Procedure for foreigners to buy real estate in Serbia

Author of the article:

Vladimir

Serbia real estate specialist

Date:  29.09.2024

Reading time: 10 min.

Views:  98

Serbia has become increasingly attractive to foreign investors looking to invest in real estate in recent years. The combination of affordable prices, picturesque scenery and growing tourism makes this country a real find for those looking for a profitable investment. In this article we will take a detailed look at the process of buying real estate in Serbia for foreigners, including legal aspects, step-by-step guide and required documents.

Here's a brief summary of what to expect:

• Legal aspects of buying real estate for foreigners.
• A step-by-step guide to the buying process.
• Required documents for a successful transaction.
• Financial aspects, including taxes and duties.
• Risks buyers may face.
• Attractiveness of Serbia as an investment destination.

Now let's delve into the details and understand how to successfully purchase real estate in this amazing country!

1. Legal aspects of buying real estate for foreigners

When it comes to buying real estate in Serbia, the first thing to understand is the legal aspects. Serbian law allows foreigners to buy real estate, but there are some nuances to be aware of. For example, you can freely buy apartments and houses in cities, but with land plots is more complicated. In most cases, foreigners can only buy land plots that are intended for construction. However, if you plan to buy agricultural land, you will have to go through additional procedures and possibly obtain permission from the local authorities.

Serbia also has a number of agreements with other countries that can simplify the buying process. For example, if you are a citizen of a country with which Serbia has signed a mutual investment agreement, you will be able to access more favorable conditions when buying real estate. Therefore, before you start your search, make sure you are aware of all the legal intricacies.

2. How to buy real estate: A step-by-step guide

Now that you are familiar with the legal aspects, let's move on to the practical process of buying real estate. I will walk you through each step so that you can move forward with confidence.

Step 1: Search for a property

The first step is, of course, finding a suitable property. I recommend starting with real estate agencies in Serbia, as they can offer you a wide range of choices and professional assistance. For example, I myself used the services of one of the agencies in Belgrade and was pleasantly surprised by their level of service. Also, don't forget about online platforms where you can find a lot of ads from private sellers. Do not hesitate to ask questions and clarify details - this is your future home or investment!

Step 2: Object validation

Once you have found a property you are interested in, it is important to do your due diligence. I would highly recommend contacting an experienced lawyer who can help you make sure that the property has no encumbrances or title issues. For example, an acquaintance of mine, while buying an apartment, encountered a situation where the previous owner failed to pay off the bank and the apartment ended up in foreclosure. A good lawyer can help you avoid such troubles.

Step 3: Preliminary Contract (Predugovor)

When all the checks have been passed and you are ready for the transaction, the next step is to conclude a preliminary contract. This document records your intentions and the terms of the deal. Usually, when signing a preliminary contract, the buyer makes a deposit, which is about 10% of the value of the property. This is a kind of "pledge" of your seriousness. Make sure that the contract spells out all important terms and conditions, such as deadlines and obligations of the parties.

Step 4: Final Contract (Ugovor o kupoprodaji)

Now that the preliminary contract has been signed, it is time for the final contract. This document includes all the details of the transaction and is signed before a notary. I remember how nervous I was when I signed my final contract. But the notary explained all the nuances to me and I felt I was on the right track. After signing the contract, the notary will register the transaction in the official registries, which is an important step to protect your rights.

Step 5: Registration of real estate in the cadastre

The last step is to register your property with the Serbian Land Registry. This process may take some time, but it is necessary in order to confirm your rights to the property. Usually, registration takes from a few weeks to a few months, depending on the workload of the cadastral office. Don't forget that without this registration you won't be able to fully dispose of your property, so don't miss this step!

Now that we have broken down the basic steps, let's move on to the necessary documents to buy real estate in Serbia.

3. necessary documents for buying real estate

When you are already at the finish line, it is important to know what documents you will need for a successful transaction. Having faced this task myself, I can tell you that preparing all the paperwork is an essential part of the process. Here is a list of the basic documents you will need:

Buyer's documents

1. Passport: This is the main document that will prove your identity.
2. Tax number (JMBG): This number is required to register a transaction and to access various services in Serbia. If you do not have it, a lawyer can help you get it.
3. Bank documents: You will need to open an account in a Serbian bank for financial transactions related to the purchase of real estate. Usually banks require proof of source of income, so be prepared to provide the relevant documents.
4. Sale and Purchase Agreement: This document will be drafted at the final contract stage.

Facility documents

Now let's talk about the documents regarding the property itself:

1. Title to property: This is the main document that confirms ownership of the property. Make sure the title is up to date and free of encumbrances.
2. cadastral plan: This document will show the boundaries of your property and help you avoid misunderstandings with your neighbors.
3. Building permit (if applicable): If you are buying a new building, make sure that the developer has all the necessary permits. I remember my lawyer carefully checking all the paperwork before I signed the final contract and it really helped to avoid problems.

4. Financial aspects of the purchase

Now that you have collected all the necessary documents, let's discuss the financial aspects of buying real estate in Serbia. This is an important stage that should not be ignored, because the success of your transaction depends on it.

Taxes and duties

There are several taxes and fees you need to consider when buying real estate in Serbia:

1. Property transfer tax: It is usually about 2.5-3% of the value of the property. This tax is payable upon registration of ownership.
2. Value Added tax (VAT): If you are buying a new-build property, you will need to pay VAT, which is 20%. Make sure this tax is factored into your total purchase price.

Bank transfers

Do not forget to open an account in a Serbian bank for all financial transactions. This will simplify the process of transferring funds and help you avoid additional fees. I opened an account with one of the major banks, and this made all stages of the transaction much easier.

Cost of legal and notary services

Do not forget about the costs of a lawyer and a notary. Usually the cost of legal support ranges from 500 to 1500 euros, depending on the complexity of the transaction. Notary services can cost around 100-300 euros. I recommend discussing all financial aspects with your lawyer in advance to avoid unexpected costs.

5. Risks when buying real estate in Serbia

As in any other country, buying real estate in Serbia involves certain risks. I have encountered some of them myself, and it has taught me to be more careful.

Now that we have broken down the main risks and financial aspects, let's move on to why Serbia is so attractive to investors.

6. Why is Serbia attractive for investors?

Serbia is becoming increasingly popular among foreign investors, and this is no accident. Let's take a look at a few key factors that make this country attractive for real estate investments.

Growth in tourism and rental income

Serbia is experiencing a real tourist boom. Every year the number of tourists visiting the country is increasing. For example, more than 3 million tourists visited Serbia in 2022, which is 20% more than the previous year. This opens up excellent opportunities for short-term rentals. In cities like Belgrade and Novi Sad, the demand for rental apartments is increasing, which can provide you with a steady income. I myself have seen friends who bought an apartment in the center of Belgrade quickly start earning money from rentals, especially during the tourist season.

Affordable prices and high profitability

Real estate prices in Serbia remain quite low compared to other European countries. For example, you can find a cozy apartment in the center of Belgrade for between 1,500 and 2,500 euros per square meter. This is significantly lower than in major cities in Western Europe. At the same time, rental profitability can reach 7-10%, which makes investing in real estate in Serbia very attractive. I remember when I first saw apartment prices in Belgrade, I was amazed at how affordable they were compared to the same cities in Western Europe.

Stable economic situation

Serbia demonstrates stable economic growth, which also attracts investors. The government is actively working to improve the business climate by introducing various reforms and support programs. For example, in recent years there has been an increase in foreign investment in the country's economy, which contributes to the creation of new jobs and improvement of infrastructure. This, in turn, has a positive impact on the real estate market.

Considering all these factors, Serbia appears to be a great place to invest in real estate. However, as in any other endeavor, it is important to approach the process with intelligence and caution.

Conclusion

In conclusion, buying real estate in Serbia for foreigners is a process that requires care and preparation, but it also opens up many opportunities for profitable investments. Serbia offers attractive prices, a growing rental market and a stable economic situation, making it an ideal investment destination.

If you want to learn more about the process of buying real estate in Serbia or you need help in this matter, do not hesitate to contact our company. We are ready to offer you professional assistance and support at every stage of the transaction. Contact us