being confined to a small country. It’s easy to embark on affordable road trips across the Balkans and visit Italy, Switzerland, Germany, or Austria, Montenegro being the best place to settle. Budget airlines offer cheap flights to European capitals. For example, a flight to Rome can cost as little as €60, and sometimes even a trip to London is available for €20.

Possibility of Montenegro's Accession to the EU: Positive Prospects

The country’s accession to the European Union is a matter of time, and that moment seems near. On June 26, at the Intergovernmental Conference in Brussels, the country received the IBAR (Interim Benchmark Assessment Report), a crucial step towards full EU membership. Prime Minister Milojko Spajić has assured that the government is focused on this goal.

Experts believe that the country’s EU membership will be a catalyst for property price growth and will generally boost economic activity. The anticipated benefits include:

• No border controls, allowing Montenegrin citizens to travel and work freely within the EU.
• Unified EU educational standards, making it easier for future generations to enroll in universities across the EU.
• Improved legislation under the EU’s unified approach and legal values, benefiting foreign businesses and investors. This includes smaller businesses and expats, as Montenegro currently faces issues with corruption and favoritism in its small, close-knit society.
• Higher standards in consumer sectors, addressing the complaints of many migrants, plus, further developing tourism.
• Potential financial aid, stimulating development in the country’s interior.
• Official Eurozone membership. While Montenegro currently uses the euro unofficially, official membership should simplify several international banking procedures.

How Easy is it to Buy Property in Montenegro?

One of the advantages of purchasing real estate in this place is the relative ease of transaction processing and the lack of significant restrictions for foreigners. You can buy houses, apartments, and plots of land for residential construction (except for agricultural land).

In contrast with Croatia, where you need to obtain permission from the Minister of Justice to buy property, no such requirement exists in this country.

Here’s how the purchase process works:

• The buyer pays a bank deposit — typically 5% of the transaction amount. 
• A notary drafts a preliminary purchase agreement. 
• Both parties sign the agreement, also through a notary. In some cases, the notary acts as a guarantor of the transaction: funds can be transferred to the notary's account, which is convenient. 
• The ownership rights are registered with the cadastre office.

Things to consider: contracts are prepared exclusively by a notary and only in the Montenegrin language. If the buyer is a foreigner, a licensed translator must be present during the transaction. The translator's services cost €40 per hour. Transactions with local residents are conducted in euros.

Cons of Buying Real Estate in Montenegro

Now, let's consider the potential downsides of buying property in Montenegro — especially if these factors are overlooked when choosing property. Many of these drawbacks can be mitigated by keeping them in mind during the selection process. Being armed with knowledge can help reduce the impact of negative factors and avoid mistakes during your purchase.

So, what are the potential downsides of Montenegrin real estate, and how significant are they?

Infrastructure

The quality of infrastructure in the country varies significantly across different regions. We can categorize the areas as follows:

• Popular coastal resorts. At first glance, the infrastructure here seems excellent, with residential complexes featuring swimming pools and fitness centers, along with restaurants, shops, clubs, and even casinos. However, the main drawbacks include summer noise and a high cost of living. There is also a noticeable seasonality: when the tourist season ends, many establishments close, and the job market shrinks to almost nothing. Life on the coast becomes quieter (which, on the other hand, could be seen as a plus, offering more peace and tranquility). In smaller towns, finding schools that teach in English can be challenging. If this is important to you, it’s better to choose a city where such educational institutions are available.
• Podgorica, the capital. This green, beautiful, and logistically convenient city has seen a lot of modern development in recent years. It’s a decent option for families with children (it has schools and hospitals), but some people might find the lack of delivery services and limited cultural life disappointing. For entertainment, you’d need to go to Budva, and for major cultural events, to Belgrade in Serbia.
• Small villages, especially in mountainous areas. The infrastructure here is rural, and transportation can be quite limited. Homes may be located 100 meters or more from a paved road.

A general issue in Montenegro is the underdeveloped public transportation system. While there are city and intercity buses, it’s often more convenient to buy or rent a car. If you live in remote towns or villages, having a personal vehicle becomes a necessity for comfort.

On Sundays, almost all shops are closed, but bakeries with aromatic pastries, markets with gastronomic delights, and gas stations remain open. So, it’s not difficult to buy groceries on weekends or weekdays.

Some reviews point out the underdeveloped digital services, as well as a fairly high level of bureaucracy and the absence of the multifunctional service centers (MFCs) that some may be accustomed to. However, the online services sector is evolving: in June 2024, Montenegro ranked first among its Balkan neighbors for the number of online purchases.

As for the internet, there are no issues with coverage, it is good even in the mountains. Free Wi-Fi is available in most cafes and on many beaches.

Lack of Central Heating

One of the main challenges newcomers face when moving to Montenegro is the absence of central heating, which brings up the necessity to use heaters, air conditioners, underfloor heating, and boilers for hot water. The quality of life here largely depends on how much you are willing to spend on electricity. However, many residents opt for an alternative solution — convenient and energy-efficient stoves known as “Yugoslavkas.”

Heating expenses vary by region: in the north, winters can be quite cold, whereas on the coast, it's not uncommon for residents to leave windows open and lounge on terraces in slippers during January.

With winter temperatures around 10-15°C, Montenegrins generally don't bother maintaining high indoor temperatures — it simply isn't necessary. Unlike in colder climates, there are typically no significant temperature differences between the outdoors and inside the house. For those coming from more northern countries, this approach might initially seem unusual, but it's largely a matter of acclimatization. Most people eventually adjust, and those who prefer cooler environments might find it ideal.

Another issue frequently noted is ventilation problems: due to high humidity and improper building usage, mold can develop in homes and apartments, particularly in coastal areas. This makes dehumidifiers and regular ventilation essential habits.

How to Mitigate These Risks:

Before purchasing property, it's crucial to assess how well the building is insulated and ventilated—this applies across the country. In the north, temperatures can drop as low as -20°C, while coastal areas experience mild winters with temperatures ranging from 0°C to 20°C (typically around 10-15°C). However, private homes along the coast may be less suited for winter living since they're often designed for summer tourism.

Recommendations:

• Consider how you will heat your home or apartment and estimate the cost of electricity. 
• Many praise metal wood-burning stoves, the so-called "Yugoslavkas," which are common even in apartment buildings. They provide good heating in winter and can also be used for cooking. However, this option isn't for everyone — not everyone is willing to light a fire daily.
• Another effective solution is modern air conditioners that can both cool and heat your home.
• Be aware that fireplaces are more about aesthetics and ambiance than effective heating. They have high heat loss, so relying on them for warmth isn’t practical.
• Pay attention to the size of the boiler, especially if you enjoy taking baths or have a large family.
• It's also preferable to have a separate water heater in the kitchen for convenience.

Buying Real Estate Does Not Confer a Residence Permit 

Montenegro's "citizenship by investment" program has been canceled, meaning that even purchasing expensive real estate no longer guarantees an automatic passport. To obtain permanent residency, you must live in Montenegro for five years, and citizenship requires ten years of residency.

Regarding temporary residency permits (boravaks), there's a nuance. Many relocators buy affordable Montenegrin studios or small homes solely to obtain a residence permit. In this regard, Montenegrin laws are very lenient — there is no minimum property price required to qualify for a temporary residence permit. You could technically buy a property for one euro! The property doesn’t even need to be wholly owned by you — owning a 50% share is sufficient.

However, it's important to note that owning property in Montenegro won’t allow you to renew your temporary residence permit if you only plan to visit for a couple of months each year. Failure to meet the required stay duration is the main reason for the refusal to extend a residence permit. To renew your temporary permit, you must not only own property but also reside in the country continuously — absences must not exceed one month per year or three months for justified reasons.

If your temporary permit isn’t renewed due to prolonged absences, you can reapply, but you’ll have to go through all the associated formalities again, which takes more time.

It's also worth remembering that property ownership is not a 100% guarantee of obtaining a temporary residence permit. Other requirements, such as a clean criminal record, must be met. Additionally, certain violations that pose a threat to public safety can lead to deportation, even if you own an entire neighborhood.

Possibility of Montenegro's Accession to the EU: Negative Prospects

There are also some concerns about the potential downsides of Montenegro's EU accession. While the coountry's potential entry into the European Union promises numerous benefits, there are a few drawbacks that shouldn't be overlooked:

• More difficulties getting temporary residency and citizenship. Obtaining a temporary residence permit (as well as citizenship) could become more challenging for foreigners, as the country's Law on Foreigners is likely to be tightened.
• Stricter real estate purchase rules for foreigners. It's highly probable that rules for foreign property buyers will become more stringent. For example, in neighboring Croatia, which has already joined the EU, you need to obtain government approval before finalizing a real estate deal. Those who manage to buy property in the country before these changes will have an advantage. However, switching to a more attractive property later might become more difficult, so it's important to choose wisely now.
• Economic reforms could pose risks. There may be significant economic restructuring, with potential negative impacts on certain industries.
• Cost of living is likely to increase. One of the country's main attractions is its affordable cost of living. However, with EU accession, prices are expected to rise, and residents should be prepared for a higher cost of living.

Earthquake Risks

Montenegro is located in a seismically active region, small but noticeable earthquakes with magnitudes ranging from 2 to 5 on the Richter scale happen a couple of times a year. In 2021, there were three such earthquakes, and in 2022 and 2023, there was one each year. Most recently, in March 2024, a 5.3 magnitude quake was recorded with its epicenter 75 km from the capital.

These minor tremors generally don't cause casualties or significant damage (at most, something might fall and break). Most likely, you won’t even feel them.

Could there be a major earthquake? It can't be ruled out. On April 15, 1979, an earthquake caused significant destruction in coastal cities, with the epicenter just 15 km offshore. There were casualties (101 people were hurt), and thousands of homes had to be rebuilt.

Since then, earthquake-resistant construction has become standard in Montenegro. Buildings constructed after 1979 incorporate technologies that enhance structural stability. However, some argue that older homes, which have withstood past quakes, might be the safest — after all, they've already proven their resilience.

If this is a concern for you, it's advisable to consult an expert before purchasing a property to understand the construction technologies used and the building's earthquake resistance.

And as for the smaller tremors, you might even find some humor in them — an excellent opportunity to post a few dramatic updates on social media and spark some interest!

Advice for Buying Real Estate in Montenegro

Deciding whether or not to buy real estate in Montenegro depends heavily on personal priorities and preferences. It is important to weigh the importance of each factor before making such a significant purchase. It’s equally important not to rush in order to not regret it later saying, “No one warned me that a 50-liter boiler only fills half the bathtub!”

If you’ve decided that this country's climate, landscapes and charming restaurants appeal to you and that the prices are right, it makes sense to minimize the negative factors. For instance, if well-developed infrastructure is important to you, avoid buying a home in a rural area or small village; instead, focus on more vibrant cities. Thoroughly research the features of specific residential complexes or cottages, and plan how you’ll handle heating and other household issues.

And remember, some drawbacks might actually be advantages for certain people. Life may be slow-paced, but it’s full of soul — a stark contrast to the hectic rhythm of a big city.

When discussing Montenegrin real estate, people often mention the climate and prices. However, there are many more factors that affect personal comfort. Try to analyze them seriously so that you can later say, “I made the right decision!”