PROGRAMME 2
MONTENEGRO

Buying In Montenegro

Legal Representative: You will need to choose a legal representative in Montenegro to act on your behalf and take responsibility for the purchase process.

Power of Attorney: If you are not in Montenegro you will need to give power of attorney (POA) to your legal representative in order for her/him to act on your behalf through the process of the preliminary agreement, sales contract, purchase tax and the final change of ownership in the land registry. POA has to be signed in front of the court (working days from 08 to 13 hrs) and translated by court verified translator so it's essential to prepare all the necessary information at least one day in advance.

Bank Account: It will be necessary for you to open a bank account in Montenegro and to give your legal representative authorization to make the transfer for the property purchase from your bank account on your behalf. Please make sure you are supplied with transfer instructions which you'll need for sending the money from your home account.

Title Check: You lawyer will perform a title check on the property for you and confirm to you whether the property has the necessary paperwork for clean purchase.

Deposits: Deposits and reservations are often requested in cash and range from 5-10% of the agreed purchase price.

Pre-contract: A draft of the pre-contract will be drawn up, coordinated by your legal consultant. The final sales contract will be agreed between the lawyers of both the buyer and seller. Usually the reservation is 5% of the agreed purchase price, while the deposit paid on signing the pre-contract is 10%. Conditions usually include a standard clause stipulating that if the buyer pulls out of the purchase then she/he loses the deposit, while if the seller pulls out then she/he is obliged to return double the amount of the deposit or reservation.

Money transfers. Money transfers can take from 7 to 15 days to reach your Montenegrin bank account. This is because the transfer must go through an intermediary bank (usually Frankfurt). Some banks in Montenegro require at least three working days notification for large cash withdrawals.

Purchase contract: This will be executed by your lawyer and coordinated by your consultant.

Contract Signing: Once the contract is signed by both the buyer and seller (or their legal representatives), the buyer is the actual owner although the change of ownership in the land registry must subsequently be carried out to complete the process.

Purchase Tax: Purchase tax on a real estate in Montenegro is 2% of the value of the property as determined by the Inland Revenue Office. The value for the tax calculation cannot be smaller then the price stated in the sales contract.

Change of Ownership: Once the 2% purchase tax is paid, your lawyer will present the purchase contract (signed by both parties), receipt of tax payment and official request for the change of ownership of the property to the local Cadastre. The change of ownership procedure is usually completed within 60 days.