Immovable property

Last reviewed 21 Aug 2023

Tax depreciation

Immovables are included in I group of fixed assets for tax depreciation purposes. Straight-line method is applied.

Straight-line

Immovables are included in I group of fixed assets for tax depreciation purposes. Straight-line method is applied.

Additional

N/A

Depreciation categories

land - no depreciation

buildings - 2.5% , tax base acquisition amount

Land

No depreciation

Buildings

2.5 % as of activation moment

Tax base for buildings

Acquisition costs

Special depreciation

Write-ups

Not allowed for tax purposes

Real estate income tax

Object of taxation

Capital gains from the sale of operative and private real estate (irrespective of the holding period) by individuals 15% on gross amount of 70%

Tax rate

15%

Tax collection

generally in the course of the calculation by attorney or notary public

Exemptions

N/A

Property transfer tax

Object of taxation

Acquisition of property rights on immovable property in Montenegro which includes purchase, exchange, inheritance, gift, entry and withdrawal of real estate from a commercial company, acquisition of immovable property in liquidation or bankruptcy procedure, acquisition of immovable property on the basis of a court decision or de- cision of and other ways of acquiring immovable property.

Transfer of newly built facility which is subject to VAT is not subject to transfer tax.

Basis of assessment

The basis of assessment is market value of immo- vable in the moment of its acquisition.

Tax rate

3%

Property-related taxes

Property tax

Objects of taxation

• Ownership right over immovable property (buil- dings and land) of companies and individuals;
• Right of use of immovable property owned by the State. Basis of assessment: Market value of the immovable as at 1 January in the year for which tax is determined. Tax rate: In the range from 0,25 % to 1 %

Real estate funds

Owner of the fund assets

No specific rules.

Annual valuation

No specific rules.

Borrowing

N/A

Diversification of risk

No specific rules.

Tax liability

No specific rules.