In 2026, buying seaside property has finally shifted from an emotional purchase of a “summer cottage” to a strict mathematical calculation. Against the backdrop of inflated price bubbles in Croatia and Spain, where net yields have fallen to a modest 3% per year, Montenegro remains one of the few regions in Europe capable of generating stable 6–8% per year in euros (ROI).
However, the shadow market for short-term rentals is becoming a thing of the past. In May 2026, Montenegro’s Ministry of Finance presented a revolutionary draft of the new VAT (PDV) Law, fully harmonized with the European DAC7 directive. Now international giants (Booking.com and Airbnb) are required to automatically transfer data on transactions and landlords’ income to the Tax Administration of Montenegro.
Long-term vs short-term rental in 2026
To understand which strategy is right for you, let’s compare a clean mathematical model using the example of purchasing a modern one-bedroom apartment in Budva or Bečići priced at €150,000.
| Financial indicator (2026 model) | Long-term rental (12 months) | Short-term rental (seasonal tourism) |
|---|---|---|
| Average rental price / day | €750 – €900 per month | €90,000 (occupancy ~100 days in season at €100/day) |
| Gross annual income (Gross Revenue) | €9,600 – €10,800 | €10,000 – €12,000 |
| Management and marketing expenses | 0% (self-managed) or 20% (agency) | 15% – 20% (Booking/Airbnb commission + management company) |
| Depreciation and utilities | Paid by the tenant (except building fee) | Paid by the owner (~€1,200 per year) |
| Effective income tax | ~10.5% (including a 30% tax deduction) | 7.5% (fixed tax on tourist accommodation with a 50% deduction) |
| Net profit per year (Net Profit) | ~€8,500 | ~€9,500 |
| Net payback (ROI) | 5.5% – 6.5% per year | 7.0% – 8.5% per year |
Booking and Airbnb: what changed in May 2026?
New control rules, borrowed from European practice, are radically changing the rules of the game in the short-term segment, but there is no need to be afraid of them. Here is how the updated fiscal system works:
- Platform batch control: regardless of whether the owner is a resident of Montenegro or a foreigner, Booking and Airbnb now keep strict records of every transaction.
- Protection for small owners: the legislation has preserved an important threshold — if your annual turnover from renting out housing does not exceed €30,000, you do NOT become a VAT (PDV) payer. Most private investors with 1–2 apartments remain outside the scope of the standard VAT (PDV) rate in Montenegro, which is 21%, and do not bear any additional tax burden.
- Tax on platform commission: VAT is now withheld from the portion of income that Booking/Airbnb take as their intermediary commission.
Takeaway for the investor: operating “in the gray” without registration and obtaining a municipal category (star rating) from June 2026 becomes technically impossible — aggregators will simply block the account without an official license. Clean, legal business through professional management companies is the only way to preserve high profitability.
Step-by-step formula: how to achieve stable passive income?
For your investment property to generate the target ROI of 6–8%, you need to follow three golden rules of the 2026 market.
Step 1. Choosing the right location and development format
For short-term rentals, walking access to the sea is critically important. The ideal option is new modern comfort-class projects in Bečići (for example, the residential complex 60k Bečići with an excellent entry price from €2,700 per m² or the ready-made complex Belvedere Residence). Bečići outperform central Budva thanks to a wider beach strip and better logistics for family vacations.
Step 2. Diversifying the strategy (Hybrid format)
Top MD Realty investors use a hybrid model:
- from June to September: short-term rentals through Booking/Airbnb at maximum resort rates (€100–€150/night).
- from October to May: medium-term rentals (€600–€700/month) to numerous expats and remote workers who choose the Budva Riviera for permanent residence in the off-season.
Step 3. Delegating operational management
Attempts to independently check in guests, wash linens, and collect the mandatory tourist tax (boravišna taksa) quickly turn passive income into hard round-the-clock work.
Using the ecosystem of MD Rent from MD Realty allows you to fully automate this process. For investors, it works like a professional full-cycle management company: the team takes care of marketing, advertising on top platforms, guest check-ins, and cleaning.
What should an investor pay attention to?
In addition to rental taxes, do not forget about the legal cleanliness of the purchase itself. We remind you that since this year Montenegro has tightened control over the origin of capital in large transactions. Read more about this in our article “New rules for buying and selling real estate in Montenegro in 2026”. If you are considering alternative payment methods from abroad, study the guide “Buying real estate with cryptocurrency in Montenegro in 2026”.
Frequently Asked Questions (FAQ)
What is the real payback on apartments in Budva and Bečići in 2026?
The real net yield (ROI) is 5.5%–6.5% per year for long-term rentals and 7.0%–8.5% per year for short-term (daily) or hybrid rental models.
Do I need to pay VAT when renting out an apartment through Booking and Airbnb in Montenegro?
No, if your total annual rental income does not exceed the €30,000 threshold. In that case, you are exempt from VAT and pay only a fixed income tax. The base income tax rate on capital income (which includes rent) in Montenegro is 15%. For individuals, a fixed tax deduction of 30% is provided to cover expenses (depreciation, utilities, etc.).
Where is it more profitable to buy real estate in Montenegro for passive income?
To maximize profit from the holiday season, Budva and Bečići lead the way (projects 60k, Belvedere Residence). For stable year-round rentals to expats, Tivat and the developed districts of Bar also show strong results.
Which online services will help me choose a property in Montenegro and manage rental income?
For in-depth analysis of locations, assessment of coastal infrastructure, and the distance from a specific residential complex to the sea, use the interactive MD Maps map. And to monitor your investments and budget, use the MD Rent platform — here you can not only conveniently choose a property, view payment charts, and order additional services, but also hand over your apartment in Montenegro for turnkey management (with full support for advertising and guest check-ins).