The legal basis hasn't changed — but enforcement has

Renting out short-term is legal for both residents and foreign owners under the Law on Tourism and Hospitality, without setting up a company, as long as the property does not exceed 7 bedrooms or 15 beds. Above that, different licensing applies.

What's new is the platform-side enforcement. As of 2026, Montenegro is rolling out VAT rules aligned with the EU's DAC7-style approach: Airbnb and Booking.com will be required to calculate, withhold, and transfer VAT to the Montenegrin budget on bookings where the property owner is not registered as a taxpayer. In practice, the platforms become tax agents of the state. Owners who have kept their rental "informal" no longer have that option — the platform will withhold the tax automatically, at less favorable terms than if the owner is properly registered.

What you need before you list

1. Categorization certificate ("Airbnb license") — issued by the municipality where the property sits.
2. Title deed (List nepokretnosti) confirming ownership.
3. Use permit or electrical safety certificate (Atest).
4. Registration of every guest within 24 hours of arrival (Prijava boravka) — this is the owner's legal obligation, not the guest's, when booking outside a hotel.

Skipping the categorization step is the most common mistake we see among new owners — and it's now the first thing the new VAT-monitoring system will flag.

The tax math, properly registered

• Rental income tax: flat 15%, but short-term rentals qualify for a 50% standard deduction, bringing the effective rate to 7.5%.
• Municipal surtax: 13–15% of the calculated income tax (varies by municipality).
• Tourist tax (Boravišna taksa): €1/adult/night in coastal municipalities in 2026; children under 12 exempt, 12–18 at half rate. This is collected from the guest, not the owner — but the owner is responsible for remitting it.

Registered correctly, Montenegro's effective tax burden on short-term rental income remains genuinely low by European standards — the 2026 reform targets unregistered operators, not compliant ones.

What this means if you're buying with rental income in mind

If you're evaluating a property for its yield potential, factor in categorization timelines (weeks, not days) before your first booking season. If you already own and have been renting informally, this is the year to register — the cost of staying invisible has just gone up, and the cost of doing it right hasn't changed.

We're launching STR management as a dedicated service this year — from categorization paperwork through guest registration and tax filing — for owners who want the yield without doing the admin themselves. Get in touch if you'd like a walkthrough for your specific property.