Investment in Serbia

While real estate prices in Israel in particular and in Europe in general are sky rocketing, the Serbian real estate market offers a variety of opportunities for accessible and attractive investments such as private houses, apartments, lots approved for immediate construction and commercial real estate. The combination of a stable return and the increase of real estate prices, with the expectation to enter into the European Union, place Serbia as the next real estate jewel of Europe.

Serbia’s accelerated development in all walks of life, together with the political stability and the EU’s declarations of their intent to add Serbia to its ranks – provide the country with the status of an attractive destination for real estate investment opportunities, whether for private investors or real estate companies who have identified the overwhelming potential inherent in the country.

An Article in 'Globes' Magazine

"The Israelis are the biggest investors in Serbia…"

The total scope of the Israeli investments in Serbia reached a Billion Euro over the years, and focuses mainly on the real estate industry which turned Serbia into one of the most attractive investments in the European real estate market. We see a trend of Israeli real estate companies that take part in the establishment of commercial centers, shopping malls and residential areas even outside of Belgrade. A figure that constitutes a positive sign of a more balanced development throughout the entire country.

Establishing factories in Serbia creates new jobs which attract a large quantity of high quality manpower, which in turn increases the demand for residential real estate. As a result of the change, there has been an increase in foreign investments in Serbia in recent years, by those factors which recognize the potential in this growing market.

Among the foreign investors who have elected to settle in Serbia, with an emphasis on the north of the country next to the border with Hungary, are some of the world’s leading companies, among which are: Siemens, Swarovski, Continental, Norma Group and more…

The Serbian real estate market

Since the 1980’s and until early 2000’s, the Republic of Serbia experienced difficult decades characterized by political, economic and security instability.

This period is defined as the ‘Serbian Ice Age’, a time when no investments were made, unemployment soared and the whole country entered an economic crisis.

Following Serbia’s declaration of independence in 2005, the government carried out several reforms aimed at jump starting the economy, among other things, through the trade agreement with the European Union, lifting the restrictions on foreign investments, encouragement by providing tax benefits to foreign investors, developing infrastructures for establishing factories and more.

As a result of the reforms, the Serbian real estate market experienced an impressive awakening in all walks of life.

In the last 5 years, real estate prices increased steadily and regularly by about 7% annually, and by about 60% in the past ten years. Along with it, the yielding return for the rental of properties has been rising and currently ranges around the 8%.

As a result of the positive growth data of the country, in recent years the unemployment rate in the country has decreased to an all time low, and currently stands at about 10%. With it the average wages in the country spiking in about 40%, and is currently at 700 Euro.

A chart of the increase in average wages in the market 2017-2021

Real Estate Taxation

Purchase Tax - 2.5%

Purchase tax is imposed on the acquisitions of rights in real estate. The rate of tax is set by the municipal tax authorities and cannot exceed 2.5% of the purchase price.

Land Betterment Tax - 15%

The sale of real estate is subject to the payment of Land Betterment Tax in the rate of 15% on the profit. The tax base is reduced after the deduction of the owner’s investment in the property

Income Tax on Rental – 20%

The income from real estate rentals is subject to the payment of tax at the rate of 20%. The tax based is reduced by up to 25% for maintenance expenses. 

A chart of real estate price increases in the past 5 years

The combination between the two as a result of the accelerated development in the country, together with the positive immigration, creates a significant increase in demands in the real estate market.

The interest of the Israeli investor in Serbia is directly related to the improvement of the economic environment and political stability.

Serbia is a highly developed and advanced country, and the combination of the EU’s support with a very westernized European country creates a fertile ground for a profitable investment. In recent years, the country has maintained high growth rates in the field of real estate.

Average wages in the market: <700 Euro

Economic growth: <3.8%

Low unemployment rates >11.2%

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