By European standards, Montenegro is considered quite affordable to live in. The average salary in the country in 2024 after taxes is only €820. For comparison - in Brussels. For such money, you won't even be able to rent a one-bedroom apartment on the outskirts. Tempting statistics for an investor, right? We suggest understanding the costs of maintaining real estate so that you can finally decide for yourself whether it is worth buying a villa in the resort town of Sutomore or Podgorica.
Cost of utilities in Montenegro
Traditional paper bills regularly arrive at homeowners' addresses, but in the ancient-looking Montenegro, there is also a place for modern technologies - all utility bills can be paid using internet banking or directly on the websites of the service providers. A typical bill for a Montenegrin homeowner consists of the following expense categories:
- Waste removal. If you have bought an apartment in a residential complex, the monthly cost will be around €10. For a private house, you will have to pay twice as much - about €20. The cost of the service depends directly on the size of the living area and is calculated using the formula S × €0.06. So, if you own a private house with an area of 280 m², calculating the cost of waste removal will be very simple - 280 m² × €0.06 = €16.6/month.
- Water supply and sewage. Central water supply is the best option. Its cost is regulated by the municipality and usually amounts to only 0.4-0.6 €/m³ for water and 0.2-0.4 €/m³ for sewage. Of course, in popular tourist locations, there is a slightly higher tariff. It can reach up to 1.6 €/m³. If you have not been lucky enough to invest in real estate in an area without central water supply, you will have to prepare for a price of 5-7 €/m³. This difference is explained by the fact that water delivery in tankers is quite costly in itself. To save at least a little, owners opt out of sewage in favor of an individual septic tank. Its maintenance costs around 150-200 €/year. We recommend investing in cities with centralized water supply systems, such as Budva, Bar, Herceg Novi, Kotor, Petrovac, and others. With a consumption of 10 m³/month, you will have to pay a mere pittance.
- Electricity. Electricity in Montenegro is considered one of the cheapest in Europe. Tariffs range from 0.04 to 0.06 €/kW·hour. With reasonable usage and higher consumption in the evening, when a lower tariff applies, you can save quite a bit and pay only 40-50 €/month.
- Gas. The peculiarity of Montenegro is that in most areas, except Herceg Novi and Bar, centralized gas supply is absent. For locals, this is not a problem - they have long been accustomed to using gas cylinders. The cost of one such cylinder is €60, and replacement costs €15. On average, one cylinder lasts for 2-4 months. To avoid dealing with gas, you can completely opt out of it and use an electric or induction stove, which will not only be more beautiful and convenient, but also safer.
- Heating. It simply doesn't exist... At least not central heating. Montenegro is quite warm, so heating is not always necessary. Property owners solve this issue on their own and each finds the optimal solution. Some prefer individual boilers or electric heaters, others buy heat pumps and install air conditioners, while others stick to tradition and warm themselves by the fireplace. Surprisingly, among the most cost-effective and efficient ways to stay warm are a fireplace and an air conditioner. Even if the latter runs all night and half of the day, it will only result in an extra €30/month for electricity.
- Internet - 20-30 €/month;
- Television. Satellite TV - 10 €/month, cable TV - 15-20 €/month.
- Telephone. Landline phones have long lost their relevance, but if you still need one, you will have to pay around €18 per month.
In multi-apartment buildings, residents will have to pay extra for the maintenance of the territory. Note that in Montenegro, buildings with more than three apartments fall into this category. Owners are required to register their residential complex as a legal entity and make monthly contributions according to the rates set by the state: 0.2 €/m² for old buildings, 1.5-2.5 €/m² for new residential complexes, and 30-40 €/m² for elite complexes. All collected funds are kept in the building's fund and used for landscaping, repairs, and other maintenance.
Property taxes in Montenegro
Even if you stay tax non-resident pay tax after all, it will be necessary. In order for the amount to be as accurate as possible, the municipality conducts an annual reassessment of property value and issues a new bill. This procedure takes place on April 30th. On this day, you may either be happy or sad because the amount of tax may decrease, increase, or remain the same. It is largely influenced by the condition of the property, the year it was built, its purpose, and distance from the sea. The size of the tax also depends on the specifics of the tax legislation of the specific region. To avoid a heavy blow to your wallet, the tax is divided into two payments, due on June 30th and October 31st. The basic tax rate is 0.25-1% of the value of the property. In the case of more elite properties, it can increase to 5%. Of course, non-resident property owners who do not have a residence permit or long-term visa are required to pay a little more. But, if you're lucky, you can take advantage of tax breaks.
- if the property is the main place of residence, the tax is reduced by 20%;
- if there are family members constantly living in the house or apartment with you, the tax is reduced by an additional 10% for each of them (the maximum amount of tax relief cannot exceed 50%);
- For the second property located in the resort area, a special tourist tax (turistička taksa) applies.
It is also important not to forget about the tax on income from rent. To pay it, you should fill out a tax declaration before the beginning of spring and pay the full amount by March 31. The tax rate for landlords in Montenegro is 15% of 70% of the total revenue. This means that you receive the remaining 30% "clean" without deduction in favor of the state. The average yield in the country is 3.5-6.5%, and the cost of a one-bedroom apartment is around 400 € per month. Special conditions apply to short-term rental.
When selling, the tax rate is also 15%, but it is calculated on the capital gain, that is, on the difference between the purchase and sale amounts. This tax may not be levied at all if the following transactions are involved:
- The contract is signed between spouses, parents and children, and other close relatives.
- We are talking about the sale of a property that was the former owner's primary residence.
The cost of real estate in Montenegro varies greatly depending on the areas and properties. For example, in the coastal region, a house can cost 2,000 €/m², while an apartment in an elite residential complex can cost 10,000 €/m².