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Property and Income Taxes in Montenegro

Property and Income Taxes in Montenegro

Low Property Taxes and Income Taxes

If you are interested in making investments in Montenegro, you should also know about what kind of taxation you will need to deal with. Here we are looking at these tax types.

In Montenegro, there are multiple taxes that you may be responsible for. These are separated by subjects. These are Corporate Taxation, Individual Taxation, and Property (Real Estate) Taxation.

Corporate Taxation

Although it is not directly related to your property ownership, if you are investing by starting a company in Montenegro, your company will be required to pay some taxes for the incomes it made. This Company Income Tax is calculated at the 9% percent fix rate. And the company expenses can be deductible.

Individual Taxation

Besides the companies, of courses individuals are responsible for paying taxes as well. There are a few types of taxation that individuals are required to pay. The primary one is the income tax.

Individual income taxes are determined based on the money you earn through the following sources;
• Business ownership income
• Employment payments
• Investment income such as interests, royalties, or dividends.
• Immovable property incomes

• Rental Incomes — The last one here is the one we are most interested in. There are multiple ways that you can make property incomes and they have different practices for taxing. In Montenegro, incomes that you get from renting out your property are also counted as taxable incomes. The rate that the tax is calculated is fixed at 9%. But there can be deductible costs that can change the tax payment. This deduction can be up to 40%.
• Capital Incomes — Capital Income, or Capital Gain, is the money you made by selling your property. In Montenegro, property sales are also taxed with a fixed rate of 9%. But again, there can be many costs that can be deducted from these taxes. For example, the expenses you made for improvements or the acquisition process, are deductible.

Real Estate Taxation

Other than the income taxes, owning a real estate is also subject to taxation. Individuals who own real estate in Montenegro, or their rights-holders, are responsible for paying taxes based on the market values of the properties.

Depending on the market value range that the property stands, this tax can be calculated at a rate between 0.25% and 1%.

But there are also some extraordinary cases where the property value is unusual for the market. In such cases, the real estate tax can be a bit higher. ■