Should I buy in Croatia or Montenegro?

Authored by the expert who managed and guided the team behind the Croatia Property Pack

Everything you need to know before buying real estate is included in our Croatia Property Pack

Who is the author of this content?

INVESTROPA

A team specialized in real estate investing in European countries

We are a team of financial experts, legal professionals, developers, and local real estate specialists dedicated to helping people like you avoid mistakes when investing in real estate in a foreign place, particularly in Croatia. If you'd like to learn more about us, you can check our presentation page.

How this content was created 🔎📝

At INVESTROPA, we explore the Croatian real estate market every day. Our team doesn't just analyze data from a distance—we're actively engaging with local realtors, investors, and property managers in cities like Zagreb, Split, and Dubrovnik. This hands-on approach allows us to gain a deep understanding of the market from the inside out.

These observations are originally based on what we've learned through these conversations and our observations. But it was not enough. To back them up, we also needed to rely on trusted resources

We prioritize accuracy and authority. Trends lacking solid data or expert validation were excluded.

Trustworthiness is central to our work. Every source and citation is clearly listed, ensuring transparency. A writing AI-powered tool was used solely to refine readability and engagement.

To make the information accessible, our team designed custom infographics that clarify key points. We hope you will like them! All illustrations and media were created in-house and added manually.

Fact-checked and reviewed by our local expert

✓✓✓

Nikki Grey 🇬🇧

CEO & Director, Europe Properties

Nikki Grey, an expert in European real estate markets, has deep knowledge of Croatia's growing investment potential. As the CEO of Europe Properties, she connects investors with prime opportunities in Croatia's dynamic property sector. From historic coastal towns to modern developments, her expertise ensures seamless transactions for buyers seeking homes or investments in this stunning Mediterranean destination.

What are the current property prices per square meter in Croatia versus Montenegro?

As of September 2025, Croatia commands significantly higher property prices than Montenegro across most market segments.

Croatia's nationwide average reaches €2,050 per square meter, with coastal and prime tourist destinations like Split, Dubrovnik, Hvar, and Opatija commanding €2,700+ per square meter. Zagreb apartments now average €2,987 per square meter, reflecting the capital's strong demand. Rural and inland areas offer more affordable options ranging from €300-€1,200 per square meter in less popular locations.

Montenegro presents a more varied pricing landscape with Podgorica and inland cities averaging €1,581 per square meter. Coastal markets show dramatic price variations: Budva apartments average €3,509 per square meter, premium Tivat locations reach €5,813 per square meter, while Kotor averages €3,131 per square meter. Many non-prime coastal areas and rural regions remain under €2,000 per square meter.

The price differential reflects Croatia's EU membership status, more developed tourism infrastructure, and established international buyer interest. Montenegro's coastal premium locations can exceed Croatia's prices, but the country offers more budget-friendly options overall.

How do rental yields compare between Croatia and Montenegro for both short-term and long-term rentals?

Montenegro delivers superior rental yields compared to Croatia across both short-term and long-term rental categories as of September 2025.

For long-term rentals, Croatia generates gross yields averaging 4.9% nationwide in Zagreb, with slightly higher returns available in coastal markets. Montenegro significantly outperforms with Podgorica achieving 6.4% average returns, Budva delivering 5.8%, and Tivat producing 4.6%. Net yields typically run 1.5-2% lower after expenses and taxes.

Short-term rental performance shows Montenegro's competitive advantage more clearly. Croatian coastal tourist hotspots achieve gross yields of 5-7%, but face increasingly strict regulations, volatile seasonal demand, and higher taxation that dampens overall returns. Montenegro's Airbnb market in Kotor generates median monthly revenues of $1,200, with peak properties reaching $2,943 during summer months.

Montenegro's typical short-term rental properties maintain 39% annual occupancy with €93 average daily rates, though this varies dramatically by season - peak August properties achieve 67.9% occupancy with €158 daily rates, while January drops below 20% occupancy. The lighter regulatory environment in Montenegro provides higher ROI potential but also increases risk exposure.

It's something we develop in our Croatia property pack.

What are the foreign property purchase procedures in Croatia compared to Montenegro?

Montenegro offers significantly more straightforward foreign property purchase procedures compared to Croatia's bureaucratic requirements.

Process Step	Croatia	Montenegro
Eligibility	EU/EEA nationals buy freely; non-EU need reciprocity agreement + Ministry approval	Any foreigner can buy apartments/homes/urban land
Timeline	2-6 months (non-EU approval process)	2-4 weeks completion possible
Documentation Required	Croatian tax number (OIB), Ministry of Justice approval (non-EU)	Standard purchase contract, notarization
Legal Representation	Mandatory for due diligence	Recommended but not mandatory
Remote Purchase	Difficult due to approval requirements	Possible with power of attorney
Deposit Structure	10% preliminary contract deposit	10% preliminary contract deposit
Land Restrictions	Various restrictions for non-EU buyers	No agricultural land over 5,000 m²

Croatia requires EU nationals to obtain a Croatian tax number (OIB) and complete due diligence before signing preliminary contracts with 10% deposits. Non-EU buyers face additional Ministry of Justice approval processes that can extend timelines significantly. The final sales contract requires notarization and Land Registry registration.

Montenegro streamlines the entire process with any foreigner eligible to purchase residential properties. The procedure involves property search, legal due diligence, preliminary contract with 10% deposit, final notarized contract, payment completion, and Land Registry registration. Remote purchases are feasible through power of attorney arrangements.

What are the tax obligations and ongoing costs for property owners in Croatia versus Montenegro?

Both countries impose similar transfer taxes and ongoing costs, though Croatia's recent tax reforms have increased annual property tax obligations.

Transfer taxes are comparable with Croatia charging 3% of property value and Montenegro implementing a progressive system: 3% for values up to €150,000, rising for higher-value properties. Notary and legal fees range €700-€2,000 in Croatia depending on complexity, while Montenegro charges 0.5-1% of purchase price plus notary and interpreter costs.

Croatia's new 2025 property tax law significantly impacts ongoing costs. Annual property tax ranges 0.6-8 euros per square meter (municipally set) plus 0.2-0.5% of property value depending on usage. Primary residences and properties rented for more than 10 months annually receive exemptions. Montenegro maintains lower annual property taxes at 0.1-1% of market value, with municipalities setting specific rates.

Rental income taxation differs substantially between the countries. Croatia taxes short-term rental income at 10% (higher for tourist accommodations) and long-term rentals at 8%. Montenegro applies 15% tax on net rental income for both short-term and long-term rentals, allowing expense deductions.

Maintenance costs remain similar with apartment buildings charging €1-2 per square meter for common area fees and average utilities running €100 monthly in Croatia versus €95 monthly for 85 square meter units in Montenegro.

How stable are the legal systems for property ownership in Croatia versus Montenegro?

Both Croatia and Montenegro maintain stable legal frameworks for property ownership with strong protections for foreign investors.

Croatia benefits from EU harmonization, providing robust legal remedies and clear court structures for property disputes. The rule of law receives stable ratings, though bureaucratic processes can slow approvals and land registration. Occasional disputes arise related to title issues, inheritance complications, and zoning conflicts, but the established legal framework provides clear resolution pathways.

Montenegro operates a transparent title registry system with straightforward ownership structures that rarely generate disputes. When conflicts occur, they typically involve unclear rural land titles or inheritance issues. Foreign investors enjoy equal legal rights with domestic buyers, and courts consistently uphold overseas investor claims.

Both legal systems provide adequate protection for property investors, with Croatia offering more developed legal infrastructure through EU membership and Montenegro providing simpler, more accessible procedures for foreign buyers. Neither country shows significant dispute frequency that would concern international property investors.

What residency and visa benefits come with property ownership in Croatia versus Montenegro?

Montenegro provides direct residency benefits for property owners while Croatia requires separate residency applications regardless of property ownership.

Croatia's property ownership does not grant automatic residency rights. Foreign buyers must apply separately for long-stay or temporary residence permits based on property ownership, requiring proof of financial means and accommodation. The approval process involves demonstrating sufficient income and ties to Croatia. No citizenship by investment pathway exists through property ownership alone.

Montenegro offers property owners immediate eligibility for one-year renewable residence permits. This represents a significant advantage for buyers seeking European residency options. Additionally, Montenegro maintains citizenship by investment programs requiring minimum investments of €250,000 in northern/central regions or €450,000 in coastal areas through pre-approved development projects.

For buyers prioritizing residency benefits alongside property investment, Montenegro provides a clearer, more accessible pathway to European residency and potential citizenship compared to Croatia's separate application requirements.

How reliable are infrastructure and utilities in coastal and inland areas of both countries?

Croatia maintains superior infrastructure development compared to Montenegro, particularly in coastal tourist areas and major cities.

Croatia's coastal regions and cities feature excellent infrastructure including modern road networks, strong internet connectivity with fiber optic availability in most coastal towns, and reliable utility services. Some islands may experience water or power interruptions during peak summer seasons, but overall service quality remains high. Inland and rural regions operate with older infrastructure but generally maintain good service standards.

Montenegro has developed solid infrastructure along the main coastal highway and in primary tourist zones, with reliable internet and utility services in main towns. Ongoing investments continue improving service quality, though some inland and rural areas lag behind in infrastructure quality and resilience. Major cities like Podgorica, Budva, Kotor, and Tivat receive excellent service, while remote areas may face occasional service disruptions.

For property investors, Croatia's more mature infrastructure provides greater reliability and service consistency, while Montenegro's ongoing development represents improving but still developing infrastructure in secondary markets.

What are the tourism trends and visitor numbers comparing Croatia to Montenegro?

Croatia significantly outpaces Montenegro in total tourism volume while both countries show strong post-pandemic recovery and growth trajectories.

Croatia welcomes over 20 million annual visitors, achieving record growth post-pandemic with 2024-2025 numbers exceeding 2019 peaks despite slight recent slowing. Tourism concentrates heavily in summer months with Dubrovnik, Split, and Istria generating the highest visitor numbers. The country increasingly develops year-round tourism in larger cities and promotes inland tourism to reduce seasonal concentration.

Montenegro attracts 2.5-3 million annual visitors with record numbers in coastal destinations including Budva, Kotor, and Tivat. The tourism remains highly seasonal, though visitor growth has outpaced infrastructure development in some coastal hotspots. Strong momentum continues particularly from regional tourists and Russian-speaking markets, providing steady demand for short-term rental properties.

Croatia's established tourism infrastructure and larger visitor base provide more stable demand for rental properties, while Montenegro's smaller but growing market offers potential for higher yields in emerging destinations.

It's something we develop in our Croatia property pack.

We did some research and made this infographic to help you quickly compare rental yields of the major cities in Croatia versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.

How easy is property resale in Croatia compared to Montenegro and what are typical timelines?

Both countries offer reasonable resale liquidity for well-located properties, with Montenegro showing slight advantages in coastal markets.

Croatia's resale market performs well in Zagreb and coastal properties, with well-priced properties typically reselling within 3-8 months. Prime locations in Split, Dubrovnik, and Istrian coastal towns maintain strong buyer interest from both domestic and international purchasers. Rural and non-prime areas experience much slower resale timelines, potentially extending to 12+ months.

Montenegro's coastal markets in Budva, Tivat, and Kotor average 3-6 months resale time for appropriately priced properties. Foreign buyer interest, particularly from Russian and Serbian capital along with increasing Western European demand, maintains strong market liquidity. Inland and smaller market resales prove less liquid but still manageable for patient sellers.

Both markets benefit from continued international buyer interest, though Croatia's larger tourism market and EU membership provide slightly more stable long-term demand patterns compared to Montenegro's more volatile but potentially higher-growth market dynamics.

What financing options exist for foreign buyers in Croatia versus Montenegro?

Croatia offers more developed mortgage options for foreign buyers, particularly EU nationals, while Montenegro presents limited but available financing alternatives.

Croatia provides mortgage access primarily to EU/EFTA citizens and select third-country nationals through local and international banks. Foreign buyers typically require 20-40% down payments with interest rates ranging 4-7% - higher than rates offered to Croatian residents. Local mortgage brokers and international banking relationships can provide better terms and smoother approval processes.

Montenegro's mortgage market for foreigners remains limited but accessible through select local banks. Interest rates typically range 5-7% with slower approval processes compared to domestic buyers. Many foreign purchasers opt for cash transactions due to financing limitations and bureaucratic complexity. Pre-approval from larger regional banks or international lenders provides the best financing options.

For buyers requiring financing, Croatia's more developed mortgage market and EU banking integration provide superior options, while Montenegro buyers should prepare for cash purchases or secure international financing before property searches.

How do coastal lifestyle factors compare between Croatia and Montenegro?

Croatia offers more developed expat infrastructure and healthcare systems while Montenegro provides lower living costs and a more relaxed lifestyle atmosphere.

1. **Healthcare Systems**: Croatia maintains a strong public and private healthcare system with excellent facilities in major cities and adequate coverage in coastal towns. Montenegro provides decent healthcare in urban centers like Podgorica, Budva, and Tivat, but rural areas receive less comprehensive medical services. 2. **Educational Options**: Croatia offers international schools in Split, Dubrovnik, and Zagreb with fewer options in smaller coastal towns. Montenegro provides some private schools in Podgorica and the Tivat/Budva area but limited international educational choices overall. 3. **Expat Communities**: Croatia hosts large, established expat communities throughout Istria and Dalmatia with strong support networks and cultural activities. Montenegro features tightly knit expat groups with strong Russian, British, and Serbian presence, plus increasing Western European arrivals. 4. **Cultural Activities**: Croatia provides cosmopolitan lifestyle options with year-round cultural events, sports activities, and entertainment across major coastal cities. Montenegro offers a more laid-back lifestyle with smaller city atmosphere and seasonal cultural programming. 5. **Cost of Living**: Montenegro delivers significantly lower overall living costs including dining, utilities, and everyday expenses. Croatia's costs align more closely with EU standards, particularly in tourist areas during peak seasons.

It's something we develop in our Croatia property pack.

What future development and investment plans exist in Croatia versus Montenegro?

Both countries pursue significant infrastructure and tourism development projects, with Croatia focusing on EU-funded improvements and Montenegro targeting luxury tourism expansion.

Croatia implements large-scale EU-funded infrastructure projects including road networks, bridge construction (notably the completed Pelješac Bridge), port expansions, and airport upgrades. New developments emphasize sustainable tourism, luxury apartment construction, and expanding winter/inland appeal to reduce seasonal tourism concentration. These investments strengthen long-term property value stability and rental market growth.

Montenegro pursues ongoing luxury tourism investments including major projects like Porto Montenegro marina development, Lustica Bay resort expansion, and significant transport infrastructure improvements. New legislation continues supporting foreign investment in coastal and tourism zones, with airport and marina expansions planned to accommodate growing visitor numbers.

Croatia's EU membership provides access to larger development funding and more stable long-term planning, while Montenegro's emerging market status offers potential for higher growth rates through strategic tourism and infrastructure investments targeting premium international markets.

Conclusion

This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.

Sources

1. E1 Holding Croatia Real Estate Market Analysis
2. Investropa Croatia Real Estate Market
3. Global Property Guide Croatia Prices
4. Properstar Croatia House Prices
5. Investropa Montenegro Real Estate Market
6. Global Property Guide Montenegro Prices
7. Euronews European Property Investment
8. Global Property Guide Montenegro Rental Yields
9. AirROI Montenegro Kotor Report
10. Overseas Dream Home Montenegro Guide