Serbia: Overview

RENTAL YIELDS

Last Updated: Feb 16, 2009

4.08 to 4.97% rental yield range in Belgrade

Gross rental yields on apartments in the upscale municipalities of Belgrade are poor, with an average yield of 4.68 %, based on the Global Property Guide’s survey of high-end apartments located in Stari Grad, Novi Beograd, Savski Venac, Vracar, Vozdovac and Zvezdara.

Average rental yields in most parts of Belgrade range from 4.08 to 4.97 %. The exception is Savski Venac, which has slightly higher rental yields, averaging 5.33%. Dedinje and Senjac, which are located in Savski Venac, are the most popular neighborhoods for expatriate families. Most international schools and embassies are here. These two districts are also near the city centre.

Apartment sales prices in Belgrade’s six upscale municipalities average EUR 2,838 per square metre. The highest average square metre price was recorded in Vracar, at EUR3,351, followed by Stari Grad, at EUR3,017, Novi Beograd, EUR 2,888, Savski Venac, EUR 2,595, and Zvezdara and Vozdovac at EUR 2,284.

Vracar and Stari Grad are popular with singles and couples. They also have the lowest number of newly constructed units, due to lack of available construction sites.

Danijela Ilić, President of the Serbian National Association of Appraisers, says that a 10% price drop in the prices of new apartments is likely. “Sale of apartments is considerably lower. Banks have increased the interest rates for residential loans and there are fewer potential buyers, those who can buy a flat”.

Read Rental Yields  »

TAXES AND COSTS

Last Updated: Nov 21, 2008

Serbian rental income taxes are moderate

Effective Tax Rate on Rental Income
Monthly Income	€1,500	€6,000	€12,000
Tax Rate	16%	16%	16%
Click here to see a worked example
Source:			Disclaimer

Rental Income: Net rental income earned by non-residents is taxed at a flat rate of 20%, withheld by tenant.

Capital Gains: Capital gains tax in Serbia is imposed at flat rate of 20%.

Inheritance: Inheritance taxes are imposed at progressive rates from 3% to 5%.

Residents: Residents are taxed on their worldwide income.

Read Taxes and Costs  »

BUYING GUIDE

Last Updated: Apr 12, 2007

Low buying costs in Serbia

Roundtrip transaction costs, i.e., the total cost of buying and selling a property, are around 8% - 9% of the property value. Transfer tax is around 5% of the property value. The real estate agent’s commission is about 3%. However, newly built dwellings attract 8% VAT instead of transfer tax, bringing transaction costs up.

Read Buying Guide  »

LANDLORD AND TENANT

Tenancy laws

Research is ongoing.

ECONOMIC GROWTH

Last Updated: Jul 21, 2008

The last remnant of Yugoslavia

After Montenegro voted for independence in 2006, the Union of Serbia and Montenegro was officially dissolved. The Union was the last remnant of the former Yugoslavia, which once included Bosnia and Herzegovina, Croatia, Macedonia, Montenegro, Serbia and Slovenia. With the dissolution of the union, Serbia inherits membership of the United Nations and other international institutions.

Serbia’s long history of conflict and revolutions, however, is far from end. Kosovo in south western Serbia is also waging a war of independence. Kosovo is currently administered by the United Nations after violence flared up in 1998. UN sponsored talks on the status of Kosovo are continuing.

With rising global fuel and food prices, the lingering fears over inflation evoked harsh memories of the hyperinflation period. After the dissolution of Yugoslavia in the early 1990s, prices have risen by 5 quadrillion percent (5 with 15 zeroes after it) between October 1993 and January 1995.

Hyperinflation subsided when Serbia adopted the Deutschemark as an official currency in 1995 along side with the dinar. However, inflation was still running high with an average annual inflation of 40% from 1995 to 2000.

Inflation was down to 6.8% in 2007, the first time in two decades that annual inflation was down to a single digit. Inflation was 15.9% in June 2008, with full year inflation expected to reach 11.5%.

After expanding by 7.3% in 2007, the economy is expected to slow down in 2008 with a GDP growth rate of 4%. The economy grew by an average of 5.3% from 2001 to 2006. As Serbia aligns its policies with the EU in its bid for membership, steady investment growth is expected.