Advice on buying Bosnia Herzegovina Property

You have found a property you wish to purchase in Bosnia and Herzegovina what next?

Bosnia Herzegovina Buyer's Guide explains the legal fees, legal procedures, purchase taxes and mortgage procedure.

Below are some brief points in purchasing property in Bosnia Herzegovina.

The good news is that a foreign national does not need to ask for permission to purchase a property in Bosnia Herzegovina.

The emerging property market in Bosnia Herzegovina is similar to other developing countries with high end construction, and investment opportunities.

Your estate agent operates in a reasonably transparent and competitive market, given the newness of the market; most agents only operate in the major town, handling mostly residential sales along with apartment rentals.

Property valuation is not regulated in Bosnia Herzegovina, there is no national body offering this service, so you're Agent's local knowledge of properties and prices will prove invaluable.
At this moment we are unaware of any mortgage lenders in Bosnia and Herzegovina that will offer foreign nationals finance to assist with real estate purchase.

It is easier to complete a real estate purchase if you use the company route ,this will cost you around €1000 in fees and an initial start up capital of €2000.

Owning a company then has a regular obligation of maintaining your accounts to present to the tax authorities making life that little bit easier.

Purchase
In every case engage a trustworthy lawyer for your Bosnia Herzegovina property purchase, you will pay between 3-5% in costs including the Company incorporation costs.

Having found the property that you want to purchase, you will enter into a preliminary sales contract with the seller which has to be signed by a representative of the purchaser (a resident of Bosnia and Herzegovina i.e. your agent) on your behalf.

The contract will contain details of both purchaser and seller stating that both parties are committed to the property sale / purchase, along with the price, and expected timescale for completion at this time you are expected to pay a deposit of 3-5% of the agreed selling price to the seller.

To be valid properties must have been registered in the real estate books within the local courts.

Properties are also recorded in the local Cadaster (property map) which provides a unified property and cadastral system.

This real estate law has only just been implemented, as real estate books are frequently out of date and many real estate books were destroyed during the civil war.

This is where your agent comes into his own as it is his job to ensure that your real estate purchase has a clean title deed.

Registration procedures allow for a "subscription" which is a temporary registration of real estate rights, pending authentication.

Once this has been done, you are then obliged to pay the seller of the property the balance of the money owed.

(Because of court backlogs it can take up to a year to get the real estate registered and get title deed) You will have to pay 6% real estate Tax to the local authority. This is in fact 5% properties tax and a 1% additional properties tax, for the authorities to actually value your property just to make sure you are not under declaring the properties value to reduce the 5% property tax payable!

At this moment there is no Capital Gains Tax in Bosnia and Herzegovina for foreign nationals buying and selling properties.

As a foreign national you can rent out your real estate in Bosnia and Herzegovina without any requirement to obtain a rental licence from the authorities.

Sometime in the future Bosnia and Herzegovina will become members of the European Community and when it does the prices of properties will be considerably more than they are at the moment.

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These guidelines are meant for guidance only and describe a straightforward purchase scenario. However this information is not meant to replace proper legal advice, which we always insist you take.

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