Buying Property in Montenegro
Buying Montenegro property is a fairly fuss free process; there are no restrictions
on foreigners buying property in Montenegro, but they can only buy land through
a company. There are a few very subtle differences between buying off plan and resale
property in Montenegro, but both can be completed in less than 10 steps. Off plan
property is typically paid for in 4 stages
Buying Resale Property in Montenegro
The difference between off plan property and resale is that you pay for resale property
in just two stages; deposit to reserve and then the remainder in full. Finance is
not very easy to obtain in Montenegro, so it is wise to sort out your financing
beforehand. This is then transferred into a Montenegro bank ready for transfer to
the vendor.
Buying a Resale Property in Montenegro - Step by Step
- Negotiate a price acceptable to you and the vendor
- Appoint a lawyer. The lawyer needn't be based in or operating from Montenegro, but
they should be licensed in the country and able to act on your behalf.
- Place a deposit (between 1000 Euros and 10% of purchase price) to take the property
off the market. A reservation agreement is signed by both parties and the deposit
held by the vendor
- Open a local bank account
- Pay the balance of your deposit within 10 days. This is usually 10% of the agreed
price minus the initial deposit
- Sign the contract in the local county court and immediately transfer the outstanding
balance to the vendor from your Montenegro bank account. Your lawyer can sign the
contract on your behalf if given power of attorney.
- Pay the 3% purchase tax. The value of the property is determined by the Inland Revenue
office
- Submit the papers to the local land registry
- The property is then registered in your name
Buying Off Plan Property in Montenegro
As with everywhere, off plan property in Montenegro is paid for in stages, but in
Montenegro the property tends to really be off plan. Off plan property around the
world is bought at various stages of development, but in Montenegro it is usually
bought before work has begun.
A typical example of staged payments on an off plan property in Montenegro is:
30% Pre-contract (less initial deposit)
30% Foundation level
30% Roof level
10% Snagging and hand over
According to reports there are currently a lot of developers in Montenegro holding
substantial land banks. Now, whether these are sold, or developed by their current
owners, either way there will be a fresh wave of off plan properties coming onto
the market as the international recovery gathers pace in the coming year.
Buying Off Plan Property in Montenegro - Step by Step
Negotiate a price acceptable to you and the developer
- Appoint a lawyer. The lawyer needn't be based in or operating from Montenegro, but
they should be licensed in the country and able to act on your behalf
- Pay a deposit, sometimes called a reservation fee (usually around 5000 Euros). Like
with resale properties, a reservation agreement is signed by both parties, unlike
a resale purchase the deposit is usually held in a Client Account
- Approve specifications, and sign pre-contracts unless advised otherwise by your
lawyer. This agreement will tie you into a staged payment plan
- Sign the contract in the local county court and immediately transfer the outstanding
balance to the developer's account. Your lawyer can sign the contract on your behalf
if given power of attorney
- Submit papers to the local land registry
- The property is then registered in your name
Montenegro Mortgages Options
When considering the options for a mortgage on your
Montenegro property there are a couple of choices to consider;
- Do you consider raising finance on your existing property in the UK to cover the
whole cost of your purchase abroad? A good idea if the interest rate in the country
in question is a lot higher than it is here in the UK as you will pay a lot less
in monthly repayments.
- Do you secure a mortgage against the property from a local bank in the country of
purchase? This can be a wise option especially if the interest rate is lower than
our current UK interest rate. Most overseas mortgage / bank lenders will require
upto 30% deposit on mortgages. However, you will need to give some thought to how
you will service your mortgage payments each month especially if you are not living
or earning in that country as you may well lose out on exchanging money each time
to cover monthly expenses. Check out our
Foreign Currency page to see how you can save money in this example
- Some Builders and developers may well offer their own mortgage facilities on their
properties for sale. This can be beneficial to both parties depending on the logistics
of the mortgage or loan facility. Always check and compare with the two options
above before making your final descision.
For more details on Mortgages
in Montenegro visit our Mortgage page in Montenegro section.