What is the property tax rate on a flat? The municipality sets it between 0.25% and 1.00% of market value, and between 0.3% and 1.5% for a second home.
Property tax is the only tax a flat owner pays every year, whether they live in the flat, let it or keep it empty. Even so, most owners do not know how the municipality arrived at the figure on their assessment, so they do not notice when it is wrong. Local searches show the same thing: next to "porez na nepokretnosti" (property tax), people most often type the names of municipalities, Podgorica, Budva and Bar, and the word "online".
This article goes through the law in the order it affects you: who pays, how the tax base is calculated, what the rates are, what reduces the tax and when it is paid. All provisions come from the Law on Property Tax as amended in 2022 and 2025.
Who pays the tax
The taxpayer is the owner registered in the cadastre on 1 January of the year for which the tax is assessed. Co-owners pay in proportion to their share, joint owners in equal parts. If the owner is unknown or has died, the taxpayer is the person using the property.
Two consequences matter when you buy:
- For the year in which you buy, the taxpayer is whoever was registered on 1 January, which as a rule is the seller. If you want that year's tax split, you have to agree it in the contract.
- The buyer must still file a tax return within 30 days of acquiring the property. The notary sends the contract to the municipality within ten days, but that does not release you from filing.
How the municipality calculates the base
The base is the market value of the property on 1 January. The municipality does not estimate it by eye but by a formula set in the law:
| Step | What is used | Range in the law |
| Price per m² | Average price of newly built flats for the previous year, according to MONSTAT | For municipalities without their own figure: national average × coefficient 0.10 to 2.00 |
| Area | Area registered in the cadastre | If it does not match reality, it is set in the assessment procedure |
| Location | Zone coefficient | 0.10 to 5.00 |
| Quality | Fit-out, construction type, number of storeys | 0.10 to 3.00 |
| Age | Reduction of 1% for each year of age or since the last reconstruction | At most 60% |
There is also protection against jumps: if the average price per m² rose more than 20% on the previous year, the municipality may calculate the base on the average of the last three years.
What this means in practice. MONSTAT publishes a separate price only for Podgorica; in 2025 the average new-build price there was 2,127 euros per m², against 1,810 a year earlier, a rise of about 17.5%, so below the 20% threshold. For Budva and the other coastal municipalities MONSTAT publishes no separate figure, so the starting point is the national average, which was 2,200 euros per m² in 2025, multiplied by a municipal coefficient.
Rates
The municipality sets the actual rate by its own decision, but only within the ranges in the law:
| Property | Rate on market value |
| General rule | 0.25% to 1.00% |
| Second flat or house | 0.3% to 1.5% |
| Illegal building that solves the owner's housing need | 0.3% to 1.5% |
| Illegal building that does not solve a housing need | 0.3% to 2% |
A second home is a flat or house that is not the owner's registered residence or place of permanent stay, as well as any flat owned by a legal person. There is one exception: if it is your only dwelling in Montenegro and you have a registered residence or permanent stay here, it is not treated as a second home. A foreigner without residence or permanent stay here therefore pays the second-home rate as a rule.
A special rate of up to 5% for undeveloped building land no longer applies: the Constitutional Court struck it down, and the October 2025 amendments removed it from the law.
A worked example
A 60 m² flat in Podgorica, 20 years old, assuming location and quality coefficients of 1.00. The municipality sets the real coefficients for your zone, so this illustrates the method, not your assessment.
| Item | Amount |
| 2,127 € × 60 m² | 127,620 € |
| Age reduction of 20% | 102,096 € market value |
| Tax at 0.25% | 255 € a year |
| Tax at 1.00% | 1,021 € a year |
| As a second home, 0.3% to 1.5% | 306 € to 1,531 € |
The difference between the lowest and highest rate is fourfold, so the municipal decision matters more than any general advice. Check it before you buy, just as you check the real estate transfer tax.
Reliefs and exemptions
- The flat you live in. Tax on a flat or house that is your residence or place of permanent stay is reduced by 20% for you and by 10% for each household member, up to 50%. In the example above, an owner with two household members pays 40% less: 153 instead of 255 euros, or 613 instead of 1,021 euros.
- Small amounts. No tax is due if the total base for all your properties does not exceed 5,000 euros and you do not use them to earn income.
- Hotels. The rate can be reduced by up to 15% for three-star hotels, up to 30% for four-star and up to 70% above four stars.
- Buildings under construction. Since the October 2025 amendments, buildings under construction are no longer subject to the tax, and at the same time the exemption for a developer's completed but unsold flats was abolished.
Deadlines and how to pay
| Date | What happens |
| 1 January | The liability arises; the taxpayer is the registered owner |
| 31 January | The cadastre sends the municipality the ownership data |
| 30 April | The municipality issues the tax assessment |
| 30 June | The first instalment is due |
| 31 October | The second instalment is due |
| 30 days from acquisition | The new owner files a tax return |
An individual who does not pay the instalments on time or does not file a return within 30 days commits an offence carrying a fine of 250 to 2,000 euros. You can check your assessment online: the Capital City of Podgorica has an electronic tax overview, and other municipalities issue assessments through their local public revenue administrations.
If the area in the assessment is larger than the real one, or the flat is taxed as a second home although you live in it, you correct that with an appeal against the assessment and evidence, not by keeping quiet. The most common source of error is the area: the municipality takes the one from the cadastre, so it is worth making sure the cadastre extract matches reality.
Before you buy or sell
Property tax is an annual cost that comes with ownership, so it belongs in the decision as much as the rent you expect or the price per square metre. Our guide to buying property covers the other costs of a purchase, and if you are selling, posting a listing on Fijaka is free.
Frequently asked questions
Who pays property tax in the year of sale? Whoever was registered as owner on 1 January, as a rule the seller. A different split has to be agreed in the contract.
What counts as a second home? A flat or house that is not your residence or place of permanent stay, as well as a flat owned by a company. Your only dwelling in Montenegro, combined with a registered residence, is not a second home.
When is property tax paid? In two equal instalments, by 30 June and by 31 October. The municipality issues the assessment by 30 April.
Is there a reduction for the flat I live in? Yes: 20% for the owner and 10% for each household member, up to 50%.
How is the market value calculated? The average new-build price per m² from MONSTAT, multiplied by the area in the cadastre and by location and quality coefficients, reduced by 1% for each year of age, at most 60%.
Sources
The provisions come from the Law on Property Tax (Official Gazette of Montenegro 25/19, 49/22 and 152/22), with the amendments published in Official Gazette 118/25 and 133/25 and Constitutional Court decision U-I 22/20, which struck down the special rate for undeveloped land. Prices per m² come from MONSTAT's statistics on the prices of newly built flats.