Airbnb and Short-Term Rental Rules in Montenegro: A 2026 Legal Guide for Owners

Running an Airbnb in Montenegro is fully legal for both local and foreign property owners. But legal does not mean informal.

As of 2026, short-term rentals are governed by the Law on Tourism and Hospitality. This law allows individuals to offer accommodation without setting up a company, as long as the property does not exceed 7 bedrooms or 15 beds. Beyond that threshold, a different set of rules applies.

This guide walks through everything an owner needs to know to operate a short-term rental legally and avoid the penalties that come with getting it wrong.

Getting Licensed: The Categorization Process

Before you can legally list a property on Airbnb or Booking.com, it needs a categorization certificate. This is commonly referred to as the Airbnb license, and it is issued by the local municipality.

Application Requirements

To apply, owners need to submit a title deed, known locally as a List nepokretnosti. You will also need a completed application form and either a use permit or an electrical safety certificate, called an Atest.

Inspection and Approval

Once your application is submitted, a municipal inspection panel will visit the property. They assess location, amenities, and equipment to assign a star rating. This process typically takes 2 to 3 weeks from application to approval.

What You Receive

Once approved, you are issued a door-mounted star plaque that must be displayed at the property. You will also receive a Guest Book, known as the Knjiga gostiju, and a Complaint Book, the Knjiga prigovora. Both must be kept on site.

Validity and Renewal

The categorization certificate is valid for 3 years. After that, it must be renewed through the same municipal process.

Guest Registration: What Owners Must Do for Every Stay

Montenegro takes guest registration seriously, and the rules apply to every single booking.

You must report each guest’s arrival within 12 hours of check-in. Departure must be reported within 24 hours. Both reports go to the local Tourist Organization or police station.

Registration is handled electronically through municipal-specific platforms. Tivat uses a system called Lotos Tourist. Kotor uses eBoravak. To use either system, owners need a digital certificate issued by the Montenegrin Postal Service.

Property Standards You Need to Meet

A categorization certificate is not a one-time formality. Properties must maintain minimum quality standards on an ongoing basis.

This covers cleanliness, reliable utilities, and basic security measures. Fire extinguishers, smoke detectors, and a first aid kit are all mandatory equipment.

One notable point for owners coming from other European markets: Montenegro currently has no annual cap on the number of nights a property can be rented out. Many EU cities impose strict night limits on short-term lets. Montenegro does not, at least for now.

How Short-Term Rental Income Is Taxed

The tax treatment of short-term rentals in Montenegro is genuinely favourable, but it has several moving parts.

Personal Income Tax

The statutory flat rate on rental income is 15 percent. However, short-term rentals qualify for a 50 percent standard deduction allowance. That brings the effective tax rate down to 7.5 percent on short-term rental income specifically.

Municipal Surtax

On top of income tax, a municipal surtax applies. This ranges from 13 percent to 15 percent of the calculated income tax, depending on which municipality the property is in.

Tourist Tax

Guests are charged a tourist tax, known as the Boravisna taksa. In 2026, coastal municipalities charge a uniform rate of 1 euro per adult per night. Children under 12 are exempt. Guests aged 12 to 18 pay a reduced rate of 50 percent.

VAT

Since January 2025, accommodation services carry a reduced VAT rate of 15 percent. VAT registration only becomes mandatory once your annual turnover exceeds 30,000 euros. Below that threshold, you are not required to register for VAT.

Should You Operate as an Individual or Set Up a Company?

How you structure your rental business depends largely on scale.

Operating as an individual, known as Fizicko lice, works well if you own one or two properties and your income sits below the 30,000 euro VAT threshold. It is simpler, with less administrative overhead.

Setting up a company, a DOO, is strongly recommended once you hold three or more properties, or once you are approaching the VAT threshold. It is also the preferred route if you are seeking a Montenegrin residence permit through your rental business, since a registered company can support that application in ways individual ownership cannot.

Enforcement Has Tightened Significantly

Montenegrin authorities have stepped up enforcement considerably. Inspections now include post-midnight checks, where officials cross-reference live Airbnb listings against the Central Tourism Register.

Penalties are cumulative, meaning multiple violations can stack on top of each other.

Repeat violations within a 12 month period can result in a six month ban on operating the activity entirely. Given how routine these inspections have become, the financial case for getting properly licensed from day one is straightforward.

What This Means for Foreign Investors

If you are a foreign investor earning rental income in Montenegro, that income generally needs to be declared in your home country as well.

The good news is that Double Tax Treaties exist between Montenegro and many countries, including Turkey. Under these treaties, tax already paid in Montenegro can typically be credited against the tax owed at home, which prevents you from being taxed twice on the same income.

It is also worth knowing that Airbnb does not currently report booking data automatically to Montenegrin authorities, since Montenegro is not yet an EU member. That said, authorities are not relying solely on platform data. Bank account monitoring under the Common Reporting Standard, combined with direct audits of live listings, gives them other ways to detect undeclared activity. Operating without a license is a risk, not a loophole.

Short-term renting in Montenegro is legal, well regulated, and genuinely tax efficient when done properly. The categorization process takes a few weeks and some paperwork. Guest registration needs to happen on every single booking, not occasionally. And the tax regime, particularly the 7.5 percent effective rate on rental income, is one of the more attractive setups in Europe right now.

Get licensed, register your guests on time, and keep good records. The rest of the process is genuinely manageable.