Passive income from renting out housing in Montenegro: what is required from the owner?

If you own real estate in Montenegro, then depending on the season and your stay in the country, you can earn money by renting an apartment or villa.

According to management companies, the average return on the facility is 3.5‑6.5% per year. The amount of income will be determined by the location, number of rooms, renovation and occupancy.

From September to May, apartments are rented for 400-800 € per month. Starting in June, when the holiday season begins, housing prices rise 1.5‑2 times.

What are the responsibilities of the owner?

When renting out a house, the owner is obliged to pay the annual tourist tax turistička taksa (tourist tax).

The amount is charged for all real estate on the coast. It does not depend on the citizenship of the landlord, however, foreigners with permanent residence or citizens of Montenegro may be exempt from paying this tax, provided that this is their only place of residence or it is permanent if there are several real estate objects in possession. The amount of tax is calculated according to the formula, on average it comes out about 300 € per year.

The owner is also obliged to pay income tax on the long-term or short-term lease of the object.

According to the latest changes made to the tax legislation in 2022, when renting out a long-term lease, the owner must pay 15% of the amount of income.

For short-term rentals, the owner is required to issue a special permit (categorization of the object). The amount of tax will depend on the category of the apartment, the number of places for tenants and other indicators.

How to maintain housing if you do not live in Montenegro all year round?

There are private management companies in the country that can take over the maintenance of your property. The management company pays the bills, cleans the apartment, and monitors the safety of the facility when tenants live there.

The cost of management companies’ services is 20-30%, while the organization collects its fee if there are clients in your apartment or villa. Employees send reports on the occupancy rate of the object, its condition and other factors that are important for the owner of the leased property.

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