Understanding Local Rental Laws
Article 109 in Tourism Law
Step 1: Register Property
All rental properties must be registered with the local municipality (Opština) office, so the first thing I did was visit the office in Kotor, as the property I was registering is located in Prčanj, Montenegro.
Please note that I am providing links to PDF documents when available for reference purposes, and you can easily translate them online. When you visit the office, they will provide you with hard copies of the forms that you need to fill out manually.
Checklist of Things You Will Need to Complete:
1. Proof of Ownership (List nepokretnosti) - obtained from Local Land Registry Office (Katastar)
- If it is an illegally constructed building, submit proof of the request for legalization of the building to the Secretariat for Urbanism, Construction and Spatial Planning of the Municipality of Kotor.
- If there are two or more co-owners, submit the consent of all co-owners that the specified activity can be performed in the facility.
2. Photocopy of the identity card or travel document for a foreigner if the applicant is a natural person
3. FORM - Statement on fulfillment of minimum technical requirements regarding space, equipment and means for performing hospitality activities in accordance with Article 79 of the Law on Tourism and Hospitality ("Official Gazette of Montenegro No. 2/18)
STATEMENT
Property at the address meets the prescribed minimum technical requirements for performing hospitality activities in a household in terms of space, equipment and facilities in accordance with Article 79 of the Law on Tourism and Hospitality (Official Gazette of Montenegro 2/18 and 13/18)
4. FORM - Completed ANNEX 3 - CHECKLIST (PRILOG 3 - CEK LISTA) - Categorization standard for rooms for rent to tourists, tourist apartments, tourist apartment blocks and houses for rent to tourists.
UGOSTITELJSKE USLUGE U DOMANČINSTVU I TURISKTIČKOM APARTMANSKOM BLOKU
Instructions for filling out the form: – data is entered: in text (CAPS, BLOCK LETTERS), by marking “x” in field □ or by circling the field – data in unshaded fields is entered by the applicant for performing hospitality activities / requesting for issuing a permit for performing hospitality activities – data in shaded fields is entered by the competent local government body / state government body responsible for tourism affairs.
5. FORM - Catering services in a household in a tourist apartment block (Popunjen Obrazac Ugostiteljske usluge u domacinstvu turistickom apartmansko bloku ili popunjen) or completed Form - Camp (Kamp)
P R I J A V A PRUŽANJA UGOSTITELJSKIH USLUGA U DOMAĆINSTVU
Translated:
Registration of Catering Services in a Household
6. Receipt of payment of 3.00 EURO registration fee - pay this in person not online as the form indicates!
Once the property has been registered your forms will be submitted to the correct office within municipality (Opština) office. You will need to provide a local phone number where you can be contacted for next steps. I was contacted a few days after I submitted the forms and returned to the municipality (Opština) office 29 to sign additional documents.
Step 2: Energy Performance Certificate (Energetski Certifikat)
This step varies for different municipal (Opština) offices, so try not to stress beforehand; just wait for the next step. When I visited the municipal (Opština) office 29 to complete the additional forms in step 1, I was informed that there would be a site visit as well. A few days later, I received a call, and within hours, several employees from the municipal (Opština) office came to inspect the apartment. Everything was in perfect order, and I was informed that we would receive the rental permit for Villa Suncani with a category 4 rating. I was told that I could pick up the rental permit in a few days at the same municipal (Opština) office 29.
Step 3: Registration of Guest Books
- Guest Book – Popis gostiju
- Complaints book – Knjiga žalbi
The Complaints Book (Knjiga žalbi) must be at the disposal of guests so that they can add comments.
Step 4: Rental Permit
Rental Income Tax
Rental income must be reported annually. The declaration should be submitted by April 30 of the following year to the tax authorities of the municipality where the property is located. The tax rate is 15% of the net income. Stay tuned for another blog post with more info on this!
4 Responses
Good to know thanks as we are thinking about renting out our villa. Can I ask where you advertise and do you have to set up a bank account just for the rental income – ie you must have costs to net off your turnover?
Hi
We created Adriatic Vacation Rentals to advertise our properties and also advertise Villas for other owners that are near the Adriatic Sea. The website is new so we just starting with SEO, social media and marketing but have plans to increase all marketing soon. If you are interested in marketing your property through our site I would be happy to provide you the options.
Please see our Villa near Kotor for an example:
https://adriaticvacationrentals.com/vacation-rentals/villa-suncani-kotor-montenegro/
We also provide a digital guidebook and printed version for your guests to streamline their experience.
We currently to not offer bookings through our website and use Airbnb for all bookings. You can have Airbnb deposit the money into any bank account that you want. As Montenegro uses EUROs you want to have the bank account that you have setup also to be an EURO account. Alternatively you can also setup a Wise account. I will write an additional blog post about the rental income but basically you pay 15% taxes in Montenegro on 50% of the rental income (you do not get to deduct any costs as you are already get a break on only paying the taxes on half of the income). Please reach out if you have any questions or are interested in listing your property.
Thanks!
Yes could be interested in this – we also have a pool villa in Prcanj – a bit further down from you towards the Hyatt hotel. We do have a bank account with ckb. Will probably be using a dedicated villa company like Olivers Travels for bookings but having another listing platform might be useful for exposure. Flying out on Wed – would you be free for a quick coffee sometime (before Monday when we fly back) to discuss? Can send a bit more info if useful. Kind regards Charlotte and Luke
Hi
I will send you an email to provide you with my contact info.
Thanks!