Buying a Villa in Montenegro: A Guide to Prices, Taxes, and the Best Locations

Buying a villa in Montenegro is an investment in an exclusive lifestyle in one of Europe's fastest-growing markets. With its picturesque coastline, mild Mediterranean climate, and EU candidate status, Montenegro remains exceptionally attractive to high-budget buyers.

Our guide will help you navigate the best villas for sale in Montenegro, covering everything from luxurious properties on the Budva Riviera to secluded residences in the Bay of Kotor. Buying a villa is ideal for those considering the country as a relocation destination, seeking residence permits based on property ownership, or seeking a high-yield, premium rental asset.

A full catalog of sea-view villas for sale is available on our real estate agency website: gomonte.me

1. Prices and Villa Market Analysis in 2025

1.1. Primary and Secondary Markets

The price of a villa is determined by the property's status. In the primary market, the price includes the use of modern technologies, developer warranties, full legal clearance, and, often, designer finishing. However, the secondary market offers a wider price range, with prices depending on the year of construction, the need for major renovations, and the area's liquidity. Resale villas in prestigious, older locations often have higher values ​​due to the unavailability of new plots in these areas.

1.2. Price Range: Market Segmentation

• Middle Class (up to $300,000): This range includes small villas or houses located inland (5-15 minutes' drive), or properties requiring significant renovation. These properties are often chosen for permanent relocation or long-term rental.
• Luxury villas (from $500,000): properties are characterized by exceptional locations (front or second line), designer renovations, large plots, and, as a rule, a swimming pool and panoramic views.

1.3. Factors Affecting Price

Key factors that can increase the price of a villa by 30-50% above the average price in the region:

• Proximity to the sea (front line)
• Panoramic views of the sea or the Bay of Kotor.
• Infrastructure
• Availability of a private berth or the possibility of renting a berth in a nearby marina.

1.4. Forecasts: Price Dynamics and Growth Potential

Analysis shows that the villa market will continue to show positive dynamics in 2026. Forecasts indicate potential for villa prices to grow by an average of 5-10% per year, especially in the premium segment, thanks to the continued influx of foreign capital, the stability of the euro, and strong interest in Montenegro as an EU candidate. Villas on the waterfront and in marinas demonstrate the greatest resilience to market fluctuations.

2. Top locations for buying a villa in Montenegro by the sea

Choosing a location to buy a villa in Montenegro depends on your priorities: whether you want to invest in historical prestige, an active tourist destination, or a tranquil getaway. Each location offers a unique set of advantages and different investment potential.

2.1. Bay of Kotor (Boka Kotorska): Investing in history and exclusivity

Boka Kotorska is the most prestigious and picturesque region, ideal for those seeking privacy and cultural treasures.

• Kotor: A historic center with villas perched on the slopes offering majestic views of the bay.
• Dobrota: Highly sought after due to its sunny location and the opportunity to purchase a villa with a private pier.
• Perast: The most exclusive market, where villas are often restored stone palazzos, serving as investments in historic Montenegro real estate.

2.2. Budva Riviera: Living in the Heart of the Action

The Budva Riviera is the choice for those seeking maximum liquidity, high rental yields, and proximity to entertainment.

• Budva: Offers the widest selection of properties, from modern villas on the hills to houses overlooking the Old Town.
• Becici: Ideal for family vacations, with new villa complexes and proximity to the best beaches.
• Sveti Stefan: Villas here belong to the ultra-premium segment. Buying in the Sveti Stefan area guarantees exceptional status and the highest rental rates.

2.3. Tivat and Luštica: Luxury Yachting

This region is synonymous with world-class luxury and state-of-the-art infrastructure.

• Porto Montenegro (Tivat): Although primarily a marina with apartments, modern villas designed for superyacht owners can be found in the surrounding area. Investments here are focused on yachting tourism and duty-free shopping.
• Luštica Bay: A large-scale "city within a city" under construction with golf courses and its own marina. Buying a villa in Luštica Bay is an investment in an organized, eco-friendly, and high-tech lifestyle.

2.4. Bar and Ulcinj: The Tranquility and Potential of the Southern Coast

The southern coast offers a more tranquil atmosphere and more affordable prices, as well as significant growth potential.

• Bar: The largest port, offering villas in areas with developed urban infrastructure. A choice for those who value practicality and year-round living.
• Ulcinj: The region is known for its long sandy beaches and unique Mediterranean nature. Villas in Ulcinj show good growth potential, as the region is just beginning to actively develop as a tourism destination.

View our agency's catalog of exclusive and family properties here: gomonte.me

3. Legal and Tax Aspects of Purchasing a Villa in Montenegro

A successful and secure purchase of a villa in Montenegro requires a thorough understanding of local legislation and the tax system. These aspects directly impact the final price and legal purity of your property.

3.1. Legal Status: Is it legal for foreigners to purchase a villa in Montenegro?

Purchasing a villa in Montenegro is legal and extremely simplified for foreign citizens. According to the Property Relations Act, foreign citizens can purchase villas, houses, apartments, and commercial real estate under the same conditions as Montenegrin citizens. The only exception is land designated as agricultural land (although a villa on such land can be purchased). The main requirement is that the property be registered with the Cadastre. 

3.2. Property Transfer Tax (Porez na promet)

After signing the purchase agreement, the buyer is required to pay a one-time tax:

The basic rate of the property transfer tax (Porez na promet nepokretnosti) is 3% of the market value of the property. The tax is paid on the amount stated in the expert appraisal, and not always on the contract price if it is lower than the market value. Important exception: If you purchase a new villa from a developer who is a VAT payer, you are exempt from this tax (3%), as VAT (PDV) is already included in the price.

3.3. Annual Property Taxes

Villa owners are required to pay local property taxes annually:

• Annual property taxes are local and are set by municipalities. The rate varies from 0.25% to 1.0% of the market value, which is determined by local authorities.
• The lowest rates generally apply to residential properties. In the most prestigious locations (e.g., the first line of the Bay of Kotor), a higher rate may apply, depending on the class and uniqueness of the property.

3.4. How to check the legal status of a villa

A legal due diligence is a crucial step that should be carried out by an independent lawyer:

• Cadastre (List nepokretnosti): It is necessary to obtain a recent extract from the Cadastre, which confirms the seller's ownership and the absence of encumbrances.
• Encumbrance Check: Particular attention is paid to encumbrances (hipoteka) (bank liens), litigation, or any indication of illegal construction. Purchasing a villa with unauthorized parts may require costly legalization.
• Construction Permit (Upotrebna dozvola): It is crucial to ensure that the villa has received an occupancy permit, confirming its safety and compliance with the design.

Our agency's lawyers will help you check the legal status of the transaction and prepare documents for obtaining a residence permit based on real estate ownership in Montenegro. Contact us for more information or a consultation: +382 69 777 680 Viber/WhatsApp/Telegram

4. Residence Permit through Villa Purchase: Step-by-Step Instructions

Obtaining a residence permit in Montenegro through the purchase of a villa is one of the most reliable and simple ways to legalize your residence in the country, directly related to real estate investments.

4.1. Legal Basis: Residence Permit through Real Estate

The right to temporary residence (privremeni boravak) is regulated by the Montenegrin Law on Foreigners. Legal grounds allow foreigners to obtain a residence permit in Montenegro through real estate of any type: apartments, flats, or, as in this case, villas. The key requirement is that the property must be residential and registered in the Cadastre in the applicant's name. 

4.2. Required Documents for Submission to the Ministry of Internal Affairs (MUP)

To submit an application to the Ministry of Internal Affairs (MUP), you must prepare the following basic documents:

• A completed temporary residence permit application form. An original or certified copy of the property deed confirming that the villa is registered in your name.
• A certificate from a Montenegrin bank confirming the minimum amount of funds for living expenses (usually approximately €3,650 per year).
• A medical insurance policy valid in Montenegro for 30 days.
• A document issued no more than six months ago in your country of citizenship (an apostille and certified translation are required).
• A certified copy of your passport and proof of registration at the villa's address.

4.3. Terms and Conditions for Renewing a Residence Permit

• A residence permit obtained through real estate ownership is issued for one year.
• The main requirement for renewing a residence permit is maintaining ownership of the villa. The status can be renewed annually indefinitely. The renewal procedure is simplified and requires an updated certificate of good conduct and financial security.
• Spouses and minor children also receive a residence permit under a simplified procedure based on family reunification.

5. Villa Profitability and Management: Passive Income in Montenegro

Buying a villa is not only personal ownership but also an opportunity to generate stable passive income. Effective monetization requires accurate profitability calculations and professional management.

5.1. Renting: Calculating Potential Profitability (Gross Yield)

A villa's potential profitability (Gross Yield) directly depends on its liquidity and the seasonality of the region:

• Villas on the Budva Riviera (Becici, Sveti Stefan) and Tivat (Lustic Bay area) demonstrate the highest profitability, thanks to the long tourist season and demand for premium vacations. Profitability here can reach 6-8% per annum.
• Villas in the Bay of Kotor (Dobrota, Perast) have a shorter but more expensive season, attracting a clientele interested in cultural tourism.

5.2. Management Company Services: Passive Income

For non-residents looking to generate income without operational involvement, a management company is the ideal solution:

• The management company takes care of everything: finding tenants (marketing), registering tourist documents (Bijeli Karton), villa maintenance, cleaning, and overseeing rental collection.
• Passive Income: Thanks to the management company, the owner receives passive income and minimizes the risks associated with property vacancy and depreciation. Choosing a reliable company specializing in luxury property management is critical to maintaining a high status and rental rates.

Entrust your management to the professionals at GoMonte. Learn more about management in our section: gomonte.me/services

5.3. Rental Income Taxes for Non-Residents

Non-residents are required to pay taxes on income from renting out a villa:

The rental income tax for individuals in Montenegro is a fixed 9%. The tax is paid monthly or quarterly based on net income (minus officially confirmed expenses). It is important to have a rental agreement executed in accordance with Montenegrin law to avoid penalties and legalize the source of income.

6. Conclusion

GoMonte offers more than just a catalog; it offers expert analysis of the luxury real estate market in Montenegro. Book a private consultation with our specialist now to receive a personalized selection of a villa in Montenegro that suits your investment goals and lifestyle requirements: +382 69 777 680 Viber/WhatsApp/Telegram

Catalog of exclusive and family-friendly offers from Tivat to Budva from our agency in the section: gomonte.me

Also read other articles from our experts:

Lawyer in Montenegro. How to choose and protect your rights: gomonte.me/blog/post/56

How to buy land in Montenegro inexpensively as a foreigner: gomonte.me/blog/post/44