Property Related Taxes in Bosnia and Herzegovina
Tax Rate on Rental Income |
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| Monthly Income | €1,500 | €6,000 | €12,000 |
| Tax Rate | 10% | 10% | 10% |
Bosnia and Herzegovina (BiH) has a decentralized tax system. The two principal entities are the Federation of Bosnia and Herzegovina (FBiH) and Republika Srpska (RS), while the Brčko District operates a separate tax system.
Nonresident individuals are generally subject to tax on income arising from sources within Bosnia and Herzegovina, subject to the rules of the relevant jurisdiction and any applicable double-tax treaty.
Rental Income Tax
Income from renting real estate situated in Bosnia and Herzegovina is generally taxable in the jurisdiction where the property is located.
In the Federation of Bosnia and Herzegovina, rental income earned by individuals is generally subject to personal income tax at 10%. Taxable rental income is determined after applying the deductions permitted under FBiH tax law.
In Republika Srpska, rental income is also subject to the applicable personal income tax rules. The taxable base and available deductions should be determined under the current RS legislation.
Capital Gains Tax
Capital Gains are taxed under the normal personal income tax with a rate of 10%
Corporate Tax
The standard corporate income tax rate is 10% in both the Federation of Bosnia and Herzegovina and Republika Srpska.
Corporate rental income and taxable gains from real estate are generally included in taxable corporate income. Qualifying business expenses incurred in generating taxable income may generally be deducted in determining taxable profit.
Foreign companies may be subject to corporate income tax on income attributable to their activities, permanent establishments or other taxable sources within the relevant jurisdiction, subject to domestic law and applicable double-tax treaties.
Property Buying Costs and Taxes in Bosnia and Herzegovina
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Transaction Costs |
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| Who Pays? | ||
| Transfer tax | 0.00% - 5.00% | buyer |
| Notary fees | 0.10%- 0.20% | buyer |
| Legal fees | 0.10% - 0.50% | buyer |
| Real Estate Agent Fee | 2.00% - 3.00% | seller |
| Total costs paid by the buyer: | 0.20% - 5.70% | |
| Total costs paid by the seller: | 2.00% - 3.00% | |
| ROUNDTRIP TRANSACTION COSTS | 2.20% - 8.70% | |
| Source: Global Property Guide, PWC, KPMG | ||
Property Holding Tax
Bosnia and Herzegovina does not impose a single nationwide annual property tax.
In the Federation of Bosnia and Herzegovina, property taxation is primarily governed at the cantonal level. Consequently, the tax base, rates, exemptions and types of property subject to annual taxation vary between cantons.
It is therefore preferable not to state a nationwide FBiH property-tax range of 0.05%–1.00%. The actual annual liability should be determined according to the canton and municipality in which the property is situated.
In Republika Srpska, a separate annual real estate tax regime applies. The tax is generally based on the assessed value of the real estate, with the applicable rate determined within the limits established under RS law.
