Exploring the pros and cons of building your own villa versus buying a ready home in Montenegro’s 2025 market.
Build or Buy? What’s Better for a Foreign Investor in Montenegro
For many foreign investors, Montenegro remains one of the most dynamic real estate markets in Southern Europe. But the big question is still the same — is it smarter to build a new villa or buy an existing one in 2025?
1) Buying Ready Property
Buying an existing home or apartment offers immediate access and far fewer variables. You avoid construction delays, get predictable costs, and can move in or start renting right away. Legal frameworks for ownership transfers are well-defined, and foreigners can freely own property.
- Pros: Immediate use, low risk, clear legal process, rental income from day one.
- Cons: Limited choice, higher € per m², occasional older standards or documentation issues.
In 2025, sea-view apartments in Tivat or Budva average €3,800 – 5,500/m². Modern villas with pools range from €5,000 – 8,000/m², depending on the location and view.
2) Building a New Villa
Building allows you to design exactly what you want and often enter the market at a lower base cost. In 2025, turnkey construction averages €1,400 – 1,900/m² for modern villas with solid quality and finishes.
- Pros: Custom design, lower cost, potential 25–30 % equity gain on completion.
- Cons: Requires local expertise, patience with permits and utilities, 12-18 months timeline.
Plots with approved UTU (Urbanistic-Technical Conditions) are essential — without them, permitting can take additional months.
3) Timeline Comparison
- Buying: 2 – 4 weeks → search, notary, ownership transfer.
- Building: 12 – 18 months → permits, design, construction.
4) Investment & Rental ROI
Montenegro’s rental market continues to grow in 2025. Sea-view apartments and villas in Tivat, Lustica and Kotor show net yields of 6 – 9 % per year under competent management.
New villas with private pools and flexible layouts often achieve break-even within 8–10 years.
5) Legal & Tax Framework in 2025
Foreign citizens can own property directly in their name. Below are the current purchase-related taxes and fees valid for 2025:
- Up to €150 000 → 3 % of purchase value.
- €150 001 – €500 000 → fixed €4 500 + 5 % on amount above €150 000.
- Over €500 000 → fixed €22 000 + 6 % on amount above €500 000.
For new-build properties sold directly by developers, RETT does not apply — VAT 21 % is already included in the listed price.
- Annual property tax: approx. 0.25 – 1.0 % of official value (higher in tourist zones).
- Notary & legal fees: € 400 – 1 000 depending on property value and translation needs.
- Registration & municipal fees: typically 1 – 1.5 % of the transaction value.
These updated rates replace the old flat 3 % system and make high-value deals progressively taxed. Always confirm final numbers with a local lawyer or tax advisor before signing the contract.
6) When Buying Makes More Sense
If you want a residence or income property ready to use this season, buying is the more efficient route — especially when purchasing from reputable developers with all permits and occupancy certificates.
7) When Building Makes More Sense
If your goal is a custom villa, long-term value growth, or a branded rental project, construction remains highly viable in 2025 — particularly in the Lustica and Tivat areas.
- Land purchase & due diligence (1–2 months)
- Design & permits (3–5 months)
- Construction (9–12 months)
- Finishing & landscaping (1–2 months)
8) Final Thoughts
Both options — buying and building — remain attractive in Montenegro’s 2025 market. The key is understanding your timeline, risk tolerance, and target return.
Our team at Eco-Build Montenegro works with investors on both sides of this equation — helping clients identify the right plot or ready property, handle all documentation, and manage construction to completion.
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