 The good news is that a foreign national does not
need to ask for permission to purchase a property in Bosnia and
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 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books are frequently out of date and many real estate books were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.
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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