Property Taxes in Montenegro
Unlike the real estate transfer tax, property taxes are an annual charge levied by municipalities in Montenegro. They are based on the current market value of land, commercial, and residential property, as assessed by the local tax office, and are the responsibility of all property owners within the municipality.
KEY TAKEAWAYS
- Property taxes are calculated using the property’s assessed value, updated annually on January 1st for the following year.
- Property tax rates in Montenegro do vary by municipality, as each local government sets its own rates.
- If property taxes are unpaid, municipalities can place a lien or similar legal claim on the property until the taxes are settled.
- When real estate is owned as a joint tenancy (with equal rights) or as a tenancy in common, each co-owner is liable for property taxes.
Who pays Property Taxes?
Individual home owners, as well as sole proprietorships, partnerships, and limited companies owning real estate in Montenegro, are required to pay property taxes. This annual tax is assessed on all types of property and land, including primary residences, second homes, and rental real estate. However, tenants are not responsible for paying property taxes.
Property Tax Rates
Property tax rates vary significantly between cities and municipalities throughout Montenegro. In layman’s terms, your annual property taxes are calculated by multiplying the assessed value of your property by the property tax rate, which typically ranges from 0.25% to 0.50%.
- Your primary residence refers to the home in which you are registered as a (temporary) resident of Montenegro, such as a house, condo, or townhouse.
- Secondary residences are defined as all properties other than your primary residence, including rental properties and those owned by property holding companies.
Tax Allowances and Exemptions
Owner-occupied primary residences qualify for a 20% property tax reduction. You may also receive an additional 10% reduction for each registered household member related to you by marriage or blood, up to a maximum discount of 50% of your total property tax bill. Property owned and used by nonprofits, charitable foundations, or religious institutions for charitable, educational, or similar purposes is exempt from property taxes.
Legal entities or individuals engaged in agriculture or food processing that are listed in Montenegro’s Farm Business Register can claim a farm property allowance equal to 90% of their annual property tax. Hotels and restaurants occupying structures that comply with Montenegro’s building code can legally reduce their property taxes by up to:
- 15% for 3-star establishments
- 30% for 4-star hotels or restaurants
- 70% for 5-star venues
Paying and Filing your Property Taxes
Property values in Montenegro are assessed by the municipal assessor on January 1, and tax bills are usually issued on April 30. Payment is required in two equal installments, due by June 30 and October 31. If your tax bill is issued after April 30, the deadline for payment is extended by the corresponding number of days following the bill’s mailing.
Whenever real estate is purchased, the buyer is required to file a report with the local Tax Administration within 30 days of transferring the title deed. Failure to comply may result in the following fines:
- 250,00€ to 2.000,00€ for individual taxpayers
- 500,00€ to 3.000,00€ for sole proprietorships
- 2.000,00€ to 20.000,00€ for corporations
Upon delinquency, liens may be used to collect the tax.
Residents of Montenegro filing their annual property taxes must provide their Unique Master Citizen Number (JMBG), a 13-digit identifier, whereas non-residents are assigned a temporary tax identification number (TIN) to track the payment. Corporations filing property tax returns must also provide their company tax identifier. Electronic filing is available in certain municipalities.
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