Selling property in Serbia while you live abroad

Before you advertise

The buyer's lawyer will start with the title sheet from the cadastre, so you should look at it first. You need to be registered as owner, with the right share. If you inherited the property, probate must be finished and the inheritance decision registered. A sale while probate is still open is not workable in practice.

Check also that your personal details in the cadastre match your passport. A changed surname or an old document number is easier to fix before a buyer is waiting.

We usually pull the title sheet and look at it with you before you set a price. It shows owners, shares, mortgages and notes of disputes, and it is the first thing a careful buyer asks for. A problem found at this stage costs a week; found after a deposit, it can cost the sale.

• you are registered as owner, with the right share
• no mortgage, notes of dispute or other encumbrances, or a plan to clear them from the price
• the building is registered with a permit or legalised
• utility bills and property tax are paid

The power of attorney

Your representative needs specific authority to sell this property. A general power of attorney is not enough. The document names the property by address, parcel number, cadastral municipality and unit, and says what happens to the money. Your signature on it must be certified, at a Serbian consulate or before a local notary with an apostille where needed.

The contract and the notary

A contract for the sale of real estate in Serbia must be made as a deed solemnised by a public notary. A contract in any other form has no legal effect. Your representative signs before the notary in your name.

Within 24 hours the notary sends the contract electronically to the cadastre, which forwards it to the Tax Administration. In that case you do not file a separate transfer tax return. The buyer is registered as owner in the cadastre afterwards.

The contract should tie handover to payment. Keys after the money is on your account. If the price is paid in instalments, say what happens when a payment is late. And write down who pays which tax and the notary fee, because the contract is where that is settled.

Transfer tax: 2.5%

Transfer tax on a resale is 2.5% of the contract price. If the price is below market value, the Tax Administration can assess the tax on market value instead. By law the seller is the taxpayer. Contracts often put the payment on the buyer; the buyer is then jointly liable as guarantor, but the seller stays the taxpayer.

There is no transfer tax when the sale is subject to VAT, which is usually the first sale of a new building by a developer. A resale by a private owner is not.

A non-resident seller must appoint a tax representative in Serbia and notify the Tax Administration within 10 days.

Capital gains tax: 15%

If you sell for more than you paid, the gain is taxed at 15%. The base is the difference between the sale price and the adjusted purchase price. For property you built yourself, the construction costs are indexed by the consumer price index.

• no tax after at least ten years of continuous ownership
• no tax on property inherited in the first order of succession
• no tax on certain transfers between spouses and close blood relatives, or between former spouses in a divorce
• no tax if the proceeds are invested within 90 days in solving your own housing needs; the return is then due within 120 days of the sale
• if you already paid and then reinvest within 12 months, you can ask for a refund

Filing, treaties and the money

The capital gains return is filed within 30 days of the sale. If you live in a country that has a tax treaty with Serbia and you can prove your residence there, the gain is taxed under that treaty. Your home country may also expect you to report the sale, so speak to your adviser there before you agree the price.

Ask the buyer to pay into a bank account in your name, not in cash and not through your representative. A Serbian bank will ask for the notarised contract when the money comes in and when you transfer it abroad. If you have no account in Serbia, plan ahead: banks usually want to see you in person to open one.

Frequently asked questions