Between January and October 5, Herceg Novi reported property tax collections of €11.2 million, marking an increase of approximately 7.7% compared to the same period last year. The rise in revenue is attributed to elevated real estate values and enhanced enforcement measures.
In the corresponding timeframe of 2025, the municipality’s tax receipts were around €10.4 million, indicating an increase of roughly €800,000.
Local officials have linked this growth to improved property valuations and more effective collection of overdue taxes. This trend reflects how Montenegro’s robust property market is positively impacting local public finances, particularly in coastal areas where real estate related to housing and tourism has seen significant appreciation.
Herceg Novi is intensifying its enforcement efforts by utilizing employment data from the Tax Administration along with information on active bank accounts from the Central Bank to enhance collection from debtors.
Authorities anticipate that the Simo Milošević Institute will resolve its outstanding debts by year’s end. Additionally, the municipality is pursuing payments from Vektra Boka following the sale of Hotel Plaža, which could represent another substantial revenue source if claims are recovered.
The importance of property tax is growing for coastal municipalities as rising valuations broaden the tax base without necessitating increases in tax rates. This expansion provides local governments with additional fiscal capacity for infrastructure, utilities, and public services; however, it also increases their vulnerability to fluctuations in the property market.
For Herceg Novi, improved tax collections could facilitate higher capital expenditures at a time when growth in tourism, construction, and housing demand is exerting pressure on roads, utilities, and public infrastructure.
This development indicates that Montenegro’s property boom is not only reflected in transaction prices and rental rates but is also contributing significantly to enhancing municipal financial stability.
