How changes to property taxation affect the real estate market in Montenegro

Amendments to Montenegro’s Law on Property Tax have drawn significant attention from both citizens and investors. After the law was adopted during the parliamentary session on October 13, and parts of its provisions were later declared unconstitutional by the Constitutional Court, the country’s real estate market has entered a period of legal and financial uncertainty.
Although municipalities still have broad autonomy to determine coefficients and the actual tax burden, the announced adjustments and new interpretations of “market value” raise a key question: Will owning property in Montenegro become more expensive, and how will these changes affect prices, rental costs, and investment decisions?

The most important amendments to the Property Tax Law

The most important amendments to the Law on Property Tax relate to the method of determining market value, the expanded role of municipalities in setting the final tax rate, and a clearer distinction between categories of apartments, buildings, and land. Although the basic tax range of 0.25% to 1% remains unchanged, local governments now have even greater autonomy in defining coefficients, which directly affects how much property owners will pay. You can read all amendments to the law here.
The law also more precisely defines what qualifies as taxable real estate, while some previously disputed provisions — such as taxing buildings under construction — have been temporarily suspended following the Constitutional Court’s decision.

Provisions declared unconstitutional by the Constitutional Court

The Constitutional Court struck down key provisions that introduced new categories of taxable objects, such as “buildings under construction” and “other structures,” ruling that the legislator exceeded its authority since these categories do not exist in Montenegro’s current Law on Construction of Buildings.
The Court also annulled the provision that imposed a tax rate of 0.3% to 5% on undeveloped construction land, determining that increased taxation based on land use unlawfully interferes with private property rights and restricts ownership contrary to the Constitution and international human rights standards. To prevent a legal vacuum, the Court ruled that its decision will formally take effect on December 24, 2025, allowing time for the law to be harmonized with the Constitution.
Read the full details here: https://www.ustavnisud.me/ustavnisud/objava/blog/7/objava/228-ustavni-sud-ukinuo-odredbe-zakona-o-porezu-na-nepokretnosti. 

How will these changes shape Montenegro’s real estate market?

While the legislator’s intention was to introduce clearer criteria and improve tax collection, the annulment of unconstitutional provisions shifts the focus back to legal certainty for citizens, investors, and municipalities. The ultimate impact on the real estate market will depend on how the new solutions are drafted - whether they establish a more stable and transparent framework or open the door to additional challenges in implementation. What remains certain is that any change in tax policy directly influences investment decisions and the long-term development of Montenegro’s property market.

We have emphasized many times that the real estate market is dynamic and constantly evolving. That is why having a partner who truly understands the market and supports you through every step - whether you are buying, selling, or renting property - is essential. If you are looking for professional guidance or expert advice, contact Amfora and make confident, informed decisions with a team you can trust.