Real Estate Investment

Montenegro is an anomaly in the European real estate market. The investment returns for those who invest in Montenegrin real estate are among the highest in the entire continent. The trend is rising thanks to the tourism boom that this Balkan country has been experiencing for the last few years. In addition to the growing tourism market, another driver of the real estate boom in Montenegro is its citizenship by investment program, which requires that the applicant invests in a tourism real estate project.

There is something for every taste among the Montenegrin real estate offers. You can invest in luxury villas on the coast, invest in modern properties in the capital, or choose to buy a property in the resorts of the northern part of the country.

If you are wondering about the taxes associated with investing in real estate in this advantageous jurisdiction, you will be pleased to know that taxes on the transfer of land, property, and capital gains are on average twice as low as in the rest of Europe.

Perhaps the most challenging thing about doing business in the Montenegrin real estate market is that all official documentation is always required to be filled in Montenegrin language. If you want to make sure everything is right, it is highly recommended to count on our team´s help.

Montenegro has a bright future ahead, mostly because tourism projections (despite the COVID-19 pandemic) expect stable growth in the coming years. But that also means that maybe property prices will start to rise, therefore, now is the best time to enter the real estate market for lower prices than the European average but getting better returns on your investment.

The rush is dictated by a potential rise in prices as the Montenegrin market develops and the time runs out to file a CBI application. You can receive a Montenegrin passport through your real estate investment only until January 2022.

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Although generally lower than in the rest of Europe, prices and particularities in Montenegro depend on what you're looking for. Are we talking about a residence in the capital? A luxury villa on the coast? Likewise, it is always good to work with someone with expertise. The best prices and estates are sold quietly, and foreigners are seen as an easy negotiation, so to get the best price possible, it is vital to work with a real estate agent.

These are, broadly, the main types of properties for sale in Montenegro.

• Apartments: Podgorica has plenty of multi-story building apartments. On the coast, apartments are more luxurious as they are usually complexes with pools located within a walking distance from the beach.
• Townhouses: They are generally located in the city suburbs, have a size of more or less 2,000 sq. ft, and usually are entirely new. 
• Villas: They are even bigger than townhouses, more luxurious, and closer to the city center.
• Land plots: There are plenty of land plots in Podgorica and its metro area to build what you want and how you want it.

Similarly, the locations of the real estate fall into three categories:

• Tourist areas on the coast.
• Podgorica.
• Small towns, especially in the north.

This combination of classes will determine the price ranges and characteristics of the real estate you might be looking for.

However, if we look at the real estate market’s investment, it’s mostly targeted at touristic real estate. This has two reasons. First, tourism drives Montenegro’s economy. Second, the CBI program requires an investment in tourism, which has increased the number of development projects. Similarly, one of the best ways to obtain profit from real estate investment is through rental income. As the prices are low for European standards, it’s easy to find someone to rent your estate to, especially during the tourist season (from May to September). Moreover, the prices are increasing, which means you can get an incredible investment return if you buy now.

The most sought after touristic real estate locations and the ones with the most projects under development, mainly approved developments for the CBI program, are in the south:

• The Bay of Kotor.
• Budya, which is called the Balkan Miami and has more than eight miles of beaches right on the Adriatic coast.
• Seaside strips near Bar, which are usually filled with Russian tourists.

Now, if you’re thinking about investing in Podgorica, don’t let the 190,000 citizens number fool you. It has plenty of differences between neighborhoods. Some of the most-wanted neighborhoods are Blok 5 and 6, especially for families, and Pod Goricom is for the-top-of-the-top. Podgorica has one of the lowest sq. meter prices among European capitals, at a meager average of €1,000. In comparison, in Zagreb, the square meter costs €1,900, and in Belgrade, it costs €2,200 approximately.

What are the main factors swaying property prices across Montenegro? There are many influencing factors over the positive trends on Montenegro’s real estate market:

1.The country has had a pro-business, stable government since its independence.

2.The country’s beautiful landscape and its appealing business environment have attracted loads of FDI for developing hotels and touristic complexes.

3.The Montenegrin government reformed residence laws and now it is possible to apply for a fast-track program through property acquisition.

4.The CBI program has led to a renewed influx of FDI in touristic real estate.

5.The country’s geographical location, close to Russia, Turkey, and Southern Europe means there is a mix of foreign investors willing to take part in Montenegro’s real estate business.

Montenegro’s real estate prices fell by almost 30% during the European crisis. However, not long after the crisis, Russian investors started to purchase land lots to build seasonal homes, followed by western investors once prices started to rise again. 

The future trends are positive. Real estate prices have increased but are still affordable. More investment, more tourists, and more luxury projects should also mean a sustained growth in prices, which means better investment returns for those who take advantage of the wave when it´s at its lowest.

Thus, if you are wondering which are the star projects that give you access to the Montenegrin passport, here they are:

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Investment opportunities in Kolasin

Kolasin is a small town in the north of Montenegro known worldwide as the Balkans’ ski capital because of its famous snowfalls every winter. But don't let that fool you. Over the last few years, Kolasin has become a tourist center all year round, thanks to the proliferation of resorts and tourist infrastructure developed in the area. 

Kolasin is the headquarters of mountain tourism in Montenegro. If you go in winter, the snow covers the whole landscape and is perfect for skiing. Still, if you go in summer, the temperatures (which do not exceed 25 degrees Celsius) will allow you to have a good time either outdoors or in the resort. Of course, the more adventurous ones can go into nature at any time of the year; after all, Kolasin itself is in one of the highest areas of all of Montenegro. 

To reach this area in the north of Montenegro, you don't have to try very hard. Kolasin is a thriving tourist destination in part because it is easily accessible from the main cities via highways or by train. The city also has the airport of Podgorica, only 30 minutes away, so it is very well connected to the rest of the world.

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Opportunity #1 - Five-star Mountain Hotel and Resort

This majestic project consists of 238 suites, of which 25 are luxury suites. This mega project of more than 21 million euros will put Kolasin in the news again, this time for having one of the most modern Hotels and Resorts in the whole region. We are saying that this is practically an opportunity that you will hardly see again, not only in Montenegro but also in the region. 

The group behind this luxury resort in Kolasin already has several successful projects in various Montenegrin regions, to such an extent that they have obtained a guarantee of 2.5 million euros to protect the investments of those who acquire properties from the project until September 30, 2024. This is one of the safest ways to obtain a European passport by investing in real estate.

Besides the 238 units, this resort also has a restaurant, conference rooms (the largest one has a capacity for 400 people), an internal cinema that can accommodate up to 72 people per show, a pub with over 120 seats for socializing, a spa for relaxation, indoor and outdoor pools, children's club, and a fully equipped ski room. This resort will always have a cultural offer for every taste.

The idea behind this project was to break the current boundaries of contemporary architecture while integrating a modern design with Kolasin's natural landscape in perfect harmony.

Having listed all the wonders of this luxury project, it is normal to think that the entrance fee to enjoy all this along with a Montenegrin passport is stratospheric, but the truth is that it is not. If you invest from €250.000, you can be the owner of one of the hotel units (yes, with a property certificate), and then you can automatically apply for a Montenegrin passport.

Here are the details of the project:

• Price: €250,000.
• Type: investment in hotel suits (suits from 30m2 to 45m2, selling model - first-come, first-served basis).
• Ownership type: 1/1 ownership.
• Rental pool agreement: Yes, compulsory.
• Usage of unit: 3 weeks per year + 1-week usage of another 5-star hotel.
• Usage of the unit before the project is ready: 1-week usage of another 5-star hotel.
• Potential profitability: 40% of rental pool profit/year.
• Expenses: No regular maintenance fees, no taxes, no insurance payments, no fee for using the unit by the owner.
• Reserve Fund: 10% of the owner's compensation.
• Delivery date: September 30, 2024.
• Minimum required ownership: 5 years.
• Pre-purchase rights of the seller: Yes.
• Buyback: Optional after five years.

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Opportunity #2 - Ski resort in Bjelasica Mountain

The resort is surrounded by nature in its purest form at 1450 meters above sea level. This is the first mountain resort in this region of Montenegro. The resort’s location is well known for its impressive amounts of snow precipitation during the winter, which has given it its place as the ultimate destination for skiing. However, the mountain also receives numerous days of sunshine per year, making the Ski Resort a perfect destination for any time of the year.

The resort offers numerous ski routes that are maintained according to the highest quality standards and are divided into different levels such as easy, intermediate, and difficult. There are cable cars that offer incredible views of Bjelasica Mountain. The hotel also provides technical equipment for winter sports, so there is no excuse for not enjoying and sliding on the snow.

This luxury resort occupies three acres of alpine forest to offer 168 units in which you can invest, all approved for Montenegro's citizenship by investment program.

Investment details:

• Prices start at €250,000. 
• Type: Hotel units.
• Selling model: first-come, first-served basis.
• Usage of unit: 2 months /year.
• Investment return: 30% of rental pool profit/year.
• Expenses: the maintenance costs of 50 EUR/sqm of the Condo Unit/annum. 
• Pre-purchase rights of the seller: Yes.

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Opportunity #3 - Five-star Hotel 

Approved under the Montenegrin CBI program as an eligible project in 2019, this hotel is a 5-star hotel development situated in the mountain town of Kolašin. The luxury hotel and spa development are surrounded by spectacular mountains and lakes, in Europe's most underrated skiing and mountain tourism destinations. The hotel development, upon completion, will feature 188 upmarket property units.

While most real estate investment projects in Montenegro allow the investor access to a fraction of the property he decides to put his money into, this project offers much more. An investment in this resort comes with the peace of mind of knowing that you are the sole owner of your unit.

This resort is designed for tourist purposes, where investors receive 40% of the net rental income, and the remaining 60% goes to the company that manages the resort. The facilities of this 5-star resort meet the highest standards. Its spacious lobby, its 64-seat bar, its courtyard restaurant, spa, and sports center are especially noteworthy.

Investment:

• Investment: €250,000.
• Type: Hotel units (rooms from 2sqm to 50sqm).
• Ownership type: 1/1 ownership.
• Rental pool agreement: Yes, compulsory.
• Usage of unit: 1 month /year.

-15 days in the season (15 December - 15 march, 15 June - 15 September).

-15 days out of season.

• Potential Profitability: 40% of gross rental revenues (minus repair and refurbishment costs: 1-4%).
• Expenses: €50/sqm of the unit yearly, deductible from gross rental revenues.
• Unit Owner Occupancy Period contribution: €10 per square meter per day.
• Delivery Date: 31 September 2022.
• Minimum ownership time: 5 years.
• Buy-back option: No.
• Pre-purchase rights of the seller: Yes.

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Opportunity #4 - Four-star Hotel 

This hotel was the first hotel development to be approved under the Montenegro Citizenship by Investment Program. Upon completion, the project will have a total capacity of 380 beds and an estimated value of over €11 million.

The hotel does not skimp on its facilities. It will have a buffet where the most cosmopolitan meals will be served, and local restaurants will be available both internally and externally. A bar on the terrace and a lounge that can be reserved for private events also on the terrace. This hotel will also have a beauty salon, a children's playground, and several shops.

Here are the investment details:

• Investment: €250,000.
• Property type: Hotel units.
• Ownership type: 1/240 (joint ownership).
• Rental pool agreement: Yes, compulsory.
• Potential Profitability: 30% profit distribution.
• Delivery Date: 1 November 2022.
• Minimum ownership time: 5 years.
• Buy-back option: after five years, for the amount of €200k (not mandatory).
• Pre-purchase rights of the seller: Yes.

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Investment opportunities in Durmitor

Durmitor is a national park in the northern part of Montenegro, near Zabljak. Without exaggerating, this place is the perfect representation of a fantastic landscape of some fairy tale. This region of Montenegro is full of nature that man has not touched, and it keeps the greenery like few places in the world.

In the middle of Durmitor, we find Zabljak, a small town that is quite popular among tourists discovering Montenegro. It is there where you can find the real estate project that can help you get your Montenegrin passport while generating excellent investment returns.

Opportunity #5 - Luxury Hotel and Villas

This luxurious Hotel and Villas project is being built to maintain the old Durmitor’s Hotel design, an icon of the history of tourism in Montenegro and a symbol for the inhabitants of the place. However, inside the same design, you will find improved and eye-catching facilities to entertain a good part of the tourists who visit northern Montenegro every year.

The project is planned to be completed in May 2022. By then, it will consist of modernized interiors equipped with the most exclusive materials and state-of-the-art technology, all framed within a design that appeals to the highest tastes and blends with the architectural heritage of Zabljak.

The Hotel will have 55 luxury suites and 12 villas, all equipped with fireplaces and luxury amenities to please the most demanding guests. 

Investment details:

• Price: to invest in the resort villas, the price is €250,000.
• Type of ownership: co-ownership in a ratio of 1/10 (shares).
• Rental pool agreement: Yes, compulsory.
• Profitability: 1/10 portion of the 30% net profit.
• Delivery Date: 31 December 2022.
• Minimum ownership: 5 years.
• Buy-back option: Yes, in the 6th year. 
• Pre-purchase rights of the seller: Yes.

Are you interested in this project?

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Investment opportunities in the Bay of Kotor

The Bay of Kotor attracts people from all over the world. It came to redefine seaside living with understated luxury. Yacht clubs, bustling bars, cafes, wine cellars, bistros, classy boutiques, and family entertainment fill the historic streets and squares surrounding the Bay of Kotor to fill your views every day.

In the bay, you can find Porto Montenegro, one of the most cosmopolitan sites in the Mediterranean and the Balkans where you can hear a dozen different languages by just walking by. This place is open to everyone who wants to enjoy, share and connect with other people.

If you want to learn more about this opportunity, please contact us.

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Opportunity #6 - Porto Montenegro

The project is built on a natural plateau right at the beginning of Porto Montenegro, the Montenegrin Adriatic guardian. It will give you panoramic Mediterranean views right across a vibrant lifestyle and the always welcoming waters of the bay.

The project is a wellness-based hotel by a renowned international hotel chain, bright homes, and a shopping hub. It has different investments for different types of investors, offering varied possibilities for those applying for the Montenegro CBI program.

Investment details:

• The minimum investment must be €450,000. The investment can be made in one or more apartments, depending on their types.
• As you know, the Montenegro CBI program allows you to rent your property. And our partners can help you with a rental pool agreement.
• You can secure one of these properties for a fee that varies from €10,000 to €20,000.
• Prices:

-Studios are available from €190,000.

-One-bedroom apartments from €265,000.

-Two-bedroom apartments from €347,000.

-Three-bedroom apartments from €450,000.

-For a valid CBI investment, you can acquire one three-bedroom apartment or a combination of the others.

Acquiring real estate in Montenegro

After analyzing the market, you’re probably asking what you need to do to buy property in Montenegro. First of all, can foreigners buy property in Montenegro?

Shortly, yes, but there are certain conditions. If you want to buy real estate sitting in its parcel, such as a house or a land lot, you’ll need to do it through a registered company. That means you must work with a lawyer to register a business in the country to buy the property. However, apartments can be directly purchased by foreigners without registering a company.

When buying a property in Montenegro, you must consider the following fees (we’ve already mentioned some of them):

• For re-sold properties: 3 % transfer tax of the assessed value.
• For new properties: 21 % VAT of the purchase price.
• Notary fees: 0.01 % of the assessed value.
• Real estate agent fees are usually between 3 % and 6 % of the purchase price.

Now, what are the steps to buy property in Montenegro?

1.The potential buyer finds real estate of his liking and makes an offer. He/she negotiates the details with the seller (usually through agents).

2.The buyer makes a 10% deposit of the agreed purchase price.

3.The buyer’s lawyer confirms that the property has no ownership record issues. Some properties may have problems due to Montenegro’s complicated history, even if it wasn’t fully involved in the wars during the 90s. If the lawyer finds the property isn’t fit for sale, the deposit is refunded.

4.If everything is fine, a Sales & Purchase Contract is signed by both parties and then notarized.

5.Payment is made. The schedule is set on the contract.

6.The 3 % transfer tax must be paid within 15 days after signing the contract.

7.The buyer’s lawyer registers the agreement and processes the title deed transfer.

So, overall, is Montenegro real estate a robust investment? Absolutely, yes. Montenegro is one of the Balkans’ best vacation destinations, and one of the most underrated in the Mediterranean. The government has sought to modernize the banking sector, meaning there are more funding options for these projects. Likewise, the government has simplified the legislation and the tax system is quite attractive and straightforward.

There’s not much local demand for luxury real estate. However, the CBI program is expected to lead to serious growth both in investment and demand for luxury and touristic real estate across the coast and the north.

Want to invest in real estate in Montenegro? Contact our experts and they’ll gladly assist you! Ask for a consultation today. 

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