Real Estate Laws and Regulations to Know in Serbia

Published on January 17, 2026 and written by Cyril Jarnias

Buying, renting, transferring, or managing real estate in Serbia can be very attractive, but the legal framework is dense and far from intuitive for a foreigner. Between the principle of reciprocity, a fully digitized cadastre, specific taxation, and the central role of the notary, every transaction requires advance preparation. This article provides a structured overview of the key rules to know before engaging in Serbian real estate, with a particular focus on foreigners’ rights, taxation, and administrative procedures.

Property Ownership and the Principle of Reciprocity

The starting point for a non-Serbian remains the principle of reciprocity. Serbia allows foreigners to acquire real estate provided that Serbian citizens can, in practice, purchase similar property in the buyer’s country of origin. This reciprocity can be established by a bilateral agreement or simply observed in the customary practices of the country in question.

The authorities that may be consulted to verify reciprocity are primarily the Ministry of Justice, the Ministry of Foreign Affairs, and, in practice, the cadastre. A formal request for a finding of factual reciprocity can be filed, subject to administrative fees.

For foreigners, the range of accessible properties is quite broad: apartments, houses, offices, retail spaces, warehouses, as well as the land underlying an acquired residential building. However, access remains strictly regulated for certain strategic categories – agricultural land, forests, military zones, border strips, and protected areas.

Agricultural Land, Vacant Land, and Specific Restrictions

One of the most sensitive aspects of Serbian property law concerns agricultural land. The Agricultural Land Law prohibits both foreign individuals and foreign companies from becoming direct owners. Given that agriculture represents a significant share of GDP and employment, the legislature has tightly secured this resource.

Besides agricultural land, other restrictions apply:

To legally bypass these limits, the most common solution is to establish a limited liability company (DOO) in Serbia. This company, considered a domestic entity, can then purchase agricultural land or vacant land for the needs of its business activity. Foreigners can hold 100% of the shares, provided they comply with activity codes and operational obligations.

The General Legal Framework for Real Estate

Serbia has a comprehensive legislative arsenal governing virtually all aspects of real estate: ownership, construction, urban planning, taxation, contractual relations, restitution, inheritance. Among the key structuring texts are notably:

This body of law exists within a civil law system, with strong formalization of deeds and central importance of the land register, which has constitutive value for rights arising from transactions.

The Cadastre System: Transparency and Legal Security

Real estate ownership in Serbia is proven by registration in the real estate cadastre, managed by the Republic Geodetic Authority (RGZ). This unified, online-accessible register lists for each parcel: location, land type, buildings, right holders (owners, usufructuaries, mortgage creditors), as well as any encumbrances and restrictions.

Public access to the cadastre is one of the strengths of the Serbian system: any interested party can freely check essential information online, while a paid access adds details like owner identification numbers and the complete history of encumbrances. This transparency facilitates due diligence prior to acquisition and limits the risks of double sale or uncertain titles.

The Central Role of the Public Notary

Since the introduction of the modern notary system, the public notary is the legal architect of every real estate transaction in Serbia. Any transfer of property rights over real estate (sale, mortgage, donation, acknowledgment of debt secured by a real property pledge) must be executed in the form of a notarial deed. A private sale contract not transformed into a notarial deed is null and void.

The competent notary is in principle the one in the jurisdiction where the property is located for deeds involving a transfer of ownership. For mortgages and certain specific deeds, any Serbian notary can intervene. The notarial deed can take two forms:

Notaries are required to electronically transmit deeds to the cadastre and tax authorities within a very short timeframe, feeding the automatic registration system. In practice, it is therefore often the notary who initiates the cadastral registration procedure on behalf of the parties.

Steps of a Property Acquisition in Serbia

Although each case has its particularities, most acquisitions follow a relatively standardized process.

After the property search, the first important step is the title verification. A retained lawyer will check in the cadastre: the owner’s identity, continuity of registrations, absence of mortgages, undesired easements, disputes, or restitution risks. They will also verify the land type (agricultural, buildable, wooded) and the building’s urban planning compliance (building permit, occupancy permit, legalization decisions if applicable).

Once these points are clarified, the parties can conclude a preliminary agreement, often accompanied by a deposit of 10% to 20% of the price. This preliminary agreement sets the sale conditions, payment schedule, and any suspensive conditions (financing, mortgage clearance, cadastral regularization).

Legal advice on real estate transactions

The final contract is then signed before the notary, in the presence, if applicable, of spouses, a sworn interpreter, and witnesses, if one of the parties does not speak Serbian. The price can be expressed in euros, even though payment must go through the banking system. Payments above a relatively low threshold cannot be made in cash: bank transfer is mandatory, and attempts to split cash payments are illegal.

Once the contract is signed, the notary transmits the deed to the cadastre and tax services. The transfer of ownership is then registered, usually within a few days to a few weeks. The buyer then receives a registration certificate confirming their status as owner.

For a foreigner, establishing a Serbian company or obtaining a tax identification number are integral parts of the preparation, as is the translation and authentication of all personal documentation (passport, birth certificate, and possibly marriage certificate).

Transaction Costs: Who Pays What?

The overall cost of a real estate transaction in Serbia is not negligible. It breaks down into professional fees, transfer taxes, and administrative fees. In practice, the following split is common:

Cost Item	Usually Borne By	Indicative Range
Real Estate Agency Commission	Buyer and Seller	Approx. 2% each
Lawyer’s Fees	Primarily Buyer	1% to 3% of price
Notary Fees (deed)	Generally Buyer	0.10% to 0.50% of price (capped)
Property Transfer Tax (excluding VAT)	Legally Seller, often Buyer	2.5% of value
Cadastre Fees (registration)	Buyer	Approx. 30 to 50 euros
Translations & Interpretation	Foreign Buyer	200 to 500 euros depending on volume

Adding these elements, the buyer typically bears between 5.6% and 8% of the property price, while the total “round-trip” cost (buyer plus seller) ranges between 7.6% and 10%. For new constructions, VAT must be added, which replaces the transfer tax.

VAT or Transfer Tax: How Does It Work?

Serbia applies two distinct regimes depending on whether it is a new building transferred for the first time by a VAT-registered entity or a second-hand property. The general VAT rate is 20%, but a reduced rate of 10% applies to certain properties, notably new residential housing.

The main lines are as follows:

Type of Transaction	Applicable Tax	Main Rate
First sale of a new residential building	VAT	10%
First sale of another new building	VAT	20%
Resale of a building (old) or land	Real Estate Transfer Tax	2.5%
Lease for strictly residential use	Exempt from VAT	—
Transfer of land (excluding VAT transactions)	Real Estate Transfer Tax	2.5%

For transfers subject to VAT, it is the seller (e.g., a developer) who collects and remits it to the tax authority. The tax is most often included in the advertised sale price. For a new home purchased from a developer, the private buyer therefore does not pay the 2.5% transfer tax, but indirectly bears the 10% VAT.

The leasing of housing for residential use is exempt from VAT, without the right to deduct upstream VAT, which weighs on the profitability of landlords who bore the tax on their investments.

Annual Property Taxes

Once an owner, resident or non-resident, one must pay an annual property tax on assets located in Serbia. This targets the holder of property rights (ownership, use, usufruct) and applies to both individuals and legal entities.

The tax base is, in principle, the market value of the property as estimated by the local authority. For companies keeping fair value accounting, the book value serves as the base. Municipalities define zones, property categories, and average prices per square meter, to which coefficients are applied based on the building’s age and zone characteristics. The usable area includes all interior floor space (excluding balconies and terraces).

Property Value (RSD)	Maximum Rate Applied to the Bracket
Up to 10 million	0.40%
From 10 to 25 million	Up to 0.60% on the excess
From 25 to 50 million	Up to 1.00% on the excess
Over 50 million	Up to 2.00% on the excess

Relief exists for the primary residence. A property owner who actually lives in their home can benefit from a 50% reduction of the tax, with a cap of 20,000 dinars. Multiple resident co-owners share this reduction pro-rata to their shares.

Individuals over 65 years old can obtain a 75% reduction on a small area (up to 60 m²) if the home is neither rented nor used for professional purposes. The property declaration must be filed with the local tax administration, and the tax can be paid in a single annual installment or in four quarterly installments.

Taxation of Rental Income and Capital Gains for Individuals

Rental income of Serbian source is taxable in Serbia, whether for residents or non-residents. For individuals, the law provides a flat-rate deduction for expenses, then applies a proportional rate.

The mechanism is as follows: start with the gross rent, deduct a flat percentage (25%) for presumed expenses, then tax the result at 20%. The effective rate on the gross rent is therefore 15% if using the flat-rate deduction. The landlord can, alternatively, opt to deduct their actual expenses if they are properly documented and higher than the flat-rate deduction.

On the sale of a property, the real estate capital gain is in principle taxed at 15% for individuals. The capital gain is calculated as the difference between the sale price and the acquisition price (adjusted for certain fees and expenses). However, several exemptions play a decisive role for long-term investors or family transfers:

Non-residents are also taxed on capital gains of Serbian source, in principle at the effective rate of 15%, but a withholding tax of 20% may apply for non-resident companies, unless a double taxation treaty stipulates otherwise. They must file a specific declaration within 30 days following the transfer, often through a tax representative.

Taxation of Real Estate Companies and Professional Investors

For resident companies, real estate activities (development, leasing, transfer) fall within the scope of corporate income tax, at the standard rate of 15%. Capital gains realized on the transfer of buildings or shares in real estate companies are included in the taxable profit, although losses and capital gains receive specific treatment, with separate tracking of capital losses carryable forward for five years.

Transactions between related parties – which includes many intra-group real estate operations, sales of buildings to a subsidiary, or financing by a foreign parent company – must comply with transfer pricing rules. The company must document that the price charged corresponds to market conditions, using recognized methods (comparable uncontrolled price, cost plus, resale price, transactional net margin, profit split). This documentation is attached to the annual tax return.

Passive Income of Non-Residents: Withholding Taxes

Serbia applies a fairly broad system of withholding taxes on income paid to non-residents, which directly impacts foreign real estate investors.

In many cases, this withholding tax can be reduced or even eliminated thanks to the double taxation treaties signed by Serbia with over sixty states. These treaties often limit the withholding rate on dividends, interest, royalties and may reserve the taxation of real estate capital gains to the country where the property is located. However, the investor must provide appropriate certificates of residence and comply with procedures to request the treaty rate.

Construction Regulation and Permits

For any construction, extension, or reconstruction project in Serbia, the Law on Planning and Construction imposes a precise administrative path, now largely digitalized. The so-called “unified” procedure centralizes, via an electronic portal, the issuance of essential documents.

Based on these conditions, the investor has a licensed engineering bureau prepare the construction permit project. This project undergoes independent technical control. The administration must then issue (or refuse) the construction permit within a short deadline, the legal target being around twenty business days for complete files. The permit is valid for several years, with the obligation to start work within a set period, under penalty of expiration.

These permits are very important for the real estate investor: a building lacking a definitive occupancy permit may face problems with utility connections, mortgage financing, sale, and insurance. Notaries are obliged to clearly inform the parties when a building or part of a building has an irregular status (illegal construction, undergoing legalization, or built after the last regularization campaign).

Notion of Illegal Properties and Associated Risks

Serbia, like many countries in the region, has experienced a proliferation of constructions built without permits, especially during the transition years. The legislature has established legalization procedures for constructions visible on official aerial imagery at a reference date. These buildings can, under certain conditions, be regularized afterwards and, in the meantime, be subject to transactions, but the buyer assumes the full risk of denial of legalization or subsequent demolition.

Therefore, due diligence prior to purchase must necessarily include verification of construction and occupancy permits, or, failing that, any legalization decisions already obtained.

Property and Inheritance: Transferring an Asset in Serbia

The inheritance of real estate located in Serbia is governed primarily by Serbian law, regardless of the deceased’s nationality. The principle is that immovable property is governed by the law of its location. For a foreigner owning an apartment in Belgrade, the division of this asset will therefore follow Serbian inheritance law, even if the overall succession is partly governed by the law of their last domicile.

For foreigners, two elements are crucial. First, the use of a will compliant with Serbian formal requirements or an international convention on the form of wills, which can be drafted either under Serbian law or under the testator’s national law, provided the choice is clear. Second, the probate procedure takes place before the local court of the last domicile in Serbia or, in the absence of residence, the court of the property’s location. The partition deed or the probate decision then serves as the basis for registering the transfer in the cadastre.

Lease Regulation and Landlord-Tenant Relations

The leasing of real estate is regulated by relatively flexible rules for commercial premises and more detailed ones for housing. Lease contracts must, in principle, be in writing for apartments, which facilitates evidence in case of dispute and tax regularity.

An important point for investors is that if the leased property is sold, the buyer in principle takes over the current lease and becomes the creditor of rent as of the next due term. The stability of lease contracts is thus ensured, which facilitates the valuation of leased assets.

From a tax perspective, as seen earlier, rental income generated by a non-resident in Serbia is subject to taxation at a rate of 20% after deduction, the responsibility falling, depending on the case, on the rent payer (withholding at source) or the landlord.

Foreign Ownership, Residence, and Investment

Owning real estate in Serbia does not automatically confer a right of residence, but it can be a favorable element in an application for temporary residence. Authorities may issue a residence permit based on the ownership of a habitable dwelling, connected to utilities, allowing the applicant to actually reside in the country. There is no fixed investment threshold, but the reality and quality of the accommodation are examined.

Investors furthermore benefit from the protection of the many investment treaties and tax conventions signed by Serbia, which provide, among other things, protection against expropriation without adequate compensation, equal treatment, and access to international arbitration in certain cases.

Conclusion: An Attractive but Highly Regulated Market

Serbian real estate law combines appreciable advantages for a savvy investor – cadastral transparency, capital gains taxation favorable to the long term, moderate inheritance taxes within the family circle, the possibility to structure local vehicles – and real constraints, particularly for agricultural land, irregular constructions, and the taxation of Serbian-source income for non-residents.

By mastering these rules, a foreign investor can operate within a relatively predictable and secure legal framework, an indispensable condition for any sustainable real estate strategy in Serbia.