Guide to Property Taxes in Serbia
Effective Tax Rate on Rental Income |
|||
| Monthly Income | €1,500 | €6,000 | €12,000 |
| Tax Rate | 15% | 15% | 15% |
Nonresidents are generally subject to Serbian tax on income derived from Serbian sources. Individuals are taxed separately rather than through joint taxation of married couples.
Rental Income Tax
Rental income earned by a nonresident individual from Serbian real estate is generally subject to income tax at a flat rate of 20%.
The taxable base is the gross rental income reduced by a statutory 25% standardized expense deduction. Alternatively, the taxpayer may claim actual expenses incurred in earning and maintaining the rental income, provided that the expenses are properly documented.
Using the standard 25% deduction, only 75% of gross rental income is taxable, producing an effective income-tax burden of approximately 15% of gross rent.
Capital Gains
Capital gains realized by a nonresident individual from the disposal of Serbian real estate are generally subject to tax at a flat rate of 15%.
The taxable capital gain is broadly calculated as the difference between the property's sale price and its tax-recognized acquisition cost, subject to the applicable adjustment and valuation rules.
An exemption can apply where the property has been owned continuously by the taxpayer for at least 10 years before disposal.
Corporate Taxation
A nonresident company is generally subject to Serbian corporate income tax on profits attributable to a permanent establishment in Serbia. The standard corporate income-tax rate is 15%.
Separately, certain Serbian-source payments made to nonresident legal entities are generally subject to 20% withholding tax. These can include dividends and profit distributions, interest, royalties, certain service fees and payments for the lease of Serbian real estate or other assets.
The withholding-tax rate may be reduced or eliminated under an applicable double taxation treaty, provided the relevant treaty requirements are satisfied.
Property Buying Costs and Taxes in Serbia
Transaction Costs |
||
| Who Pays? | ||
| Real Estate Agent's Fee |
2.00% 2.00% |
buyer seller |
| Notary Fee | 0.10% - 0.50% | buyer |
| Legal Costs | 1.00% - 3.00% | buyer |
| Transfer tax | 2.50% | buyer |
| Costs paid by buyer | 5.60% - 8.00% | |
| Costs paid by seller | Unlock | |
| ROUNDTRIP TRANSACTION COSTS | Unlock | |
Annual Property Tax
Serbia imposes an annual property tax on owners of real estate located in Serbia, including nonresident individuals. The tax is administered by the relevant local municipality or city.
For individuals who do not keep accounting records, property tax is generally calculated using progressive rates based on the taxable value of the property. The applicable rate and property value therefore depend on the municipality, location and value of the real estate. We at GlobalPropertyGuide have calculated the average tax rate to be ~0.4% of the property value.
