Can Russian citizens buy real estate in Serbia?

The real estate market in the Republic of Serbia, and especially in Belgrade, has been growing steadily since 2015.

The period of the global crisis, which began with the covid pandemic, and continued with the Russian military intervention in Ukraine, has and will continue to have a significant impact on further growth of the Serbian real estate market.

The unfavourable investment climate caused by the global economic instability in conjunction with challenges to make long term plans swindled investors into “locking” their capital in real estate, which led to increased demand and construction expansion worldwide.

The tendency of geostrategic repositioning make it difficult, if not impossible, to predict with certainty the period in which more favourable and less risky investment climate can be expected.

Therefore, investing in property market and real estate which value is constantly growing is likely logical and good way to maintain acquired capital in times of crisis.

Are there any restrictions for Russians or Ukrainians to acquire property in Serbia?

Generally, Russian and Ukrainian citizens may move their capital and buy residential and/or business properties in Serbia without any restrictions.

With regard to companies registered in the Republic of Serbia, which are owned by Russian citizens or Russian companies, there are also no restrictions at the moment, save for 12 Russian companies (which operate in the Republic of Serbia or have majority stakes in Serbian companies) in which the Russian state has majority ownership and which will be subject to EU Council sanctions starting from 15 May 2022.

Anyhow, according to local regulations, both Russian and Ukrainian citizens can purchase real estate in the Republic of Serbia, apartments and houses, with the exception of agricultural land, given that the Serbian Ministry of Foreign Affairs exchanged notes with the Russian Federation and Ukraine on the existence of reciprocity in real estate acquisition by the citizens of the said countries.

The procedure for buying real estate is regulated

The procedure of buying real estate in the Republic of Serbia is prescribed by strict rules, and typically takes place before the Notary Public who must certify the sale and purchase contract.

After the purchase agreement is certified, and the seller certifies the statement that he received the full purchase price, the Notary Public is obliged to forward the contract with the certified statement of the seller (‘clausula intabulandi’) to the Real Estate Cadastre within 24 hours to register the property rights of the new owner, which reduces the possibility of fraud and increases the legal security of the buyer of the apartment.

By registering the new owner in the Real Estate Cadastre, the owner of the apartment officially acquires the right of ownership over the apartment.

Anyhow, it is of  the utmost importance for the buyer to check the credibility of a seller and legal status of a property (real estate due diligence), ideally during negotiations with the real estate agents or sellers, but always before signing and notarizing the sale and purchase contract.

Is it necessary for the buyer to be present when acquiring the property?

Generally, it is not necessary for the buyer to be present for the notarization of the real estate sale and purchase contract.

In that regard, the buyer may issue a special power of attorney authorizing the person he trusts (usually a cousin, or a friend or even a trustworthy real estate lawyer) to conclude the purchase agreement in his name and on his behalf, as well as to perform other actions necessary to fully transfer property rights and settle tax obligations.

Property Transfer Taxes and Costs

The costs of buying an apartment are first reflected in the costs of certifying the purchase agreement.

The amount of these costs depends on the purchase price of the real estate and is determined on the basis of the notary public tariff.

In addition, a fee is paid for registration in the Real Estate Cadastre, possible bank commissions or official translations and notarization of documents.

When it comes to real estate taxes, newly built apartments that are purchased from investors are subject to VAT, which is paid directly to the investor at a rate of 10%, which is calculated on the amount of the purchase price of the apartment.

Unlike the purchase of an apartment under construction or brand new apartments, the buyer of older or resold apartments, instead of VAT, pays tax on the transfer of absolute rights at the rate of 2.5% of the market value of real estate determined by the tax administration.

Beside these taxes, which are paid once, the owner of real estate in Serbia pays an annual property tax.

The amount depends on whether the apartment is new or not, whether the owner is registered at the apartment address,  on the apartment surface and position of the building in the city (centre or suburban area).

For more info on this or any other legal, tax or business topic, please feel free to write to us at [email protected] at any time OR contact us via telephone number +381113281914 during working days from 08:30 to 16:30