They paid 8.776 euros per square meter of a dilapidated building: Budva Municipality sells JRB building at a price many times higher than the estimated price

The Municipality of Budva purchased the completely dilapidated and unusable building of the Yugoslav River Shipping Company for 8.776,50 euros per square meter, which is many times higher than the estimated market price, which was determined by the municipality itself.

This calculation was announced by the leader of the "Movement for the City" and a councilor of that group of citizens in the Budva parliament. Đorđe Zenović.

"The bankruptcy administration of 'Vektra Montenegro' valued the JRB building at over 7,1 million euros during the sale. The area of ​​these buildings is 815 square meters. When the total area of ​​the buildings is derived from the offered and realized purchase price of the specific property of 7.152.789,2 euros, the amount is 8.776,5 euros per square meter of the building. It is important to emphasize the key characteristics and condition of the building that was the subject of the sale, namely that it was built 90 years ago, and that it was (we assume) reconstructed after the earthquake in 1979, and that since then no additional reconstruction or other investments have been made on it. Just by inspecting it on site, it is easy to conclude that the building is in very poor condition, dilapidated and practically unusable," emphasized Zemović.

In addition, as he emphasized, the site itself is included in the Special Purpose Spatial Plan for the Coastal Area, but no construction or expansion of capacity is allowed on the plots in question, which additionally affects the market value of the specific facility.

"Furthermore, as an example of a significant deviation from the market price estimate prepared by an anonymous appraiser, which was approved without objection by the bankruptcy judge, the bankruptcy administrator and the creditors' committee, I will also cite official data, namely the amount of the average market price prepared by the Statistics Administration for the purposes of determining the average price per square meter of a new construction for 2025. The specific market value is, with certain corrections, used when determining the market value of a square meter of construction facilities for the purposes of determining real estate tax. With the decision on the average market price per square meter of a construction facility for 2025, the Local Public Revenue Administration determined the average market price of construction facilities per square meter in the territory of the municipality of Budva for 2024 (which will also be applied for the calculation of taxes for 2025) in the amount of 2.581,6 euros for a business facility, a residential-business facility and business premises. Upon request, the Local Public Revenue Administration was provided with data from the Statistics Administration on 31 March. in 2025, that the average price per square meter of residential area in new buildings for 2024 is 1.844 euros," Zenović pointed out.

He also pointed out the fact that the Law on Real Estate Tax stipulates in Article 6f that the market value of real estate is reduced by one percent for each year of the age of the facility or the year since the last reconstruction.

"The market value of real estate can be reduced on this basis by a maximum of 60 percent of the value of the real estate. This means that the market value used as the basis for determining real estate tax should be further reduced by a percentage corresponding to the years that have passed since the last reconstruction, which was carried out after the 1979 earthquake, and this also indicates that the estimated value per square meter of 8.776,50 euros is very controversial."

"If the corrected market value according to the decision on the average market price per square meter of a construction facility for 2025 were accepted, i.e. the highest price of 2.581,6 euros for a business facility, residential-business facility and business premises, without any reduction due to the age of the facility and its non-functionality, by multiplying it by the square footage of the property in question of 815 square meters, we would arrive at an amount of 2.104 euros," Zenović pointed out.

As he added, if we take into account that this amount is the basis for determining real estate tax for a specific case, we arrive at a value that is more than three and a half times lower than that determined by the bankruptcy administration.

"Finally, in 2022, 'Vektra Montenegro' listed the amount of 7.970.000 euros in the sale advertisement, but that price then referred to the land area of ​​5.454 square meters + the facilities (building) of 815 square meters, while this latest price of 7.152.789,2 euros refers only to the facility of 815 square meters, without the land of 5.500 square meters surrounding the building and which is currently the subject of a dispute. By simple subtraction, we conclude that the land (on which it is not possible to build) of 5.500 square meters alone is worth only 800.000 euros, or over 160 euros per square meter, while the building of 815m2 (on which it is also not possible to build and is dilapidated) is worth 8.776,5 euros per square meter.

This is still a question for the relevant institutions. When we take into account the fact that the Municipality will have to invest significant funds in the reconstruction of the building, it turns out that it will cost us over 10 million euros. No one disputes the importance of the building for the city, but no one disputed the importance of the main and lower boulevards, as well as the Petrovac promenade 15-20 years ago, so we know how it all ended,” concluded Zenović.

The municipality will have to invest significant funds in the reconstruction of the building, and it turns out that it will cost us over 10 million euros. No one disputes the importance of the building for the city, but no one disputed the importance of the main and lower boulevards, as well as the Petrovac promenade 15-20 years ago, so we know how it all ended.