Seven steps for foreigners to buy property in Serbia

You are not a Serbian citizen but are interested in buying real estate in Serbia? Still want to know if it is possible to buy property in Serbia, what are the procedures and costs? We decided to provide answers to frequently asked questions for our foreign customers.

1) Check whether citizens of your country are eligible to purchase real estate in Serbia

Have you decided to invest in real estate in Serbia? The first thing on the to-do list is to check whether citizens of your country have the right to acquire property in the Republic of Serbia and under what circumstances.

In order to find this out, you must check whether there is a bilateral agreement between your country and the Republic of Serbia, which provides for the acquisition of the property of a national of that country in another country. In the absence of such an agreement, it is necessary to check whether the two countries have reached actual reciprocity. If you need simple instructions on how to find the answer to this question, be sure to read our blog post “Foreigners can buy property in Serbia”.

It should be emphasized that the purchase of agricultural land is exclusively reserved for Serbian citizens. The exception is the ability of EU citizens to obtain agricultural land under very limited conditions.

If the answer is yes and you can buy real estate in Serbia as a foreigner, you should proceed to the next step, which is to find a suitable real estate, inspect the real estate, reach a price agreement and gradually realize it.

If citizens of your country cannot obtain property in Serbia, you can overcome this obstacle by establishing a company in Serbia. As explained in detail in the blog post “Establishing a Company in Serbia” (Step 7), foreign legal persons and natural persons can establish a company without any restrictions. Not only that, foreigners can also establish so-called “special purpose tools” to obtain agricultural land through domestic legal entities.

2) Determine the property and conduct due diligence

After finding a suitable property, it is necessary to conduct real estate legal due diligence. What does it mean? In addition to on-site inspection of the property, legal due diligence must also be conducted on the property to check whether there are encumbrances, mortgages, and notes on the property. The real estate industry has encountered many problems in Serbia, starting from real estate for sale in Serbia that has not yet been registered in the real estate registry, to real estate constructed without the permission of the competent authority, real estate in dispute, etc. Therefore, you should exercise caution when choosing real estate and buying or selling it. Your due diligence.

In Serbia, only real estate lawyers have professional training and can provide you with advice on buying real estate in Serbia.

3) Drafting the purchase agreement

In addition to conducting legal and factual due diligence on the property, you will also need a real estate lawyer who works in a real estate law firm to take the next step – drafting the purchase agreement. Once the two parties have agreed on the price, payment method, and deadline for the transfer of the property, the lawyer writes the wishes of the buyer and the seller on paper. The lawyer also manages the method of transferring purchase funds.

4) Before notarization

After the contracting parties have reached an agreement on all terms, it is necessary to order the certification certificate of the agreement at the notary office. If the location of the notary public is within the scope of the property in question, the notary public is eligible. The contracting parties sign the agreement on the confirmation document drafted by the lawyer and the notarization clause in front of the notary. However, please remember that at that time the buyer had not yet become the owner of the relevant property.

5) Payment of purchase price and property transfer

The buyer pays the agreed purchase price, and the seller transfers the property on the real estate to the buyer. The purchase price shall be paid by transferring funds from the buyer’s account to the seller’s account. The transfer of ownership takes place when the seller allows the buyer to enter the real estate and provides the transfer of the keys.

6) Real estate intermediaries go through the formalities

After certification, your work is still not completed, because foreigners must submit an application for registration of ownership at the public registration center. In the Bureau of Geodesy of the Republic, its department is the real estate cadastre department, which is responsible for real estate registration on the RS territory. Therefore, it is necessary for the buyer to submit an application for registration of ownership to a qualified real estate cadastre. The Cadaster Administration of Real Estate issued a decision authorizing the registration of the ownership of the purchased property and ending the property acquisition process. In other words, the purchaser should become the owner only when the real estate management decision that allows the registration of ownership in the name of the purchaser becomes the final decision.

7) Taxes and public expenditure

After reaching an agreement and purchasing real estate, some other activities should be carried out to purchase real estate.

When buying a property in Serbia, you will be charged an absolute right transfer tax. The seller (as a taxpayer) should submit a tax return within 30 days from the date of certification, which is a formal statement of an agreement signed with a notary public. However, in practice, it is more common that the contracting parties agree to the buyer to pay the tax. Therefore, the agreement stipulates that the buyer should pay the absolute right transfer tax, although the seller should pay the tax in accordance with the following provisions: law.

The tax rate is 2.5% of the market value. If the agreed price is higher than the market price, the tax will be calculated at the agreed price. The market value is assessed by the competent tax authority.

In addition to the absolute right transfer tax (which only needs to be paid once during the purchase of each property), a property tax return is also required. Property tax is determined based on an annual decision and is paid quarterly. The tax rate for real estate with a value not exceeding 10 million dinars is 0.4%, while the tax rate for real estate with a higher value is 0.4%.

In order to complete the entire process of buying a property in Serbia as a foreigner, the account holder of a qualified company must also be changed (for example, electricity, water supply, etc.).

Foreigners buying property in Serbia – summary of 7 steps

common problem

How much does the buyer cost to purchase real estate in Serbia?

The cost of buying a property in Serbia depends on the value of the property itself. The higher the value, the higher the cost.

In addition to the purchase price and the accompanying bank transfer fees, in the actual ownership transfer, the buyer also needs to keep in mind the following fees:

Absolute right transfer tax: 2.5% of the market value of the property
lawyer fee
The cost of notary public certifying the agreement in this agreement
Property registration fee.

What paperwork is required to buy an apartment or house in Serbia?

Natural persons must provide personal documents of both the buyer and the seller. Foreign natural persons must submit passports, while foreign legal persons must submit a copy from the registration form of the competent business entity. The copy must be legalized or provided by Apostille (unless issued by the customs authority). Serbia has concluded with the country on the cancellation of the legalization of foreign documents Countries), and certified by a court interpreter. In addition, before the agreement is formally effective in the presence of a notary, the real estate bill for the property subject to the agreement should be immediately submitted to the real estate cadastre in charge to prove the seller’s ownership. In addition, the seller should provide evidence to prove whether the property sold is his special property or marital property.

What kind of reciprocity applies when acquiring property in the Republic of Serbia through transfer between living entities? What kind of reciprocity is obtained through the transfer of Mortis causa?

The law does not regulate this issue, but from the point of view that there is no need to enter into a contract (diplomatic) reciprocal relationship with a foreign country, but in fact, this is sufficient to issue a permit to citizens of the Republic of Serbia to acquire property on the foreign territory (de facto reciprocity).

Similarly, foreigners can assist each other in inheriting real estate on the territory of the Republic of Serbia based on assumed facts, and the stakeholders in the procedure may prove the opposite. If you need more information about the rights of foreigners to own real estate in Serbia, be sure to read our blog post “Foreigners can buy property in Serbia”.

Tagged Serbia Real Estate, Real Estate Buying property in Serbia for foreigners in 7 steps
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