When you sell a flat, house or plot in Montenegro, you pay capital gains tax of 15% on the gain. The tax base is the difference between the sale price and the purchase price, and the purchase price is adjusted for the rise in retail prices. No tax is due if the property was your only and main place of residence, and the tax is calculated in the annual return, which is filed by the end of April of the following year.
The rules come from the Law on Personal Income Tax. This guide explains how the tax base is calculated, when no tax is due, what applies to inherited and gifted property and to foreigners, with a worked example.
How much is capital gains tax on a property sale in Montenegro?
| Question | Rule |
| Rate | 15% of the capital gain, from 1 January 2022 (previously 9%) |
| What counts as real estate | Land, buildings, residential and commercial units and other structures |
| Tax base | Sale price minus purchase price |
| Sale price | Contract price minus documented reconstruction costs and costs of sale |
| Purchase price | The price at which you acquired the property, adjusted for the rise in retail prices up to the day of sale |
| If the purchase price cannot be established | The purchase price is 80% of the sale price |
| Loss | A capital loss is deducted from capital gains of the same year |
If the contract price is below the market price, the tax authority sets the sale price. In an exchange of property, the sale price is the market price of the property exchanged.
The municipal surtax on income tax, up to 13% of the tax due and up to 15% in Podgorica and Cetinje, is charged under the Law on Local Government Financing on tax on employment income, self-employment, income from property and income from capital. Capital gains tax is not on that list.
How is the tax calculated? An example
Our example, without adjusting the purchase price for the rise in retail prices:
| Item | Amount |
| Contract sale price | €160,000 |
| Documented reconstruction costs | €7,000 |
| Documented costs of sale | €3,000 |
| Sale price for tax purposes | €150,000 |
| Purchase price in the purchase contract | €100,000 |
| Capital gain | €50,000 |
| Tax at 15% | €7,500 |
If the purchase price could not be established, it would be taken as 80% of €150,000, that is €120,000, so the gain would be €30,000 and the tax €4,500. Adjusting the purchase price for the rise in retail prices increases the purchase price and so reduces the tax.
When is no capital gains tax due?
The law sets out three cases in which a capital gain is not taxed:
- the property served as your only and main place of residence (registered residence); a holiday home or a flat you only rented out does not meet this condition;
- the transfer was between spouses or life partners and is directly connected with marriage, life partnership, divorce, the end of a partnership or inheritance;
- the transfer was a gift to first-order heirs.
How a flat is gifted at a notary and which taxes apply is explained in our article on gifting a flat.
What applies to inherited and gifted property?
Inheritances and gifts are not treated as income, so you pay no income tax when you inherit a flat or receive it as a gift. When you later sell it, the purchase price is the price at which the deceased or the donor acquired the flat. If the flat was bought long ago at a low price, the gain, and with it the tax, can be large, so it pays to find the old purchase contract in good time. How inheritance works at a notary is explained in our article on probate.
Who files and by when?
- Deadline. Capital gains tax is calculated annually and paid together with the annual tax return, which is filed by the end of April of the current year for the previous year.
- Resident. A resident who realises a capital gain must file a return. A resident is a person who has their registered residence or centre of business and personal interests in Montenegro, or who stays there for more than 183 days in the tax year.
- Non-resident. A foreigner who is not resident pays income tax on income realised in Montenegro and files a return for income on which no withholding tax is prescribed, and a capital gain from a property sale is exactly that kind of income.
- If no return is filed. The tax authority will file a return ex officio on behalf of a taxpayer who does not file on time.
- Double taxation. A resident who pays tax in another country receives a tax credit, up to the amount of Montenegrin tax on the same income.
How the tax on a property gain fits with double tax treaties and what a foreign owner should prepare before exiting the investment is described in more detail by the law firm RoNa Legal.
Capital gains tax and transfer tax: who pays what?
| Tax | Who pays | On what |
| Capital gains tax | Seller | On the difference between sale price and purchase price |
| Property transfer tax | Buyer | On the market value of the property |
Rates and deadlines for transfer tax are explained in our article on property transfer tax, and signing and registration in our article on the purchase contract at a notary.
Checklist before you sell
| What to prepare | Why |
| Purchase contract or transfer tax decision | Proof of the purchase price |
| Reconstruction invoices | Reduce the sale price |
| Proof of costs of sale | Reduce the sale price |
| Proof of registered residence in the flat | For the main-home exemption |
| Contract of the deceased or donor | Purchase price for inherited or gifted property |
| A calendar reminder for the end of April | Deadline for filing and payment |
You can find or list flats and plots that owners are selling in our real estate category.
Frequently asked questions
How much is capital gains tax on selling a flat in Montenegro? 15% of the difference between the sale price and the purchase price. The rate applies from 1 January 2022; it was previously 9%.
Do I pay tax if I sell the flat I live in? No, if the flat was your only and main place of residence (registered residence). A holiday home and a flat you only rented out do not meet this condition.
Do foreigners pay tax when they sell property in Montenegro? Yes. A non-resident pays income tax on income realised in Montenegro and files a return, because no withholding tax applies to capital gains.
What if I cannot prove what I paid for the flat? The purchase price is then taken as 80% of the sale price, so 20% of the sale price is taxed.
Is tax due on selling an inherited flat? An inheritance is not income, but when you sell the flat, the gain is calculated from the price at which the deceased acquired it.
When is the capital gains return due? By the end of April for the previous year, and the tax is paid when the return is filed.
Sources
Capital gains are governed by the Law on Personal Income Tax (Official Gazette of the Republic of Montenegro 65/2001, 37/2004 and 78/2006 and Official Gazette of Montenegro 86/2009, 14/2012, 6/2013, 62/2013, 60/2014, 79/2015, 83/2016, 67/2019, 59/2021, 146/2021, 152/2022, 88/2024, 133/2025, 160/2025 and 70/2026, articles 3, 5, 10, 37a to 37h, 43, 44 and 50a), and the surtax by the Law on Local Government Financing (Official Gazette of Montenegro 3/2019, 86/2022, 5/2024, 92/2025, 149/2025 and 119/2026, article 8). A consolidated text up to 2021 is published by Paragraf, and the 15% rate for capital gains was introduced by the 146/2021 amendments. The legislation was checked on 24 September 2026. Fijaka is a classifieds platform and does not provide tax or legal advice; for a specific sale, consult a tax adviser or a lawyer.