Low buying costs in Serbia
December 18, 2017
How high are realtors’ and lawyers’ fees in Serbia? What about other property purchase costs?
|Real Estate Agent’s Fee||3%||buyer|
|Court Fee||0.05% - 1.0%||buyer|
|Registration fee||0.01% - 0.05%||buyer|
|Costs paid by buyer||3.06% - 4.05%|
|Costs paid by seller||5%|
|ROUNDTRIP TRANSACTION COSTS||8.06% - 9.05%|
| See Footnotes
Source: Global Property Guide
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.
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.
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 20%.
|PROPERTY VALUE (in RSD)||COURT FEES (in CSD)|
|Up to 10,000 (€83)||RSD980 (€8)|
|10,000 – 100,000 (€833)||1%|
|100,000 - 1 million (€8,333)||0.50%|
|Over 1 million (€8,333)||0.25%|