Even though you might have thought that after concluding and notarizing the agreement, the procedure is completed, you must pay attention to some other activities that accompany the real estate sale and purchase procedure.
When buying property in Serbia, you will be charged with absolute rights transfer tax. During the notarization-solemnization of the real estate sale and purchase agreement, the tax return for the tax on the transfer of absolute rights is being filled. The Notary Public is obliged to deliver the abovementioned filled tax return within 24 hours from the moment of notarization of the agreement to the competent tax authorities.
Following the Property Tax Law, the taxpayer is the seller, the one who is transferring his ownership right to the buyer. However, in practice, the more common situation is that the contracting parties agree for the buyer to pay the tax, and therefore, the agreements state that the buyer will pay the tax on the transfer of absolute rights.
The tax base, for determining the tax on the transfer of the absolute rights is the stipulated purchase price of the real estate, if the stipulated price is not lower than the market value of the real estate. On the other hand, if the competent tax authority believes that the stipulated purchase price is lower than the market value of the real estate, the competent tax authority has a timeline of 60 days from the day of submission of the tax return, to assess and determine that the tax base will be the market value of the real estate. The tax rate is 2.5% of the stipulated purchase price, i.e., the market value of the real estate that is the subject of the agreement.
In addition to the tax on the transfer of the absolute rights, which is paid only once, during the purchase of each property, you should also bear in mind the property tax. As well as the submission of the tax return for the tax on the transfer of the absolute rights, this tax return for the property tax is submitted by the Notary Public.
Property tax is determined on the basis of the annual Decision and is being paid quarterly. The tax base for determining the property tax is the value of the real estate, estimated by the competent tax authority. The tax rate is 0.4% for real estate valued up to 10 million dinars, while it goes up for the more valuable real estate.
Additionally, there is one more possibility, in accordance with the age of digitalization, and that is the electronic submission of the tax return for the tax on the transfer of the absolute rights, and tax on the gift and inheritance (in case you gain ownership over a gift, or inherit something), via portal eTaxes. Firstly, you must download a free app, that will allow you to access the portal. In order to access and log into the portal, and submit the tax returns by yourself, you must have an electronic signature.
In order to complete the entire procedure of buying a property in Serbia as a foreigner, it is also necessary to make changes of the account holder with the competent companies (eg., for electricity, water supply, etc.)