Serbia: Guide to Buying Costs and Procedures

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Low buying costs in Serbia

How high are realtors’ and lawyers’ fees in Serbia? What about other property purchase costs?

How difficult is the property purchase process in Serbia?

The Foundations of Property Law Relations of 1996 states that the reciprocity principle is the general rule that governs property and property rights acquisition in Serbia. Foreign individuals and legal entities can easily acquire property if the said property is necessary to their business. Foreigners can also easily acquire houses and apartments even if they are not performing business operations. However, foreign ownership of property is restricted near military land and on city construction plots.

In Serbia urban (or construction) land is owned exclusively by the state. Urban land, however, can be leased for a minimum of five to a maximum of 30 years. In interest of constructing buildings for commercial purposes, investors can acquire property rights or rights to use land outside of land ownership. Ownership of buildings and apartments is not restricted. Foreign individuals who cannot own land through reciprocity can circumvent this restriction by incorporating themselves in Serbia.

Once a property has been chosen, the buyer makes an offer. Once the seller accepts the offer, both parties sign a preliminary purchase agreement and have it notarized. Upon signing the preliminary contract, the buyer pays a 10% deposit, which is non-refundable in case the buyer changed his mind. The buyer’s solicitor can now start examining the title deed of the property and its history as well as the rights of the seller to dispose the property. When all is in order, a completion date is written into the original contract and the whole process takes around six weeks to complete. The final contract is signed in the presence of a public notary. The finalized and certified contract establishes the legal ownership of the property. Once ownership is confirmed, the Inland Revenue Office determines the value of the property, and the buyer pays the 5% property tax based on the estimated value of the property. Once this is accomplished, the property can then be registered with the local Area Property Registry. The buying process is complete upon payment of the agreed price.

Registering a property in Serbia requires six procedures and takes 186 days to complete.

Footnotes to Transaction Costs Table

The round trip transaction costs include all costs of buying and then re-selling a property – lawyers’ fees, notaries’ fees, registration fees, taxes, agents’ fees, etc.

Real Estate Agent's fee:
The Real Estate Agent's fee, 3% of the purchase price, is generally paid by the buyer.

Registration fee:
Registration of property is submitted to either the Municipal Court Land Register (RSD3,250 or €41.56) or to the Cadastre (RSD4,212.60 or €53.87). There is an on-going program of transferring all proeprty registration from the Land Register to the Cadastre. It is expected that by 2010 all registration processes will be handled by the Cadastre.

Transfer Tax:
18% VAT is imposed on new buildings as of 01 January 2005.

VAT:
First transfer of right of use of a residential property is subject to 8% VAT. Otherwise, first transfer of the right of use of new buildings or parts therefore is subject to the normal VAT rate of 18%.

Court fees:
The court verifies the documents, similar to notaries in other countries. Fees are based on the following schedule:

Serbia - more data and information

• How high are estate duties in Serbia?

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