If you’re looking for holiday home locations, Serbia might not be the first place that comes to mind, but it definitely should be considered. This guide is here to help anyone thinking about investing in property in Serbia.
### Why Choose Serbia?
Eastern Europe is becoming increasingly popular with tourists, mostly because it’s more affordable than the usual European destinations. Although Serbia doesn’t attract as many tourists as Croatia, this means it’s less crowded and offers authentic, untouched holiday experiences. The Daily Mirror even calls it “one of Europe’s best-kept tourist secrets.”
Because there aren’t as many tourists, property prices in Serbia are typically lower than in neighboring countries. While prices have been dropping since the 2008 financial crisis, recent economic reforms have strengthened the real estate market, leading to a nearly 20% rise in the past two years. This is a great opportunity for smart investors to:
– Take advantage of low property prices.
– Benefit from a growing tourism industry for better rental income.
– Gain potential profits from capital appreciation when selling the property.
### How to Purchase Property in Serbia
Even though Serbia isn’t part of the EU, the property buying process is pretty straightforward for UK citizens. The key is reciprocity: you can own property in Serbia if Serbians can own property in your country. Since Serbians can buy land in the UK, Brits are allowed to own property in Serbia.
The buying process can take anywhere from a few days to a month. Once your offer is accepted, both parties sign a purchase agreement, which is notarized. Then, you pay 10-15% of the total purchase price as a deposit, and a solicitor checks the title deed. After all documents are confirmed, the final contract is signed in the presence of a notary, making you the legal owner. The process concludes with the final payment.
### Renting Your Property
If you’re a foreign property owner, it’s advisable to hire a local property management service for peace of mind and professional tenant management.
Finding potential tenants in a growing holiday market like Serbia can be tricky. Listing your property on holiday rental websites can help attract a larger audience, ensuring your investment is secure.
Sites like OwnersDirect often let you list your property for free initially and only charge fees when a booking is made. They can also handle bookings, customer service, and other management tasks.
### Costs and Taxes
Serbia’s low buying costs make it an appealing investment destination:
– Property transfer tax is around 2.5% of the property’s value, and real estate agents typically charge about 3% commission.
– For new builds, the transfer tax is replaced by an 8% VAT, which increases buying costs.
– Standard property ownership taxes are similar to those in other countries in the region.
– There’s a flat-rate income tax of 20% on rental income, but you can deduct expenses like management fees, maintenance, and insurance.
– Capital gains tax, also at a flat rate of 20%, applies when you sell the property.
This guide should set you on the right path to making a smart investment in Serbia’s emerging property market.