FAQs
Buying A Property
Owning A Property / Living in Montenegro
Selling A Property
What is the process for buying a property in Montenegro?
Purchasing a property in Montenegro is a simple process and we do everything we can to ensure your purchase runs as smoothly as possible. An outline of the process is set out below, but please email info@montenegroprospects.com for a in depth buying guide.
- Negotiate a price acceptable to you and the vendor.
- Place a deposit (between 1000 euros and 10% of purchase price) to take the property off the market, and a reservation agreement would be signed by both parties. The deposit would usually be held by the vendor
- Open a local bank account
- Appoint a lawyer (licensed in Montenegro) in Montenegro or UK to act on your behalf
- The balance of your deposit (normally 10%) is paid within 10 days
- The contract is signed by you, or your lawyer (via Power of Attorney) in the notary`s office in Montenegro and the remaining balance is immediately transferred from your bank account (in Montenegro or your home country) to the vendor
- 3% purchase tax is paid. (The value of the property is determined by the Inland Revenue office).
- Papers are submitted to the local land registry
- The property is then registered in your name
- We do not charge a fee to buyers
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Is it different if the property hasn't been built yet (it's off plan)?
Yes it is a little different to buying a completed property, in that paying for the property will usually be in instalments, and everything planned needs to be specified in advance. An outline is below. Please email info@montenegroprospects.com for a full buying guide.
- Negotiate a price acceptable to you and the developer
- Place a deposit on the property to reserve it (usually around 5000 euros), and a reservation agreement would be signed by both parties. The deposit is usually held in a Client Account.
- Appoint a lawyer (licensed in Montenegro) in Montenegro or UK to act on your behalf
- Pre-contracts and specifications are drawn up by the developer and your appointed lawyer will sign once approved by you. Upon signing, this is the point at which the first of staged payments are due
- A typical example of staged payments on an off plan property would be
30% Pre-contract (minus deposit)
30% Foundations complete
30% Roof complete
10% Key handover and snag list
- The final contract or annex is signed by you, or your lawyer (via Power of Attorney) in the notary`s office in Montenegroand final payment is immediately transferred from your Montenegrin bank account to the vendor
- Papers are submitted to the local land registry
- The property is then registered in your name
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What kind of rental yield can I expect?
Tourism in Montenegro is still growing at a fast rate and the rental market is not fully developed yet. 2009 saw rental yields of between 4 and 8% for apartments and villas on the coast. Because of the recent drop in property prices and the continues increase in demand for rental properties, a rental yield of 6-8% can be expected.
Do I need a visa to visit Montenegro?
Citizens of most European countries (Austria, Belgium, Greece, Denmark, Estonia, Italy, Republic of Ireland, Cyprus , Lithuania, Estonia, Luxembourg, Malta, Hungary, Germany, Poland, Portugal, Slovakia, Slovenia, Finland, France, Netherland, Czechoslovakia, Spain, Sweden, United Kingdom, Bosnia, Croatia, Ukraine) do not need visas to enter Montenegro and can stay in the country for up to 90 days. Citizens of Russia and Albania also do not need visas but they can stay in Montenegro up to 30 days. Serbians do not need visas to enter Montenegro.
Foreign citizens coming from other destinations are able to check at http://www.mip.gov.me/en/index.php/Visas-for-Foreign-Citizens/
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Are there any taxes to pay?
The most important is purchase tax, which is 3% of the value of your property – valued by the tax office regardless of the purchase price on the contract. Purchase tax is payable as soon as the main contract is signed. It is recommended that you pay the tax immediately as interest rates will charged for every day of delay. In some cases purchase tax is not payable for off plan developments but make sure that you check with the lawyer if this law applies for the property you are buying.
Once you are the registered owner of the property you will need to pay an annual property tax. The amount depends on the size and location of the property – for example, the tax for a two bedroom apartment would be approximately two hundred euros per year. You will receive the bill in your mail usually in the Spring. It can be paid in the Tax Office (Poreska Uprava).
Income tax would also be levied on any rental income. For a full guide on renting out a property, please email info@montenegroprospects.com
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How do I find a good lawyer to act on my behalf?
This is the one person that you appoint to act on your behalf so how do you find out who you can trust? Of course, there’s no foolproof answer, but here’s a few pointers…
- You need to use a lawyer certified to practise law in Montenegro. There are very few living outside of Montenegro.
Lawyers in Montenegro work in general practice with a wide remit, they are not solicitors specialising in conveyancing.
- Use an independent lawyer to handle your property purchase. Find out who the seller is using so that you don’t use the same one and be wary if the agent can only recommend one lawyer. If they can provide a choice, this can be more reliable.
- Another option is to try to get a recommendation from another buyer. Many lawyers have acted on behalf of other foreigners and can be more accustomed to the communication required by foreigners. Just being able to speak English is not necessarily enough.
- Ask the lawyer questions so that you are clear on what service they will provide. It is not the same in every country. For example, in Montenegro it is normal to give power of attorney to a lawyer to sign contracts on your behalf, but it is not normal for a local authority search or similar to be done. If you are concerned about the land surrounding your prospective purchase, you would need to specify to your lawyer to check if the land in front has already got planning, what could be built there, etc.
- Giving your lawyer power of attorney (POA) to sign contracts, access your Montenegrin bank account, etc does make sense, so that you do not need to be present. The signed POA must be ratified in the local court, and costs approx 30 euros. If you do not have time to do this, you can sign the POA in front of a public notary in your own country and send by courier to your lawyer in Montenegro. In the UK, you must also have the document stamped with an apostil by the Legalisation Office for it to be valid. For full details of the process there is more information at apostillisation.
- The POA to buy a property has usually been worded as such. It may also have an expiry date. When you come to sell the property, you will most likely have to sign a new POA permitting your lawyer to sell the property on your behalf.
- Insist on a contract in a language you are fluent in, which should be translated by a court appointed translator. Expect to pay for this. An alternative is to sign a waiver that you have understood the contents of the contract (when not in your mother tongue), which of course is riskier and you can use your own judgment if this is appropriate in your case.
- Do keep a copy of the deeds, ownership list (List Nepokretnosti), contract and any other documents related to the property yourself. Check thoroughly that everything has been recorded correctly. It has been all too common for part of the plot such as a courtyard or driveway to have been omitted from the ownership list by mistake. It is far easier to rectify immediately after the event rather than when you come to sell it in years to come.
These are just a few of the more common queries or problems we encounter, so hope these help and feel free to contact us for more info.
Can I use my solicitor in the UK?
Any lawyer you use must be licensed to practise law in Montenegro. To our knowledge there are none in the UK at the moment. We can provide you with a list of lawyers who are experienced in acting for foreign clients buying and selling property in Montenegro. All are wholly independent from us.
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Can I sign a contract or power of attorney document in the UK?
For a UK client who wants to sign their contract, precontract or Power of Attorney in the UK, the procedure is as follows:
1. Sign the document at a public notary’s office; the notary is legalising the UK citizen’s signature. A list of notaries can be found at: http://www.thenotariessociety.org.uk/ The notary will charge approx £120 for each document.
2. The Legalisation Office (part of Foreign and Commonwealth office) then needs to issue an apostille (legalisation certificate) which legalises the notary’s signature. This can be done over the counter or by post. Some notaries will send off the documentation for you.
The legalisation office has recently moved from London to Milton Keynes and is now at:
437 Silbury Boulevard
Milton Keynes
MK9 2AH
Tel: 01908 295 111
Full details are on their website.
http://www.fco.gov.uk/en/about-us/what-we-do/services-we-deliver/legal-services/legalisation/
The fee for legalisation of each document is £28.80.
Please check with your lawyer, for some countries you will not need to have an apostille.
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I'm concerned about currency fluctuations. How do I minimise my risk?
Using a foreign exchange broker when transferring your funds abroad or trading foreign currencies, you could save hundreds if not thousands of pounds and even more if you forward plan your foreign currency rate.
Whether you are buying, selling or investing in property abroad, foreign exchange transfers are key to maximizing the value of the currency you are sending. Fluctuations in the exchange rate can have a huge impact on the overall cost of your property purchase, as the example below demonstrates.
A property costing €250,000 purchased on 26th August 2009 would have cost £218,340 . However the same €250,000 purchased on the 26th September just one month later would have cost £229,568 – a huge difference of £11,228.
A currency broker is a cost effective alternative to the high street bank, offering a free service including better rates of exchange, no commissions and will often pay for the cost of your international transfer which may total up to £40 per transfer.
There's lots of companies out there. Can you recommend any foreign exchange firms?
We recommend contacting John Paul Georgiou, a Foreign Currency Broker at Voltrex, a FSA regulated financial services company that counts numerous major investment banks and hedge funds amongst its clients. VFX is the foreign exchange arm of Voltrex Ltd
The company is a leading broker in the market and most uniquely offers an online trading platform which allows you the client to view real time prices, trade online, send international payments, place orders, view previous deals, view up to date charts and market commentary – essentially manage your whole foreign exchange exposure online yourself. Of course it goes without saying that you can still telephone John Paul to do all of the above for you. John Paul has been helping our clients since 2004 and offers an exemplary service. It’s free to set up an account, you can save a significant amount of money and in addition you do not pay any commission or transfer costs.
Please feel free to contact John Paul on +44 (0)20 7959 6851
john.georgiou@voltrexfx.com
www.voltrex.com
Alternatively you can register online as below.
http://www.voltrexfx.com/help/OpenAccount.aspx?ib=montenegroprospects
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How do I get a residency permit?
You first need to submit a request for a residence permit to the Ministry of Foreign Affairs, or to the Montenegrin Embassy or Consulate abroad.
A Temporary Residence permit can be approved if the foreign citizen wants to work in Montenegro, study, or join their family. There can be other reasons that are determined by the Montenegrin and/or International laws. A temporary permit lasting up to two years can be issued, as long as the foreign citizen submits proof that he/she can support themselves, has health insurance (from the country of origin), and he/she has a valid reason to apply for a residence permit. Also, proof that the person applying for residence has not been criminally prosecuted has to be submitted.
Permanent residence is approved if the foreign citizen has spent more than 5 years in Montenegro (with a temporary permit), has been married to a Montenegrin citizen (or to a foreign citizen who has permanent residence) for more than 3 years, has Montenegrin origin or is a child or close relative to a Montenegrin citizen or to a foreign citizen who has permanent residence in Montenegro.
There is some brief information on obtaining residency permits at http://www.mip.gov.me/en/index.php/Consular-functions/citizenship.html. For a copy of the law pertaining to residency, please email us at info@montenegorprospects.com
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What kind of work permits exist in Montenegro?
A foreign citizen can be employed in Montenegro if he/she has a work permit and approved residence permit. Work permits are issued by the Employment Bureau, and they can be: a personal work permit (Licna Radna Dozvola) that is issued permanently for foreigners who have permanent residence or for refugees, a one year work permit, a seasonal work permit (valid for 8 months)
Work permits can be refused if the quota set by the authorities for that year has been exceeded.
How do I get a work permit?
1. Employer submits the request form Z3 to employ a foreign citizen to the Employment Bureau – local office (Zavod za Zaposljavanje). With the request the employer needs to also submit:
- Registration documents of the Company (Privredni Sud i Monstat) both originals and verified copies
- Copy of the passport of the foreign citizen, translated and verified
- Proof of a qualification degree which is translated and recognised in Montenegro (not required if the employee to be employed does not need a degree)
- Official application for new employee (Form E1)
- Proof that fee for work permit has been paid
Fees for work permits
- Personal Work Permit -165 EUR
- Annual Work Permit - 110 EUR
- Seasonal Work Permit – 90 EUR
2. Employment Bureau issues the work permit.
3. With the Work Permit the foreign citizen applies for a residence permit.
4. When the residence permit has been approved the Labour Contract has commenced, and the employer starts paying health and pension insurance for the employee.
5. Form that states that the foreign citizen has started (or stopped) working has to be submitted to Employment Bureau
Any local office of Employment Bureau can provide all information regarding work permits and more information on the law concerning work permits can be found on this link http://www.gom.cg.yu/files/1175075336.pdf
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What are the journey times from Dubrovnik, Podgorica and Tivat airports?
All airports are convenient for the coast. Dubrovnik airport is approximately 14km from the Montenegro border, and it takes about 30 minutes to drive from the airport to Herceg Novi, 80 minutes to Kotor, 60 minutes to Tivat. From Tivat airport, it takes about 15 minutes to drive to Kotor, 30 minutes to Budva, and 90 minutes to Bar. Podgorica airport is an alternative for anyone visiting the southern part of the coast. Through the tunnel, it takes only 30 minutes to Sutomore, and well under an hour to both Petrovac and Bar.
Who offers property insurance in Montenegro?
There are two companies offering insurance in Montenegro:
Lovcen Osiguranje will insure your property for 1 EUR per sqm if the property is inhabited and 1,5 EUR per sqm if the property is only used occasionally.They have offices in all major towns throughout Montenegro. You will need to bring your Passport or some other ID, and to know details of your property (size and similar, best to take ownership list – List Nepokretnosti). More information on http://www.lovcenosiguranje.co.me/eng/property_insurance.php
Hiscox Insurance offer property insurance in various countries including Montenegro. Insurance can only be provided through a broker in the UK. We have negotiated excellent terms for Montenegro Prospects clients with Underwood Insurance. As a guide, a 2 bedroom apt with €10k worth of contents, plus public liability and accidental damage will cost approx €100/year. Contact info@montenegroprospects.com or Overseas@underwoodisl.co.uk quoting "Montenegro Prospects" or visit www.overseaspropertyinsurance.co.uk for more information.
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How do I pay utility bills?
All water, electricity, rubbish, phone, internet, cable tv bills can be paid in the local post office or bank. Alternatively, water and electricity can be paid directly to the company. Some banks offer the possibility to automatically pay your phone or electricity bills from your bank account.
You can find more details regarding the price of electricity on this link http://www.epcg.co.me/en02_01.html
More information on the phone and internet options can be found at http://www.t-com.me/
Can I get satellite or cable TV?
There are a few Cable TV operators in Montenegro : Total TV, Extra TV and BBM
How do I get a copy of the ownership list or deeds of my house?
The easiest way to get a copy of the ownership list would be to contact your lawyer. You can also obtain a copy direct from the Land Registry office (usually in the Municipality office). For a stamped copy you would need to pay 13 EUR fee.
Alternatively you can check it on line at http://www.nekretnine.co.me/uprava2/mne/Katastarski_podaci3.asp
There are two ways to search:
1. By Owner – you will need the identity number of the owner (usually the passport number if a foreign citizen with zeros in front of the number). This is called the "nosioci prava na nepokretnosti".
2. By Property – First you need to click on the town, then on the part (or village) of the town (K.O. – katastarska opstina) and finally you will need the number of the ownership list (broj Lista Nepokretnosti) or the number of the land parcel (Broj Parcele) on which your property is located.
The data is updated every month or two.
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Can I find details online about DUPs?
Details about DUPs (Detailed Urban Plans) in the Kotor area can be found at
http://www.cg.opstinakotor.org/index.php?option=com_content&task=view&id=785&Itemid=1
Is there a double taxation treaty between Montenegro and my country?
Montenegro has so far signed 42 double taxation treaties with various countries on income and property.
36 treaties (6 are pending) are now in force with: Albania, Belarus, Belgium, Bosnia and Herzegovina, Bulgaria, China, Croatia, Cyprus, Czech Republic, Denmark, Egypt, Estonia, Finland, France, Germany, Hungary, Iran, Italy, Korea, Kuwait, Macedonia, Malaysia, Moldova, Netherlands, Norway, Poland, Romania, Russia, Slovakia, Slovenia, Sri Lanka, Sweden, Switzerland, Turkey, Ukraine and United Kingdom. For details of bilateral relations between your country and Montenegro visit http://www.mip.gov.me/en/index.php/Bilateral-Relations/
How do I register my vehicle?
Foreign citizens in Montenegro who have received a temporary residency permit may register a purchased car for six months.
For this you need:
• Copy of certificate of registration of the vehicle (on the previous owner’s name)
• The contract of sale and purchase
• Your passport and a copy of the photopage and the page with the residency permit
• Original and copy of the police registration, where you have been assigned an unique citizen number
Costs depend on the characteristics of your car.
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I understand it’s a buyers’ market so how do I make my property stand out?
- First, do an appraisal of the market. What are similar properties on the market for and crucially, what are they selling for? Contact info@montenegroprospects.com for the selling prices in your area. Pitch your property at the right price but with enough room for negotiation.
- Find out who is buying in that area and approach a proactive agency who have the experience and knowledge in approaching that buyer market.
- Think what attracted you to it in the first place? Tell the agent, so that it can appear in brochures and be communicated to prospective buyers. Be honest with yourself…What’s the worst thing about the property? Is there anything you can do to fix it or lessen the impact?
- State what rental yield you are achieving (if applicable).
- Take great photos of the property inside and out. Many buyers choose which properties they want to view based on a few photos on an agents website. Unfortunately, these photos often do not show the property in its best light and buyers discard the property at the very first stage.
If you walked into a cluttered, smelly shop, and found a creased, dirty shirt on the floor in your size, would you buy it? The answer varies – some wouldn’t have walked into the shop in the first place, others would see it as a chance for a bargain and demand a large discount, but very few would be happy to pay the price on the label. There are a number of properties on the market that are cluttered and smelly and expect to achieve the asking price! At the height of the market (the equivalent of first day of the sales, if we’re still shopping), you had to buy it like that. Now that buyers are the only ones in the shop, they can take their time and get excellent quality for a very good price.
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What can I do to spruce up my property to help it sell?
There are a number of things you can do at no or little cost that will help to show your property in its best light. Here are a few of the basic ones:
- Clear clutter away
- Clear away most personal items (clothes, lots of photo frames etc) but important to leave the odd item ( eg. one coat hanging up, one photo frame on a shelf so that it looks lived in and not sterile)
- If the room looks cold, place a rug on the floor, a throw over a bed or sofa, put curtains or blinds up at the window
- Make beds up, as if you are expecting guests any moment
- Use air fresheners – ideally the plug in type – this can do wonders if the
property is not inhabited, and is especially important in older properties
- When styling photos for brochures and websites, you can increase the feel that this is a lived in, loved property by - laying tables (even at the most basic level, with a couple of wine glasses and some olives)
- place fresh colourful items, (eg a vase of flowers or a bowl of fruit) to convey freshness and life
- Put out sunloungers round the pool, chairs on the balcony etc
- A wide angle camera will need to be used for interior shots, just to include the whole room. Most agents have one.
- In general, take photos in the morning or afternoon, not at midday, when the light is harsh. Turn the flash off, and turn the lights on.
- Take photos of one room leading to another, of the living room leading onto a balcony etc. It helps for buyers to see the layout and how the property fits together.
The idea is you want people to be able to picture themselves living there, to feel like they could move in now and be happy. Call in to see us or email info@montenegroprospects.com for further advice specific to your property.
If you have a question that has not been covered here, please email info@montenegroprospects.com for a quick response.
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