A property transaction in Montenegro: notary, cadastre and the purchase tax

A Montenegrin transaction follows the continental European model: a notary executes the contract, and the right arises from the moment of entry in the cadastre. The scheme is clear, and the main problems arise not in it but in the condition of the property itself.

The order of steps

• A cadastre extract — the base document. It shows the owner, the area, encumbrances, and whether what was built matches the permit.
• A preliminary contract and deposit — a normal stage; the terms for returning the deposit are stated expressly.
• A notarial sale contract — the notary verifies the seller's title and executes the transaction.
• Cadastre registration — before it the buyer is not the owner.
• Transfer tax is paid by a buyer of a resale property at the set rate on cadastral or contract value; a new build from a developer is subject instead to VAT included in the price.

The main local feature: legalisation

Montenegro built faster than it registered for several decades. As a result a significant share of coastal properties have discrepancies between what is built and what was permitted: an extra floor, an extension, a changed area. The state has run legalisation campaigns, but far from every case is closed.

• What that means for a buyer: a property can be in the cadastre but flagged as not matching its permit, and that affects both the price and the ability to resell.
• What to check: that the actual area and number of floors match the documents, that a building permit and occupancy certificate exist, and the legalisation status where legalisation was carried out.
• Who checks: your lawyer, not the seller's agent. A notary executes the transaction but does not guarantee that you understand what you are buying.

Land and a company

A foreigner buys an apartment in their own name. A plot of land, a house with land and agricultural land go through a company registered in Montenegro. The company is quick and cheap to set up, but it acquires a life of its own: accounting, reporting, annual costs. That belongs in the cost of ownership rather than being treated as a one-off formality.

Transaction costs beyond the price

• Transfer tax, or VAT inside the price of a new build.
• The notary's tariff on a scale by transaction value.
• A lawyer — a required line, not an option.
• Agency commission, if the property was found through an agency.
• Maintaining a company, where the purchase goes through one.