Procedure for buying a property and expenses

Procedure for buying a property and expenses

7 steps on how to buy a property in Montenegro:


1. Choosing a future house or an apartment

Once you have chosen an apartment, house or villa on our website, please contact us for a more detailed description. We will also be happy to answer any of your questions about the object you chose or suggest other options within your budget. Be sure to tell us the dates of your visit to Montenegro so that we could meet you and take you to the hotel or an apartment. In the next few days we can show you the properties you like – usually we show around 3-5 properties per day (so that you could have enough time to explore the properties).

2. Preliminary contract and deposit

Once the property is selected, and all details are agreed with the seller, you should make a deposit. Usually it is a few percents of the total value of real estate, or 5,000-10,000 euros. The deposit guarantees the buyer’s intention to purchase real estate, and the seller can reserve it for the buyer and stop offering it to the other potential customers. When making a deposit, a preliminary agreement is signed between the buyer and the seller in the presence of your agent; from that moment the property is considered to be reserved for the buyer until the signing of the main contract. If the buyer subsequently changes his decision, the deposit remains with the seller. In the opposite case: if the seller’s plans change, the deposit in double size is returned to the buyer.When signing the main contract, the total value of the property is reduced by the amount of the deposit paid by the buyer initially. This is the generally accepted world practice of making real estate purchase.

3. The main contract

To sign the main contract for the selected property, the buyer will need to provide a valid passport. It is important to take into account that the period of validity of the document must be at least 6 months. The procedure for signing the main contract according to the Montenegrin law should be carried out in the presence of a licensed notary and a judicial interpreter who also holds a valid license. Our company organizes a meeting at the notary’s office and provides an interpreter, as well as a package of documents necessary for purchase. Each notary bears full responsibility for the documents he or she certifies with criminal liability in case of illegal actions. So, the notary certifies the contract (and other related documents), and from that moment the transaction/purchase is considered to be finished. If the deposit has not been yet transferred by the seller to the buyer, this is usually done in the presence of a notary and representative of our company, and the fact of transfer is mentioned in the contract. It is considered to be a partial payment for the property.

4. Payment under the contract of sale

The transfer of the main amount according to the contract is made by bank transfer. The money transfer can be done either by transfer to the seller’s account from a foreign bank, or by transfer within the country, i. E. from the Montenegrin bank to another Montenegrin bank, where the seller has an account. In an another case, the buyer will have to open an account in Montenegrin bank (a passport is needed). In order to transfer funds from your country to Montenegro, it is necessary to provide a notarized and translated contract of purchase of real estate to your bank. The main money transfer is usually carried out within 30 days from the date of signing the contract, unless otherwise is agreed: for example, payment in parts – in  this case the payment schedule is described in detail in the contract.

5. Re-registration of property rights in the cadastre

Only after the fulfillment of all the obligations of the buyer and the transfer of funds to the account of the seller, i.e. payment of the full cost of the property, the seller can issue to the buyer Clausula Intabulandi (confirmation). In other words, this document speaks about the absence of any kind of claims between the two parties. The buyer provides this paper together with the contract of purchase in the cadastre for re-registration of ownership. At this stage, the presence of the seller is not necessary. The law prescribes a maximum period for re-registration of ownership rights – 60 days. The right to provide the full package of documents to the cadastre lies with the representative of the company-agent.

6. Purchase Costs

  • Real estate turnover tax (3%)
    At the time of registration of the contract, a notary sends one of the copies to the local branch of the tax inspection. An expert in the tax authorities assesses the tax value of real estate in accordance with current prices in the real estate market (usually the value of the real estate is taken from the contract) – that is 3% of the total value of the purchased property. The buyer must pay this tax within the next 15 days. The penalty charged for each day of delay is – 0.03% . Tax authorities operate independently from the Cadastre. When buying a property directly from a developer company which is a VAT payer, you don’t need to pay the tax – the developer company/investor is obliged to pay 21% VAT to the state.
  • Notarial services
    Notary fees when signing the main contract are as follows:

The cost of the property + Notary fee (+ 21% VAT)

50,000-80,000 euros = 350 euros

80,001-120,000 euros = 450 euros

120,001-170,000 euros = 500 euros

170,001-220,000 euros = 550 euros

220,001-270,000 euros – 600 euros

270,001-320,000 euros = 650 euros

If the value of the property is above 320,000 euros, with an increase in the cost for every 10,000 euros, the amount of the notary fee is increased by 10 euros. It is also necessary to take into account that the VAT is not included in the amount of the tax, 21% VAT is added separately. The maximum notary fee is 5,000 euros.

  • Judicial translator services
    When signing the contract, there must be a judicial translator present. Interpretation costs 100 euros per hour (usually 1 hour is enough), and the translation of the contract is 20 euro/per page (the standard contract is 7-9 pages).
  • Power of Attorney (optional)
    If for some reason you can not attend the real estate purchase, you can write out a power of attorney to your agent or lawyer to make a deal on your behalf. The power of attorney and its translation cost usually around 100-120 euros.
  • Attorney services (optional)
    If you plan an expensive purchase and you want to protect yourself as much as possible, we advise you to take an independent lawyer who will represent your interests in Montenegro. The services of a lawyer usually range from 1,000 to 1,500 euros, depending on the cost of the object.

7. Obtain ownership paper

After the completion of all procedures in the Cadastre and the tax inspection, the real estate acquirer or any of its authorized persons acting on the basis of the power of attorney, together with the seller of real estate, receives documents on the transfer of ownership to the new owner. At this point, both the seller and the buyer (or his representative) leave their signatures in the register of transactions in the Cadastre, and thus confirm that they received a Decision about the transfer of real estate rights to the new owner.

After receiving the decision and after a lapse of 10 days, allocated for appealing the Decision on the transfer of the right, the new owner can receive the so-called “List nepokretnosti”. In other words, just an extract from the register proving the buyer’s ownership of immovable property on the territory of Montenegro. In fact, the buyer becomes the owner already at the stage of signing the contract and after fulfilling his obligations to pay for the acquired property and receiving from the seller “Clausula Intabulandi”. But legally the buyer of the object is considered to be the new owner of the acquired housing only after the registration of the contract in the Cadastre.


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