Bitcoin for an apartment by the sea - Is it possible to buy real estate with cryptocurrencies in Montenegro?

At a time when cryptocurrencies are setting records, and the value of the real estate market is growing at a rapid rate, the question arises whether it is possible to buy an apartment or a house in Montenegro and pay with bitcoins? The answer is - yes. Namely, despite the fact that Montenegro does not yet have a regulated crypto-property law, some agencies offer the possibility of paying for real estate with crypto-currencies. According to unofficial information, some transactions were also carried out, so by the end of last year, three notarial records were drawn up on the purchase and sale of cryptocurrencies.

- There are real estate agencies in Montenegro, especially in coastal cities like Budva and Tivat, which offer the possibility of paying for real estate with cryptocurrencies, including Bitcoin and Ethereum. Also, some luxury resorts promoted this option with the aim of attracting foreign investors. Although there are reports on realized sales, they cannot be submitted to other persons for review, so specific examples are not widely documented. However, according to some unofficial information, by the end of 2024, three notarial records on the purchase and sale of cryptocurrencies have been drawn up - Radoš Kuč, founder of the Digitron Accounting agency, said in an interview for eKapija.

We were also interested in how real estate tax is paid. Kuč clarifies that from January 1, 2024, Montenegro applies a progressive tax on the sale of real estate, according to the following rates

- The tax is paid exclusively in euros, regardless of whether the payment was made in cryptocurrencies. The tax liability is reported to the Tax Administration, and in most cases, the notary submits the tax return on behalf of the party when certifying the contract. It is important to note that VAT is additionally payable for new construction. It is also the duty of notaries to submit contracts on the purchase and sale of cryptocurrencies to the Police Directorate and the Department for Financial Intelligence (FIU) - says Kuč.

- The rate of tax on capital gains is 15%, and natural persons are required to submit an annual tax return no later than March 31 of the current year for profits realized in the previous year. This process can be complex due to the volatility of cryptocurrencies and the need to prove the purchase price, which requires keeping a record of transactions, he says.

And do banks allow funds from cryptocurrencies to be converted and deposited into the seller`s account before the sale? The interlocutor of eKapija says that banks in Montenegro do not support direct transactions with cryptocurrencies due to the lack of regulation and strict rules, which to some extent led to the withdrawal of one regional crypto-exchange from the Montenegrin market.

- That is why today in Montenegro there are no regulated crypto-exchanges or payment providers mediating these transactions. However, funds from cryptocurrencies can be converted into euros via foreign platforms and paid into the seller`s account, but banks often require proof of the origin of the money, which can complicate the process - says Kuč.