What is Property Transfer Tax?
When you purchase property in Bosnia and Herzegovina, you are required to pay a one-time property transfer tax. This is separate from the purchase price and must be factored into your total budget.
The Tax Rate
In the Federation of BiH (FBiH), the property transfer tax is 5% of the market value of the property.
Example: If you purchase an apartment for 100,000 BAM, the transfer tax is 5,000 BAM.
Who Pays?
By law, the buyer pays the transfer tax. However, it is not uncommon for the seller and buyer to negotiate who bears this cost – this should be clearly specified in the purchase contract.
When Must It Be Paid?
The tax must be paid after notarization of the purchase contract and before submitting the land registration application. Without proof of payment, the court will not process the ownership registration.
Payment Deadline
The Tax Authority of FBiH allows 30 days from the date of contract notarization to pay the tax.
Are There Exemptions?
- First-time buyers: Depending on property size and canton regulations, first-time residential buyers may qualify for a reduced rate or exemption
- Inheritance: Transfers through inheritance are not subject to transfer tax, though other fees apply
- Gifts between first-degree relatives: These may be exempt or subject to reduced rates
How the Process Works
The notary is obligated to report the transaction to the Tax Authority. You will then receive an assessment notice and pay the tax to the designated account.
Our Advice
Always ask your agent or notary for a full breakdown of purchase costs before signing anything. Arimes provides transparent cost calculations for every transaction.