Below we provide a systematic guide on purchasing real estate in Serbia for foreigners. The guide should be of interest to those who are thinking of buying some real property in Serbia. We have broken the process into six steps.
Step 1. Reservation of the property
After you have found a suitable piece of property, you can ‘reserve’ it for a certain period that you can discuss with the seller. Normally, it is between one week and one month. You will have to make a deposit. In most cases, the deposit will be kept with the real estate agent or a lawyer rather than the property owner.
If the apartment costs €100,000, the amount of the deposit is usually between от €1,000 and €5,000 – you will have to negotiate the exact amount with the seller. The seller undertakes not to sell the property to any third party while your agreement is valid. The deposit can be returned if there are good reasons to cancel the deal. The property reservation opportunity is seldom used in practice.
Step 2. Preliminary purchase agreement
When you have chosen the property to buy, you have to sign a preliminary purchase agreement with the property owner in front of a notary public. It has the same legal force as the final agreement does and contains a description of the property, the price, the down payment amount (usually 10% of the property price) as well as the date by which the final agreement is to be signed.
In addition, the preliminary agreement will say that the seller has the right not to return the deposit if the buyer refuses to finalize the deal or if he/ she cannot pay the full sum by the set date.
The down payment (kapara in Serbian) remains with the seller if the buyer does not finalize the deal. If the seller is the one who wants to cancel the deal before it is finalized, he/ she returns twice the amount of the down payment to the buyer.
If the preliminary agreement has been signed and the first payment has been made but the deal has not eventually been finalized, the realtor bear no responsibility for the failure. According to the law, the real estate agent can ask for his/ her commission to be paid when the preliminary agreement is signed. Legally, the deal is deemed completed at this moment and the same goes for the realtor’s duties.
This said, however, the real estate agent is going to be present at the moment when the final agreement is signed, the payment for the property is made, and the Acceptance Certificate is signed (see below).
Step 3. Final purchase agreement
Below please find the list of documents that the buyer needs to supply when purchasing real estate in Serbia:
- Passport;
- Marital status certificate;
- Bank account number in Serbia that is going to be used for transferring the money to the seller;
- Documents confirming the legality of the funds.
Here we would like to emphasize a very important fact. You have to have a bank account in Serbia to be able to purchase real property in the country. You cannot make a transfer from a bank located outside Serbia: it’s forbidden by law.
The procedure of signing the purchase agreement
- The agreement is drawn up by a lawyer. The lawyer’s fee may or may not be included in your service agreement with the realtor.
- The agreement needs to be notarized in the presence of the buyer, the seller, the realtor, a sworn translator, and two witnesses. Preferably, the witnesses should have some English.
- The agreement is written in Serbian. The notary read it aloud and the translator translates his/ her words into English.
- You can ask the translator to make a notarized written copy of the agreement in English for you.
The agreement contains the following information:
- Names of the parties and their personal data. If the buyer is a natural person, the data include their passport number. If the buyer is a legal entity, corporate documents are required as well as the company’s registration number, fiscal number, and legal address. The person authorized to make the deal on behalf of the company needs to supply their personal data too.
- Property information (apartment, house, land plot, garage, etc.) with a detailed description of the Информацию об объекте (квартира, дом, земля, гараж…) с точным описанием real estate in Serbia (location, type, area, address, etc.). If there are any encumbrances, they have to be specified.
An extract from the cadaster is attached to the contract. Its validity period is 30 days.
- Price of the property and the payment scheme.
- Obligations of the seller and the buyer.
The seller undertakes to pay all the outstanding taxes and utility bills and supply confirmation documents.
The buyer undertakes to take on all the tax and other obligations with relation to the property within a set period.
- An article mentioning protection from eviction is mandatory (so that no third parties can claim property rights).
- Signatures of the parties, the translator, and the witnesses.
After the buyer makes the bank transfer, the whole company goes back to the notary public who prepares a Clausula intabulandi – an official agreement of the seller to transfer the property rights to the buyer.
Step 4. Payment
Up to €10,000 can be paid in cash and any larger sum only by a bank transfer. Foreign buyers normally open accounts with the sellers’ banks to avoid or lessen the commissions.
Most often, the buyer pays 100% of the sum when the final purchase agreement is made. In some cases, the payment can be made in several installments.
Step 5. Property inspection
When purchasing property in Serbia, you have to sign a Certificate of Acceptance thus confirming your satisfaction with the state of the house or the apartment that you are buying.
If you are buying an apartment in a newly erected building (where nobody has lived before), you will be given copies of the construction permit and occupancy authorization that will serve as an official confirmation of the good state of the property.
Step 6. Property right registration
You can obtain a certificate confirming your ownership of the property in Serbia from the cadaster in 30 days after the deal is finalized. The state duty is 1,250 dinars (around €10).