Real Estate Taxes in Serbia: How Much to Pay When Buying and Owning (2025 Guide)
Tax on Resale Property Purchase: 2.5% for Rights Transfer
The acquisition of resale property in Serbia is subject to a one-time absolute rights transfer tax (Porez na prenos apsolutnih prava). The rate of this tax is fixed at 2.5% of the property's value.
The responsibility for paying this tax lies entirely with the buyer. It is important to note that the tax base is determined either by the amount specified in the sales contract or by the market value assessment of the property conducted by the tax authority. The higher of the two amounts is used for the calculation, which protects the budget from undervaluation in contracts.
Buying a New Build: 10% VAT (PDV) and Refund Specifics
The tax situation for purchasing new-build property is fundamentally different. Instead of the rights transfer tax, the buyer pays Value Added Tax (PDV), which is 10% in Serbia. Typically, developers already include this tax in the final price of the apartment.
Thus, when buying a property directly from a developer, you do not pay the 2.5% tax, but the price already includes 10% VAT. There is an important detail regarding the refund of this tax: this option is provided for by law, but it is available exclusively to Serbian citizens purchasing their first home. Foreign citizens are not entitled to a VAT refund.
Hidden Costs: Notary, Cadastre, and Translators
In addition to the main taxes, the process of buying real estate in Serbia is accompanied by a number of additional, so-called 'hidden' costs. These must be taken into account when planning your budget to avoid unpleasant surprises.
- Notary services. The cost of notary services depends on the property price and is regulated by an official fee schedule. It is important to remember that a 20% VAT is added to the notary's fee.
- Cadastre fees. Mandatory fees are charged for registering the new owner in the state real estate registry (Cadastre).
- Court translator services. If the buyer does not speak Serbian, their presence at the notary appointment is mandatory, and their services are paid for separately.
Annual Property Ownership Tax (Porez na imovinu)
Every property owner in Serbia is required to pay an annual property tax (Porez na imovinu). This is a local tax, and its calculation depends on several factors, making the amount unique for each property.
The calculation formula is quite complex, but its main components can be simplified to the following scheme: Location Zone * Property Area * Depreciation Coefficient (depends on the year of construction). The more prestigious the area and the newer the building, the higher the tax will be.
There is a significant benefit for owners who permanently reside in their property. In this case, a 50% discount on the tax amount is provided, which is formally called amortization. This encourages owners to use their housing for personal residence.
Tax on Sale: 15% on Capital Gains (Kapitalna dobit)
If an owner decides to sell their property for more than they bought it for, the resulting difference (capital gain) is taxed at a rate of 15%. This tax is known as Kapitalna dobit.
However, Serbian legislation provides two legal ways to be fully exempt from paying this tax. To do so, one of the following conditions must be met:
- Own the property for more than 10 years. After this period, any capital gain from the sale is completely exempt from taxation.
- Reinvest the funds into a new home. If the seller, within a period specified by law (usually 90 days from the date of sale), uses all the proceeds to purchase a new property to resolve their housing issue, they are also exempt from paying capital gains tax.
Taxation of Rental Income
Income received from renting out property is also subject to taxation. The rental income tax rate for individuals in Serbia is 20%.
The owner is obliged to declare such income independently and pay the corresponding tax. It should be noted that in recent years, Serbian tax authorities have tightened control over the rental market, actively identifying undeclared income. Therefore, timely and full payment of the tax is not only a legal requirement but also a way to avoid fines and penalties.