In Four Years, 300 Million Euro Sold in Budva Real Estate

By , 06 Jul 2018, 13:24 PM Business
On the outskirts of Budva the price is 1.500 euros per square meter: Budva On the outskirts of Budva the price is 1.500 euros per square meter: Budva SHUTTERSTOCK

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July 6, 2018 - In Budva over the last four years, a total of EUR 300 million euro was sold in real estate. This is confirmed by a figure of nine million euro for the tax on the property sales, which the Budva municipality has calculated from 2014 to 2017.

When it comes to the amounts charged over the past four years, they exceeded the amounts calculated, bearing in mind that many have paid the debts from the previous years in this period.

This is stated in the responses submitted by the Ministry of Finance to the Democratic Republic of Montenegro delegate Mijoir Pejovic requesting accurate information on the calculated, collected tax on the real estate properties and the number of contracts concluded.

According to the law on the amount of the tax paid on the real estate property, 80 percent belongs to the municipality and 20 percent to the state. The law states that the tax on the real estate is proportional and amounts to three percent of the tax base representing the market value of the property at the time of the purchase. Keeping that in mind, as stated in the responses signed by the Minister of Finance Darko Radunović, during 2014, 2015, 2016 and 2017, the Budva Municipality calculated a total of EUR 9,043,237, therefore it is estimated that in this period, the sale and purchase of real estate was about 300 million euro. 

According to the data, most of the purchases took place in 2014, when the real estate sales tax amounted to 3,566,549 euro, i.e. 2,253 purchase contracts were concluded. The turnover was lower in 2015 when the tax amounted to 2,552,135 euro, i.e. 2,342 contracts were concluded. A fall in the real estate turnover is visible in 2016 when only 1,070,081 euro were charged for taxes, but 2,399 contracts were concluded. An increase in the real estate sale is evident in 2017 when 2,221 contracts were concluded and 1,854,472 euro was charged for tax purposes.

The Ministry argues that it is not a question of precise data, as there are contracts from previous years, as well as that taxpayers who are exempt from payment are also included in the calculated amounts.

When it comes to the amount charged, from 2014 to 2017, the Municipality of Budva has collected up to 12 million euro for the real estate’s property tax, as stated from Radunovic's office.

"The total amount of the property tax paid refers to payments made in the above-mentioned years, regardless of whether the payment relates to the obligation from the year in which the payment was effected or relates to an obligation from the previous period," said the Ministry of Finance.

 In 2017, the real estate market in Budva went through a revival, keeping in mind that numerous residential-business buildings, villas, apartments condo and apart-hotels were constructed in the area of Buljarice-Jaz.

The arrival of Turkish buyers refreshed the market further, so the price of a square meter jumped. Therefore, in the new buildings on the outskirts of Budva, one can hardly buy an apartment at a price below 1.500 euro per square meter, while in the first or exclusive seafront zone, the prices go up to six thousand euro.

Text by Vuk Lajovic, on July 5th 2018, read more at Vijesti

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