- Law on Immovable property Tax ("Official Gazette of the Republic of Montenegro ", No. 065/01 dated 31.12.2001, 069/03 dated 25.12.2003, "Official Gazette of Montenegro, No. 075/10 dated 21.12.2010, 009/15 dated 05.03.2015, 044/17 dated 06.07.2017)
- Decree on More Detailed Criteria and Methodology for Determination of Immovable Property Market Value ("Official Gazette of Montenegro, No. 036/11 dated 27.07.2011, 066/15 dated 26.11.2015, 039/17 dated 22.06.2017)
- Rules on the Contents of The Report on the Payment of Immovable Property Tax ("Official Gazette of Montenegro, No. 033/05 dated 03.06.2005)
Immovable property taxpayer is a legal and physical person that is the immovable property owner (land, building, dwelling and business units or other construction facility), on 1st day of January of the year for which the tax is determined, and the base for payment of such tax is market value of the immovable property as of that day.
General tax rate
Immovable property general tax rate may amount from 0,25% to 1,00% of immovable property market value, and its amount is determined by municipality with its decision, depending on the type, location, quality, age of immovable property.
Tax liability is determined by the decision of the competent municipality tax authority.
A municipal government may determine a higher tax rate than the rate determined by the law, and so for:
- Not cultivated agricultural land;
- Secondary residential building or apartment;
- Building constructed contrary to a law;
- Hospitality industry facility located within the priority tourism locations zones, based on a regulation of the Government on determining a priority tourism location;
- Hospitality industry facility use contrary to intended purpose set by a planning documentation;
- Buildable land not fitted to fitful purpose in accordance with a planning documentation.
Tax rate applicable on a not cultivated agricultural land
The tax rate for not cultivated agricultural land, the area of which exceeds 150,000m2 the tax rate shall be determined in the range between 3% and 5% of the market value of the immovable property.
Tax rate applicable on secondary residential building or apartment
The tax rate for secondary residential building or apartment referred may be increased up to 150% in relation to the general tax rate. Secondary residential building shall be deemed to be a residential building or apartment not being a habitual residence or permanent residence of the taxpayer.
An increased tax rate may be set for building constructed contrary to a law in relation to the general tax rate for a building: used to resolve a housing issue – up to 50%; not used to resolve a housing issue – up to 100%. The building constructed contrary to law shall be deemed to be a building: constructed without a building permit on the area for which exists a planning document; or separate part of a building not constructed in accordance with a building permit; not used in accordance with intended purpose envisaged by planning documentation; constructed on someone else’s land.
Tax rate applicable on a hospitality industry facility
A municipal government may stipulate the tax rate for hospitality industry facility located within the priority tourism locations zones based on a regulation of the Government higher than the general tax rate for the hospitality industry facility:
- 3*** category - from 2 to 2.5% of the immovable property market value;
- 2** category - from 3 to 3.5% of the immovable property market value;
- 1* category - from 4 to 4.5% of the immovable property market value;
- not being assigned with a category - from 5 to 5.5% of the immovable property market value.
The tax rate may be reduced compared to the general tax rate for the hospitality industry facility which is not in function for 12 months in a year, for the hospitality industry facility
- 4**** category – up to 30%;
- more than 4**** category – up to 70%.
Hospitality industry facility shall be deemed a facility wherein a hospitality industry activity is carried out (hotel & resort, wild beauty resort, hotel, small hotel, boutique hotel, hotel garni, apartment hotel, condo hotel, hostel, boarding house, motel, tourist settlement, ethno village, eco lodge, villa, inn, mountain lodge, vacation resort, camp and similar) and which is located in the priority tourism locations zone.
The tax rate between 5% and 5.5% of the market value of immovable property may be prescribed for a hospitality industry facility used contrary to tourist intended purpose defined in the planning documentation. Hospitality industry facility shall be deemed a facility from a group of primary and complementary hospitality industry facilities, in accordance with the law governing the tourism.
Tax rate applicable on buildable land
The tax rate for buildable land not fitted to fitful purpose in accordance with a planning documentation may be increased up to 150% in relation to the general tax rate, except for buildable land intended for construction of economic facilities and facilities intended for further sale. for which will be determined a tax rate in the rage from 3% to 5% of the market value of immovable property upon expiry of period of five years as of the day the planning documentation is adopted. Buildable land shall be deemed land located within boarders of the building area of a settlement whereat, in accordance with a spatial plan, building structures may be constructed, except for facilities for municipal utility infrastructure and other facilities of public interest, and without constructed building structures envisaged under the planning documentation on it or without a procedure for obtaining a building permit intuited.
The immovable property tax on buildings and apartments that serve to a taxpayer as the main place of residence shall be reduced by 20% for the taxpayer and 10% for each family member of his/her household, but not exceeding 50% of tax liability.
The period for assessment of the immovable property tax shall be a calendar year.
Assessment and payment of tax
The immovable property tax shall be determined by a decision of a competent local government authority by 30th April of the current year.
The taxpayer shall pay the immovable property tax in two equal instalments of which one is due on 30th June and the other on 31st October of the year for which the tax is assessed.
Immovable property owner shall be obliged, within 30 days from the day of acquiring the immovable property, to submit a tax return to a competent local government authority for assessing the immovable property tax for that year.
The taxpayer of the immovable property tax that keeps business books shall be obliged to submit to the competent local government authority by 31 March of the calendar year the tax return for assessing the immovable property tax for that year.
If the immovable property is located on the territory of two or more municipalities, the taxpayer shall submit the tax returns to the competent local government authorities of those local self-government units.
The taxpayer shall be obliged to enter in the tax return accurate and complete data for assessing the immovable property tax.