Detailed Guide for Russians – How to Buy an Apartment in Serbia?

More and more foreign citizens, predominantly people from Russia, are opting to purchase real-estate in Belgrade. The real estate agency City Expert explains how to gather all the required documentation as a foreign citizen:

White card

After you’ve entered Serbia, the first thing you should do as a foreigner is to obtain the so-called “Beli karton”, or “white card” which is your residence registration in this country. In charge of registration for foreigners in Belgrade is the Police department of the city of Belgrade, department for Foreign visitors which is located at 35 Savska street. As a foreign citizen, you are obligated to report your stay and any change in address to the proper authority services within 24hrs of your arrival. You can do this online via the Euprava internet portal.

A bank account with a Serbian bank

After you have registered your residence address with the police, you should open an account in a Serbian bank. In order to open a bank account you need your passport and your “white card”.

Your marriage certificate

If you are visiting Serbia with your spouse, you must provide documentation of your marital state or proof that you are not married. In addition to this, you will need two witnesses and a court interpreter. All documentation except for your passport must be translated into Serbian and certified with a court interpreter’s seal, and you should also have the original documents with you to present with the translations and copies.

Witnesses and a licensed translator

The witnesses must be present for your visit to the public notary not only because of the language barrier, but also to guarantee that they have signed everything that was presented to them. The best advice for a foreign citizen regarding this procedure is to ask two friends or people they know who are already in Serbia to be their witnesses, but if that is not possible then you can hire witnesses for the price of RSD 3,000 per person. The court interpreter also charges for their services and the standard price ranges from EUR 60-80 per initiated hour.

Pre-contract for credit buyers

Pre-contract is a soft requirement which only pertains to credit buyers, but you can also compose one if you are paying in cash. Creating a pre-contract is the basis for transferring your funds from a foreign bank.

Contract for cash payers

If you would like to purchase your real-estate for cash, there is no need to create a pre-contract and a contract can be directly composed instead.

Money transfer

The best way is to transfer funds into your foreign currency account in Serbia, and then go through a Serbian bank to perform your transfer of funds. The recommendation is to inquire, before purchasing the real-estate, with the bank on the methods and speed of funds transfer. For example, how much time it takes for a large sum of money to be transferred from an account in Russia to an account in Serbia. It’s important to consider this information when choosing your bank in Serbia, because waiting times can sometimes be over 15 days long.

Also, cash payments are also possible, but only up to an amount of EUR 9,999 due to the Money laundering and terrorism financing Law which regulates such transactions.

Contract verifications

After everything has been checked, agents will send the documentation to the public notary, who may ask for additional documentation to be provided.

Clausula intabulandi

Once the funds have been deposited with the Serbian bank, the money is then transferred to the apartment seller’s account and they then issue the confirmation in the form of clausula intabulandi (which is the permission to enlist the real-estate into the real-estate cadastre which is signed by the seller).

After this, payments are made following the agreed-upon dynamic, and after the payment is made, the new owner is registered in the cadastre, making them the official owner of real-estate in Serbia. This makes it easier to obtain a permanent residence condition in Serbia.

No VAT or absolute rights transfer tax refunds

It is important to know that foreign citizens do not have the right to VAT or absolute rights transfer tax refunds.

Expenses surrounding apartment purchase:

These are the usual expenses involved with buying apartments in Serbia:

– Contract verification fee (this depends on the value of the real-estate, but is usually up to EUR 500)

– Court interpreter’s fee, usually around EUR 60-80 per initiated hour

– If you have no witnesses, RSD 3,000 per person

– Absolute rights transfer tax, which amounts to 2,5 percent of the real-estate value and is paid after the decision by the responsible tax management institution is issued (this is the highest expense)

– Bank expenses and commission fees

How can Russian citizens take out a housing loan in Serbia?

Because of the strain on funds, some foreign citizens opt to take out a housing loan in Serbia, but are unsure whether they are eligible for one, or the conditions they need to meet. The credit financial counselors of City Expert explain the procedures involved in taking out a housing loan for foreign citizens, explain reciprocity, give advice on the easiest way to take out a loan in Serbia and answer the question of what you need in terms of documentation:

Reciprocity and obtaining property rights in real-estate

In Serbia, only a few banks allow foreign citizens to apply for housing loans, but the main condition is that there must be reciprocity between the country of Serbia and the country of the foreign citizen.

Reciprocity is the right of an individual or legal entity from a foreign state to obtain real-estate ownership in Serbia, but only under the same conditions under which a Serbian resident can obtain the same in the foreign citizen’s country.

Diplomatic reciprocity means that there is a contract between the country of Serbia and the foreign citizen that explicitly defines reciprocity, or there is a most-favored nation clause, while factual reciprocity means the right of a foreign state to allow the residents of Serbia to obtain ownership in their territory under the same conditions that their citizens can do the same in our own country.

The state of Serbia has signed reciprocity with the Russian federation. Serbia also has reciprocity with these states.

What type of credit can foreign citizens apply for?

Foreign citizens may apply for two types of credit in Serbia - dinar credits and pure foreign currency credit.

It is important to also be aware that in compliance with the Law on foreign currency business, the funds provided by a purely foreign currency credit may only be accepted from a foreign citizen. In other words, if you were establishing a mortgage for a purchased apartment, the seller would have to be a resident of Serbia, or an existing real-estate owned by you or someone else could be provided.

Foreign currency housing loan in euros

If, for example, as a foreigner you would like to purchase an apartment in Belgrade through a foreign currency housing loan in euros, you would need to have a mortgage in your ownership, bonds or other mandated documents issued by the foreign citizen’s country of origin in full compliance with that country’s laws. This type of credit usually has a changeable interest rate and requires a minimum of 25% down payment and has a return payment period of 360 months.

Documentation required to take out a housing foreign currency loan in euros

The documentation you will need includes written proof of your current employment, issued by your employer, your monthly bank account income for period of last 12 months, a copy of your work permit from your passport, a Statement from a credit bureau in Serbia and from abroad, an excerpt from the property list of the responsible cadastre, a value estimation issued by an authorized appraiser and a pre-contract.

Housing loan in Serbian dinars

For a housing loan in dinars, it’s important to note that it is slightly less favorable seeing how it is issued to a shorter repayment period of 240 months and that the variable interest rate is higher compared to foreign currency housing loans. You must also pay a 25% down payment, but the advantage is that the real-estate doesn’t have to be in your name, but it can be a real-estate that you are purchasing by means of credit.

Documentation needed to take out a housing loan in Serbian dinars

The documentation you will need includes written proof of your current employment issued by your employment, your monthly bank account income for the period of last 12 months, a copy of your work permit from your passport, a Statement from a credit bureau in Serbia and abroad and an excerpt from the property list of the responsible cadastre, a value estimation issued by a certified appraiser and a pre-contract.

It is important to note that your account’s creditworthiness is calculated based on your income. The effective highest possible credit amount depends on your monthly income and the repayment time that you would take out a credit for, relative to your current age.

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