In Montenegro a new build from a VAT-paying developer and a resale flat are taxed differently, and the 2025 legalisation law has made the legal status of the building a deal-breaker.
In Montenegro the tax route depends on who sells, and the legal route depends on whether the building is properly registered. Both have changed recently, so older guides are out of date. The points below are summarised from agency, law-firm and press sources as of 2026 and should be confirmed with a Montenegrin lawyer.
Tax: two different routes
When you buy a new property directly from a VAT-registered developer, the price reportedly includes 21% VAT and the buyer does not pay the property transfer tax. Confirm the VAT treatment in your contract, because Montenegro changed some VAT rates in 2024. On the resale market the transfer tax has been progressive since 1 January 2024, so the old flat 3% figure is out of date: 3% up to €150,000, then €4,500 plus 5% of the amount above €150,000 up to €500,000, then €22,000 plus 6% of the amount above €500,000. For example, a €200,000 resale costs €7,000 in transfer tax. Notary fees follow a state tariff that was reportedly updated in April 2026 and are usually under 1% of the price, and the agent's commission is typically around 5% and often paid by the seller. Agencies put total buyer closing costs on resale at roughly 4% to 8%; treat that as an estimate.
The legalisation law changes the risk
The Law on Legalisation of Unauthorised Buildings entered into force on 14 August 2025. An unauthorised building is one built or extended without a permit or outside its conditions. The official reading reported in the press is that no unauthorised building may be transferred, and many notaries have become cautious about deals where a legalisation annotation appears in the cadastre. The law gave owners six months to start cadastral registration. In January 2026 the government submitted urgent amendments to extend that window to twelve months, allow some actions such as leases and mortgages despite an annotation, and open a route for buildings with a valid permit but no final use permit. We could not confirm whether they have been adopted, so check the current text with a lawyer.
New build: what to check
- That the developer holds a valid building permit and that the building is, or will be, registered in the cadastre with each unit as a separate property.
- That the use permit exists for a completed building, since the gap between a built building and a use permit is exactly where the new law bites.
- The contract's completion date, penalties and warranty terms. We did not find a uniform statutory warranty regime, so rely on what is written in the contract and ask a lawyer.
- For off-plan, staged payments tied to construction milestones and a bank guarantee or escrow where available, since we did not find a mandatory buyer-payment protection scheme.
Resale: what to check
- A current cadastre extract showing ownership and any encumbrances or legalisation annotations.
- Whether every part of the building, including extensions and terraces, is covered by a permit.
- The condition of the building and renovation costs, which vary too much to quote responsibly.
How to decide
- Choose new if you want a clean paper trail and you can verify the permits, the use permit and the cadastre registration for the unit.
- Choose resale if the location or an older stone house matters more, but only after the lawyer confirms legal status and the transfer is not blocked by an annotation.
- If the structure has any informal extension, treat that as a pricing and legal issue, not a cosmetic one.
FAQ
Do I pay transfer tax on a new build in Montenegro? Agencies report that a buyer from a VAT-registered developer does not, because 21% VAT is already in the price; confirm in the contract. What is the transfer tax on resale? Progressive since 2024: 3% up to €150,000, then 5% and 6% on the portions above. Can I buy an unlegalised building? The press-reported official reading is that unauthorised buildings may not be transferred; amendments were proposed in January 2026, so check the current status. How do I check a building? Request a cadastre extract and the permits and have a local lawyer review them.
How we help
We help you compare specific new-build and resale options, and we work with a local lawyer to check permits, cadastre status and contract terms before you pay. Informational only, not legal, tax or investment advice; rules change quickly in Montenegro, so confirm the current position for your property before relying on it.