Lower taxes on property affected by fires? Councilors of the Movement for Podgorica propose relief for citizens

Citizens of Podgorica whose real estate was damaged or destroyed in fires and other natural disasters could be partially or completely exempt from paying real estate tax for a period of two years.

This is envisaged in the Proposal for a Decision on the Reduction of Real Estate Tax Payments Due to Damage Caused by Natural Disasters, which "Vijesti" had access to, and which councilors in the Capital City Assembly could vote on at the end of September or beginning of October.

The proposal was submitted to the Capital City Assembly by councilors of the Movement for Podgorica. Dragutin Vučinić i Ranka Otašević.

The new measure comes a year after major fires hit Podgorica and other parts of Montenegro, and citizens are still waiting for state aid for last year's damage.

"Vijesti" announced at the beginning of September that the Commission for the Assessment of Damage from Natural Disasters had received around 550 claims due to the 2025 fire, mostly from Podgorica. The total estimated damage from natural disasters during the past year amounted to around 3,5 million euros, of which around 2,5 million related to individuals. Damage from the fire, the editorial office was told at the time, makes up approximately 90 percent of that total figure. The Commission has only 131.192,45 euros at its disposal, and they announced that payments would not begin until funds for all individual damages had been secured.

Commission minutes as evidence

According to the proposal, the taxpayer would have to submit a request, and the main evidence would be the minutes of the Commission for the Assessment of Damage from Natural Disasters. After determining the facts and the amount of damage from the minutes, the competent local government body would re-evaluate the market value of the damaged property.

"A taxpayer whose real estate has suffered complete or partial damage due to a natural disaster may be exempted from paying real estate tax in percentage or in full for a period of two years," reads Article 4 of the draft decision.

According to the same article, this period would be calculated from January 1 of the year following the year in which the damage was determined, or from the date determined by the competent authority in an individual decision.

Article 5 of the draft decision stipulates that the reduction or exemption is determined in relation to how much the market value of the specific real estate, facility or land has been reduced due to the disaster.

"The tax reduction or exemption from this decision shall be carried out in a manner and in a percentage determined based on the reduced market value of the real estate," the proposal states.

How the percentage of reduction in the market value of real estate will be determined, as well as the corresponding percentage of reduction or exemption from tax, will be subsequently regulated by a rulebook of the local government body responsible for local public revenues. The proposal envisages that the rulebook be published on the official website of the Capital City.

The competent authority, after the procedure has been completed, would issue an individual decision for each taxpayer, determining whether they are entitled to a reduction or exemption.

The reason for the decision, as stated, is the need to ensure an "efficient and fair way" of re-establishing tax liability based on the actual condition of the property in the event of damage caused by force majeure, "as was the case with the great fire in 2025."

The legal basis cited is, among other things, Article 8 of the Law on Real Estate Tax, according to which the local government, in the event of damage caused by force majeure, including fire, flood, drought or earthquake, may reassess the market value of real estate on its own or at the request of the taxpayer.

The proponents also refer to Article 38 of the Law on Local Self-Government, which establishes among the competencies of the municipal assembly the adoption of regulations and other general acts, as well as the introduction and determination of municipal taxes, fees, fees and other own revenues.

"The adoption of this decision creates clear and transparent criteria and a procedure for exercising taxpayers' rights in cases of damage caused by force majeure, thus ensuring equal treatment of taxpayers and a fairer determination of their tax liability in accordance with the actual condition of the real estate," Vučinić and Otašević emphasize in the explanation of the proposal.

Possible relief while waiting for state aid

Real estate tax is one of Podgorica's largest own-source revenues. The 2026 budget plans to generate 16,8 million euros in revenue from this source, or 10,23 percent of the city's total revenues.

The capital city earned 17.998.152,70 euros from property taxes last year, about 2,4 million more than the plan at the time, according to previously published data from the city's Secretariat for Financial Affairs and Budget Analysis.

The measure, if adopted by the councilors, would represent a local form of assistance to citizens affected by disasters at a time when state promises of direct compensation for damage have not yet been realized.

The Ministry of Agriculture, Forestry and Water Management told "Vijesti" in early September that the requests from last year's fires had been processed, but that the money had not yet been provided.

"All requests have been processed and are awaiting payment when the conditions are met, or the missing funds are provided," the Ministry announced at the time.

By May, the State Commission had made decisions on the requests of individuals who were granted compensation of up to ten percent of the estimated damage, but they were not implemented due to lack of funds.