Tax when buying property. When making a purchase and sale of real estate, in the case of its acquisition on the secondary market, a one-time tax is provided in the amount of 3% of the established value. The amount of tax depends on the estimated market value of this category of objects.
When registering a real estate purchase and sale transaction contract with a notary, information about the transaction with the attachment of one copy of the contract is sent to the local tax office. Tax authorities operate independently of the cadastre. The tax service expert examines the established price of the object and makes a decision on a one-time tax in the calculation of 3% of the total market value of the object.
The deadline for payment of this tax is set within 15 days from the date the tax authority made the decision to pay the tax. In case of late payment, a penalty in the amount of 0.03% is charged for each day over the specified period. Therefore, if you have not received a receipt for the payment of tax by mail, we recommend you to clarify this issue in a tax.
In the case of the acquisition of real estate directly from the developer, who pays the VAT, the buyer of the newly built object is exempt from paying the tax. If the developer for some reason does not pay VAT (for example, an individual), the buyer must pay a one-time tax in the calculation of 3% of the total market value of the object.
Annual property tax. Taxes on real estate (construction objects, buildings) are established by the relevant Laws of Montenegro. In accordance with the provisions of Article 13 of the Law on Real Estate Taxes, approved by the Parliament of Montenegro, it is determined that tax rates and payment procedures are established by decisions of local governments for real estate objects located on their territory, not later than 30th of April of the current year.The tax is paid by the taxpayer in two periods in two equal parts: the first is not later than 30th of June, the second is not later than 31st of October of the current year in accordance with the calculations of the local government body.
In accordance with the provisions of Article 7 of the Tax Law, real estate tax liabilities start on January 1st of the current year, to which taxes are established and in which they are paid.
Tax rates, in accordance with the provisions of Article 9 of the Act, are set in direct proportion to the established market value of taxable real estate and can range from 0.25% to 1.0% of its value depending on the type and class of the property, as well as the destination of the territory and other factors. At the same time, the provisions of Article 9a of the Law provide that local governments have the right for certain buildings or objects to lower or raise tax rates in some special cases compared to those specified in Article 9.
If it is necessary to verify the correctness of calculating the amount of real estate tax, one should rely simultaneously on the provisions of the Law on Real Estate Taxes and the Provisions on rates and methods of tax calculation approved by the local government body. The local government sends the tax payment notification to the taxpayers by mail, however, sometimes it is better to personally consult the department of the payment authority personally in due time, since violation of the payment deadline entails additional penalties.
It should be added that for residential premises and business facilities located in special purpose areas in tourist areas, there is a tourist tax on real estate in accordance with the provisions of Article 42z of the Law on Tourist Organizations (attention: not to be confused with the tourist tax!). It is usually included in the notice of payment of taxes.