Montenegro Inheritance & Gift Tax Guide 2026

Overview — Inheritance & Gift Taxation

Montenegro taxes the transfer of assets by inheritance and gift through the Law on Inheritance and Gift Tax (Zakon o porezu na nasledstvo i poklon). The tax is payable by the heir or donee (recipient). The tax is assessed on the market value of the assets received. Both real estate and movable property (vehicles, shares, cash,艺术品) are subject to the tax if located in Montenegro. The tax rates depend on the relationship between the deceased/donor and the heir/donee. There are significant exemptions for close family members (spouse, children, parents) up to certain thresholds.

Inheritance Tax Rates — 3% to 5%

Inheritance tax rates in Montenegro depend on the hereditary order (relationship):

• 3% — spouse (husband/wife) and children (first hereditary order)
• 4% — parents, siblings, grandparents, and grandchildren (second hereditary order)
• 5% — all other heirs (third hereditary order and non-relatives)

The tax is calculated on the market value of the inherited assets minus any debts and funeral expenses. For spouse and children, there is a significant exemption: inheritance up to a certain threshold (approximately EUR 10,000-15,000, adjusted periodically) may be exempt from tax. The tax is payable within 60 days of the inheritance being accepted or the probate decision becoming final. Assets inherited by the state, municipalities, charitable organisations, and religious communities are generally exempt.

Gift Tax — Progressive Rates

Gift tax is payable by the recipient (donee) on the market value of gifts received. The rates are:

• Spouse and children — lower rates apply with exemption threshold
• Other relatives — moderate rates
• Non-relatives — higher rates up to 5%

Gifts to charitable organisations, the state, and municipalities are exempt. Small gifts of customary value (birthday, wedding) are generally not subject to tax. The donor and donee may be jointly liable for the tax. The gift must be declared to the Tax Administration within 30 days of receipt for real estate, or by the annual return deadline for other property. For real estate gifts, the transfer tax (3%) also applies unless an exemption is available.

Succession Law — Wills and Intestacy

Montenegrin succession law is governed by the Law on Inheritance. Key principles:

• Freedom of testation — individuals may dispose of their property by will, subject to forced heirship rules (nužni dio)
• Forced heirship — certain heirs (spouse, children, parents) are entitled to a minimum share of the estate (typically 50% of their intestate share)
• Intestate succession — if no valid will exists, the estate passes according to law: first order (spouse and children), second order (parents and siblings), third order (grandparents)
• Wills — must be in writing and signed by the testator in the presence of two witnesses or certified by a notary. Holographic wills (handwritten) are valid in certain circumstances.

Probate is obtained through the competent court (vanparnični postupak). The process involves inventorying the estate, paying debts, and distributing assets to heirs. Foreign nationals with assets in Montenegro should have a separate Montenegrin will covering their Montenegrin assets.

Tax Planning Considerations

Effective estate planning in Montenegro should consider:

• The exemption thresholds for spouse and children can significantly reduce or eliminate inheritance tax for smaller estates
• Gifts during lifetime may be more tax-efficient for certain asset transfers, especially if the gift exemption applies
• Real estate is subject to both inheritance/gift tax and potential future capital gains tax when the heir sells
• Foreign entities holding Montenegrin property should consider the inheritance tax implications for individual beneficiaries
• Double tax treaties do not typically cover inheritance taxes, so cross-border estates may face taxation in multiple jurisdictions

FAQs

Do I need to pay tax on inherited property if I sell it later?

Yes, if you sell inherited property, capital gains tax at 15% applies on the gain (selling price minus the market value at the time of inheritance). The inheritance tax paid can be added to the cost base when calculating the gain.

Is there a way to avoid inheritance tax when passing assets to family?

Gifts during the donor's lifetime using annual exemptions can reduce the taxable estate. Trust structures are not commonly used in Montenegro but may be available. Professional estate planning advice is recommended.

Does Montenegro recognise foreign wills?

Foreign wills may be recognised in Montenegro but must go through the probate process in Montenegro to be effective for Montenegrin assets. It is generally advisable to execute a separate Montenegrin will for assets located in Montenegro.

Disclaimer

This guide provides general information about Montenegrin inheritance and gift tax for the 2026 tax year. Succession law is complex. Always consult with a qualified Montenegrin lawyer or tax advisor for advice specific to your situation. InvestmentKit does not provide tax or legal advice.