Real Estate Due Diligence in Serbia in 2025

Buying real estate in Serbia in 2025 continues to be an attractive option for both domestic and foreign investors. With increasing demand in major urban areas like Belgrade and Novi Sad, the Serbian property market offers promising opportunities, but it also requires careful legal navigation. One of the most important aspects of any real estate transaction in Serbia is due diligence.

Due diligence refers to the process of verifying the legal, factual, and administrative status of a property before finalizing a purchase. It is a safeguard that ensures not only that the property is legally transferable, but also that the buyer understands the structure of ownership, any encumbrances or risks, and the specific legal environment in which the property exists.

In Serbia, real estate due diligence is typically conducted by attorneys who specialize in real estate, contract, and corporate law. Their role is central to ensuring a smooth and legally secure transaction, especially when the property is owned by a legal entity or part of a larger development project.

What Does Due Diligence Involve?

At its core, real estate due diligence in Serbia aims to confirm that the property has a clear title, is properly registered in the Real Estate Cadastre, and is not entangled in legal disputes or encumbered by mortgages, liens, or unresolved ownership issues. It also includes reviewing construction and usage permits, confirming compliance with zoning laws, and verifying the legal capacity of the seller-whether it be a natural or a legal entity.

The process is particularly important for foreign buyers, who may not be familiar with the Serbian legal system or public registries. A well-executed due diligence review can prevent future legal complications, and in some cases, can even uncover hidden liabilities or irregularities that might otherwise go unnoticed.

Legal Documentation: What Is Reviewed?

The specific documents and data reviewed during due diligence depend on whether the seller is a natural or a legal entity (including both a company and an entrepreneur). In transactions involving companies, the process is more complex and requires deeper verification of corporate documents, shareholder structure, and internal decision-making authority.

For natural-person sellers, key personal identification and ownership documents must be reviewed. These typically include identification documents, proof of legal ownership, and extract of registration in the Real Estate Cadastre. It is also essential to determine whether the seller’s property qualifies as separate (personal) property or as marital property acquired during the marriage. Clarifying this distinction at the outset helps prevent potential legal disputes, ensures that all necessary consents are obtained, and provides certainty that the transaction is being carried out with the proper rights and authority. In practice, this step often reveals issues that would otherwise surface only later in the process-sometimes too late-so it forms a critical part of thorough due diligence.

When a legal entity is selling the property, additional corporate documentation becomes relevant. The attorney should review the act of incorporation, share transfer agreements, and records of any encumbrances or limitations on shares. The managing director’s authority must be carefully verified, including any limitations on their power to represent the company, particularly those imposed by other individuals or corporate bodies within the organization. These details are essential to confirm that the company can legally sell the property without future legal challenges.

Corporate Structure and Real Estate Ownership

If the seller is a company, the due diligence process must extend into corporate law. The legal team must confirm that the company is in good standing with the Serbian Business Registers Agency and that it legally owns the property being sold.

It is equally important to ensure that the Managing director or legal representative has the authority to sign the sales and purchase agreement and that all necessary internal decisions, such as shareholder or board approvals – have been made in accordance with the company’s founding documents.

In some cases, shares in a company may be pledged or involved in legal disputes, which can indirectly affect the transaction. The process includes verifying whether the company’s shares are pledged or involved in legal disputes, as this may indirectly affect the transaction. It also involves reviewing the company’s legal and financial status, including any ongoing litigation, insolvency proceedings, or tax obligations that could impact the sale or future ownership of the property.

Role of Powers of Attorney in the Process

In most real estate transactions involving international or remote buyers, legal representation through Powers of Attorney (POAs) is a practical necessity. This allows attorneys in Serbia to carry out all due diligence steps, communicate with public institutions, and eventually complete the transaction on the buyer’s behalf.

The POA and other relevant documents issued by a foreign country have to be properly drafted and executed to ensure legal validity in Serbian authorities, for example notary public, and other state institutions. Usually, the attorney prepares the POAs in line with Serbian legal standards and sends them to the parties for signature, simplifying the process for foreign clients.

At this initial stage, it is crucial that the power of attorney is properly legalized and translated into Serbian in order to be legally valid and effective within the Serbian legal system.

Agreement Drafting and Verification of Technical Documentation

After the legal and ownership checks are completed, the due diligence process moves into the contract-drafting phase. At this stage, the attorney prepares the sales and purchase agreement based on all previously collected information, including a review of the project-technical documentation, building and occupancy permits, and other records confirming that the property was legally constructed and properly registered in the Real Estate Cadastre. The agreement must clearly define the subject of the sale, the price, payment terms, deadlines, seller’s warranties, and all other key provisions that protect the interests of both the buyer and the seller.

The Notary Public’s Role in Securing the Transaction

The agreement must be notarized before a public notary, who plays a central role in ensuring the safety and legality of real estate transactions. The notary verifies the identity and authority of the parties, reviews all powers of attorney and supporting documents, explains the contractual provisions, and ensures that the transaction complies with Serbian law, thereby protecting both sides.

If foreign nationals are physically present during the signing, the presence of a certified court interpreter for their language is mandatory to guarantee full understanding of the contract. This stage also includes the assessment of tax obligations – most commonly the transfer tax on absolute rights (for “old” properties) or VAT (when purchasing from an investor), as well as property tax obligations that transfer to the buyer upon ownership. The notary then prepares and signs the notarized solemnization, giving the agreement full legal effect.

Payment of the Purchase Price and Registration with the Cadastre

Once the agreement has been notarized, the purchase price must be paid, followed by the submission of documentation to the Cadastre. Foreign citizens – sellers are required to open non-resident bank accounts in Serbia to comply with domestic banking and foreign-exchange regulations. The agreement specifies the payment timeline, method of payment, and the procedure for delivering proof of transfer.

After payment, the notary submits the contract and supporting documents electronically to the Republic Geodetic Authority (the Cadastre), initiating the registration of the new owner. Thanks to the digitalized system, this process is significantly faster and more transparent, and neither party is required to visit the Cadastre in person-communication takes place entirely through the notary.

This usually represents the final phase of due diligence for the purchase of completed (“old”) properties, while new-build purchases may involve additional steps, typically structured in three stages:

1. a reservation agreement,
2. a preliminary agreement,
3. and the final sale and purchase agreement.

New Construction vs. Old Construction: Key Legal and Practical Differences

The due diligence process can vary significantly depending on whether the property in question is a new construction or an older building. Understanding these differences is essential for assessing the risks, costs, and documentation requirements associated with each type of property.

Ownership of new construction properties often involves first-time registration in the Real Estate Cadastre. In many cases, the owner is an investor rather than a natural person, which adds layers of corporate and legal considerations. On the other hand, older properties tend to have more straightforward ownership, usually registered under an individual’s name, which simplifies the verification process.

Regarding cadastre status, new builds may not yet be fully registered and are sometimes listed as “under construction.” This status requires careful attention during due diligence, since the registration process may still be incomplete. In contrast, old constructions are usually fully registered, with all ownership and boundaries clearly defined.

Construction permits represent another crucial difference. New constructions require a thorough review of all necessary permits – including location permits, building permits, and usage permits – as these documents confirm the legality of the building process. For older properties, these permits are typically archived, making them easier to verify but sometimes harder to physically obtain, especially for buildings constructed many years ago.

The occupancy permit, which certifies that a building is approved for use, is a critical document in new construction transactions and must be issued before final concluding the agreement. With older properties, this permit is usually already in place and well-established.

Infrastructure and utility connections also differ: new objects may not be fully connected to utilities or have individually metered services, while older buildings are typically fully serviced with established infrastructure.

From a financial perspective, new constructions are subject to Value Added Tax (VAT) of 10%, which impacts the overall purchase price. This tax is usually not applicable to older properties, making them potentially more affordable per square meter. Correspondingly, the price per square meter for new builds tends to be higher, reflecting modern standards and demand.

Finally, legal risk varies: new constructions carry higher risk, especially if the construction is incomplete or poorly documented. In contrast, the risk is generally lower with older properties, assuming that all legal documentation is complete and well maintained.

The following table summarizes these key differences: