Herceg Novi collected €11.2 million in property tax revenue between January and October 5, representing an increase of about 7.7% compared with the same period a year earlier.
Property Tax Collections Increase by €800,000
The municipality collected approximately €10.4 million during the comparable period of 2025, putting the year-on-year increase at roughly €800,000. Local authorities attributed the higher receipts to increased property valuations and more effective collection of overdue liabilities. The stronger performance reflects the impact of higher real-estate values on local government revenue, particularly in Montenegro’s coastal municipalities, where housing and tourism-related properties have recorded significant appreciation.
Herceg Novi Strengthens Debt Collection
Municipal authorities are also using additional information to improve collection from taxpayers with outstanding obligations. Data on employment from the Tax Administration and information on active bank accounts from the Central Bank are being used in efforts to recover overdue property-tax liabilities.
Officials expect the Simo Milošević Institute to settle its outstanding obligations by the end of the year. The municipality is also seeking payment from Vektra Boka following the sale of Hotel Plaža, which could provide an additional source of revenue if the claims are recovered.
Higher Valuations Expand the Municipal Tax Base
Property tax is becoming increasingly significant for coastal municipalities as higher valuations expand the taxable base without corresponding increases in tax rates. This provides local governments with additional fiscal capacity for infrastructure, utilities and public services, while also increasing the exposure of municipal revenue to changes in the property market. For Herceg Novi, stronger property-tax collections come as tourism, construction and housing demand increase pressure on roads, utilities and other public infrastructure.
