Montenegro's annual property tax is municipal. The Property Tax Act sets a band, and each municipality sets its own rates inside it by a council decision, then amends that decision, sometimes every year. Most pages that answer "what is the property tax in Montenegro" quote the statutory band, 0.25% to 1.00%, or one municipality's rate as if it were national. Neither tells an owner in Kotor what the bill will be.
We read the decisions. The table below gives the rates for dwellings in the six coastal municipalities where most foreign buyers own, taken from each municipality's decision as amended, with every amendment we located. It was checked against the municipal series of the Official Gazette on 28 September 2026.
The rates in six coastal municipalities
| Municipality | Main residence | Second home (secondary dwelling) | Business premises | Decision and amendments checked |
|---|---|---|---|---|
| Budva | 0.30% | 0.60% | 0.40% | Decision OP 43/19, Arts. 8 and 9; amendments 25/20, 40/20, 25/22, 64/25 |
| Kotor | 0.27% | 0.70% | 0.80% | Decision OP 49/19, Art. 11; amendments 1/21, 65/22, 69/25, 14/26 |
| Tivat | 0.25% | 0.56% if the owner does not live in Tivat; 0.30% if they do | 0.35% | Decision OP 53/19, Arts. 9 and 10; amendments 29/20, 44/20, 61/22, 27/23, 26/24, 23/26 |
| Herceg Novi | 0.25% | 0.55% | 0.50% | Decision OP 55/19, Art. 10, as replaced by the amendment in OP 46/21 from 1 January 2022; amendment 61/22 |
| Bar | 0.26% | 0.60% | 0.40% | Decision OP 51/19, Art. 8; amendments 57/23, correction 5/24, 65/25 |
| Ulcinj | 0.25% | 0.45% | 0.30% | Decision OP 37/23, Art. 14; amendment 40/26 |
"Main residence" means the dwelling that is the owner's place of residence; "business premises" is the rate for business premises and offices. Each municipality lists further categories, from garages and storage to unpermitted buildings and land; the table carries the three that decide most foreign owners' bills.
Two gaps we state plainly. Tivat's 2026 amendment lists an amendment in OP 51/24 that we did not find in that issue of the Gazette; none of the other amendments changed the dwelling rates. Herceg Novi's latest amendment we located is from December 2022. If a later one exists, it has not been indexed where we searched.
Why most foreign owners pay the second-home rate
Every one of these municipalities charges more for a secondary dwelling than for a main residence, and the Act decides which one you own. Under Article 11 of the Property Tax Act a dwelling is secondary if it is not the owner's place of residence or permanent stay, and a dwelling owned by a legal person is always secondary. A dwelling escapes the secondary category only if it is the owner's only dwelling in Montenegro and the owner has registered residence or permanent stay here.
A non-resident with one apartment in Budva meets the first condition and not the second. So does a company that holds the apartment. For a foreign owner the right column is usually the second one.
The municipalities apply this in their own words. Bar's decision spells out that a flat owned by a legal person is taxed as secondary. Tivat added a separate line in 2020 taxing dwellings owned by legal persons at 0.56%. Ulcinj's main-residence rate applies to a resident of Ulcinj, or to a Montenegrin citizen resident in Montenegro who owns no other dwelling in the country. Budva's main-residence rate also covers a dwelling that is the owner's only property in Montenegro.
The rate is the smaller half of the bill
The rate is applied to a market value the municipality calculates, not to your purchase price. Articles 5 and 6a to 6g of the Act build that value from an average price per square metre, multiplied by the area in the cadastre, corrected by a location coefficient and a quality coefficient, and reduced by 1% for each year of the building's age, up to 60%. The municipal decision sets the zones and the coefficients.
Those coefficients move more than the rates do. Kotor's March 2026 amendment cut its municipal coefficient from 1.10 to 0.95. Tivat's May 2026 amendment rewrote its corrective coefficients. Neither touched the rate. We explain the mechanism, and why the 2026 bills rose, in our guide to property tax for foreign owners.
A worked comparison, using an illustrative assessed value rather than a real one: if the municipality assesses a second-home apartment at €150,000, the annual tax is €1,050 in Kotor, €900 in Budva or Bar, €840 in Tivat for an owner who does not live there, €825 in Herceg Novi and €675 in Ulcinj. The same apartment as the owner's registered main residence would be taxed at €375 to €450, before the reductions Article 12 of the Act allows only for a main residence.
What changed in 2025 and 2026
The Property Tax Act was amended in October and November 2025 (Official Gazette 118/25 and 133/25), and a Constitutional Court decision published in Official Gazette 126/25 struck down the separate band for undeveloped building land. Three consequences show up in the municipal decisions:
- Buildings under construction are no longer taxed. Budva, Bar, Kotor and Ulcinj each deleted their "building under construction" rate in amendments between December 2025 and July 2026.
- "Other buildings" became "engineering structures". Budva, Kotor, Tivat and Ulcinj rewrote the category; Budva's business-premises line now reads "business buildings, business premises and engineering structures, 0.40%".
- Undeveloped building land lost its penalty rate. Kotor deleted its 0.60% rate for undeveloped building land in December 2025. Land now falls within the general 0.25% to 1.00% band.
None of these amendments changed the dwelling rates in the table.
The dates that apply everywhere
Whatever the municipality, the Act fixes the calendar. The owner registered in the cadastre on 1 January owes the whole year (Article 4). The municipality issues the assessment by 30 April, and the tax is paid in two equal instalments on 30 June and 31 October (Article 15). A new owner must file a return within 30 days of acquiring the property (Article 16), and the notary's own filing duty does not discharge it. We set out the full calendar and the fines in our property tax guide, and every Montenegrin rate in one table in Montenegro tax rates 2026.
Whose side we are on, and how we are paid
Every other professional around a Montenegrin transaction is paid out of the transaction. The agent's commission depends on the sale completing. The developer's sales team belongs to the developer. The notary owes duties to the act, not to you. That is not a scandal; it is simply how those roles are funded, and it decides what each of them is able to tell you.
We take no commission from sellers, developers, agents or brokers. None, in any form, on any file. The fee you pay us is our only income from your matter, and it does not increase if you sign. That single fact is the whole difference: because our position does not move when the deal moves, "do not buy this one" costs us nothing to say.
What that looks like in the file, rather than in a slogan: we obtain the register extracts ourselves instead of accepting the copies handed over by the seller or the agent; we read the contract against your position rather than against completion; we put in writing when the answer is that the matter should not proceed; and where a defect can be cured, we tell you what it costs in time before you commit money.
One boundary we state plainly. We are lawyers, not licensed investment advisers. We do not give personal investment advice on financial instruments and we do not tell you whether an asset will make money. What we protect is your legal position: the title, the contract, the registration, the status, and the deadlines that decide all four. That is the service the fee buys, and paying for it directly is precisely what allows it to be given without regard to whether you sign.
Before you rely on a rate
A municipal rate changes by a council vote and is published in the municipal series of the Official Gazette, not sent to owners. Whether you hold in your own name or through a company changes which column applies, and so does registering your residence. If the annual cost of holding a property is part of your decision, we check the current decision, the zone and the coefficient for the specific address before you sign. Property matters sit with our real estate practice; if you let the property, the municipality also charges tourist tax at the rates in our municipal table.
