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Capital gains tax when selling a flat in Serbia: 15%, exemption after 10 years, reinvestment

Serbian capital gains tax on selling a flat: 15% rate, indexed acquisition price, exemption after 10 years, inheritance, reinvestment and the PPDG-3R deadline.

INFO
Short answer. A capital gain (kapitalni dobitak) is the difference between the price you sold the flat for and the price you acquired it for, increased for consumer price growth between purchase and sale. Tax on that difference is 15% (Arts. 72-77 of the Personal Income Tax Act, Zakon o porezu na dohodak građana). There is no tax if you owned the property continuously for at least ten years, inherited it in the first order of succession, transferred it between spouses or blood relatives in the direct line, or sold below the acquisition price (Art. 72a). If you invest the proceeds within 90 days in housing for yourself or your family or household members, no tax is due; investing within 12 months gives a refund (Art. 79). The PPDG-3R return is filed within 30 days of the sale and the Tax Administration assesses the tax by decision.
ROK
Deadline. The seller files the PPDG-3R return within 30 days of the day the income from the sale was realised or started (as a rule, the day the contract is notarised or the price is paid). If you claim the housing reinvestment exemption, the filing deadline is 120 days from the sale. The tax is paid within 15 days of delivery of the Tax Administration's decision. If you paid the tax and then invested the proceeds in housing within 12 months of the sale, you apply for a refund. A capital loss can be offset against gains over the following five years. (Arts. 78, 79, 95(1)(1) and 95(4) and Art. 110(2) of the Personal Income Tax Act (Zakon o porezu na dohodak građana, Sl. glasnik RS Nos. 24/2001 ... 80/2026))

What a capital gain is and who pays

Under Art. 72 of the Personal Income Tax Act, a capital gain is the difference between the sale price and the acquisition price realised on the transfer for consideration of real rights in immovable property, copyright, company shares, securities, investment units and digital assets. For a citizen selling a flat, house, garage or plot, it is the difference between the price they sell for and the price they acquired the property for, increased for consumer price growth in the meantime. Colloquially it is "kapitalna dobit"; the statute says "kapitalni dobitak".

The taxpayer is any natural person who sells, including a flat-rate (paušalac) entrepreneur. An entrepreneur who keeps books and sells property from business assets is taxed through self-employment income, not under these rules. A non-resident pays tax on gains from property in Serbia, subject to a double taxation treaty with their state where one exists.

If the sale price is lower than the indexed acquisition price, that is a capital loss: no tax is due, and the loss can be offset against a gain from the sale of another right, share or security in the same year or in the following five years (Art. 78).

When no tax is due: 10 years, inheritance, spouses

Art. 72a lists the cases where the price difference is not treated as a capital gain at all:

  • sale of property that you owned continuously for at least ten years before the sale; the period runs from the day of acquisition, as a rule from notarisation of your purchase contract or from the final inheritance decision;
  • sale of property acquired by inheritance in the first order of succession, that is from a parent or spouse;
  • a transfer between spouses and blood relatives in the direct line (parents, children, grandchildren, grandparents), so selling or gifting a flat to your child creates no capital gain;
  • a transfer between former spouses in direct connection with the divorce;
  • transfer of debt securities issued by the Republic, a province, a municipality or the NBS.

The ten-year rule covers the whole flat only if you held the whole flat for ten years. If you acquired your share in parts, the exemption covers only the part that has been in your ownership for at least ten years (Art. 72a(2)).

An exemption does not mean the return should be skipped. The Tax Administration receives every notarised contract from the notary and, if no return is filed, assesses the tax from the data it holds. With a return and proof of the date and basis of acquisition, the decision records that nothing is owed.

How it is calculated: sale price, acquisition price and indexation

The sale price is the contract price without transfer tax. If the Tax Administration finds the contract price lower than market value, it uses the market price it determines itself (Art. 73). In an exchange of flats, the sale price is the market price of the flat you give.

The acquisition price is the price in the contract by which you acquired the flat (Art. 74(1)). It is indexed by the annual consumer price index of the Statistical Office for the period from acquisition to sale (Art. 74(15)), so the real gain is taxed, not inflation. Special cases:

  • a flat you built yourself: the acquisition price is the construction cost evidenced by invoices and proof of payment, indexed from 1 January of the year after the investment; without evidence, the market value that served as the property tax base in the year that liability arose is used (Art. 74(2) and (16));
  • a flat acquired by gift or inheritance (outside the first order and the direct line): the acquisition price is the price at which the donor or deceased acquired it, or, if that cannot be established, the market value at the time they acquired it, as determined by the Tax Administration (Art. 75(1)); if they acquired it before 24 January 1994, the market value on that day is used;
  • a flat acquired under a lifetime maintenance contract: the market price that served as the transfer tax base when you acquired it (Art. 75(3)).

A price agreed in euros is converted to dinars at the exchange rate on the day of acquisition and on the day of sale before the difference is calculated.

Worked example

A flat bought in 2019 for 7,000,000 dinars and sold in 2026 for 11,000,000 dinars. Ownership lasted seven years, so the ten-year exemption does not apply.

Assume, for illustration, that cumulative consumer price growth from purchase to sale is 40% (the actual factor depends on the exact dates and the annual indices published by the Statistical Office). The indexed acquisition price is 7,000,000 x 1.40 = 9,800,000 dinars. Capital gain: 11,000,000 - 9,800,000 = 1,200,000 dinars. Tax: 1,200,000 x 15% = 180,000 dinars.

Without indexation the gain would be 4,000,000 and the tax 600,000 dinars; that is why you should ask for the acquisition price to be indexed in the return and attach the contract showing the acquisition date.

If the same seller invests 5,500,000 dinars (half of the sale price) within 90 days in buying another flat for themselves, the tax is reduced proportionally to 90,000 dinars (Art. 80). If they invest everything, no tax is due, subject to the floor area limit described below.

Reinvesting in housing: 90 days, 12 months and what qualifies

Art. 79 exempts a seller who, within 90 days, invests the proceeds in solving their own housing need or that of their family or household members, in Serbia. If the investment is made within 12 months of the sale and the tax has already been paid, a refund is granted on request to the branch for the seller's residence. Investing only part of the proceeds reduces the tax proportionally (Art. 80).

The Rulebook on the criteria for the capital gains tax exemption (Sl. glasnik RS No. 38/2001) and the Tax Administration's guidance recognise as solving a housing need: buying or building a flat or house for the taxpayer or a family member who has no adequate housing or whose housing conditions improve; buying two or more units to split a household (children moving out, divorce, resolving co-ownership); buying one unit instead of two to merge a household; exchanging flats; converting common premises into a flat, adding storeys, extending, reconstructing and adapting; and any other appropriate way.

The exemption is tied to an appropriate floor area: up to 45 m2 for a single person and a further 20 m2 for each additional member of the family household. If you invest more than the market value of that area, the exemption is proportional. Evidence consists of the notarised purchase contract, construction contracts with a building permit, invoices for materials and proof of payment, and certified statements. When solving a family member's housing need, you also attach a gift contract or certified statement and proof that the member acquires ownership or another real right in their own name. Buying a flat to let or commercial premises is not solving a housing need.

The PPDG-3R return: deadline, who files, attachments, payment

The seller files the PPDG-3R form within 30 days of the day the income was realised or started (Art. 95(1)(1)). If the housing exemption is claimed, the deadline is 120 days from the day of sale (Art. 95(4)). It is filed electronically via the ePorezi portal (qualified certificate, eID with the ConsentID app, or SmartBox), or on paper, in person or by post, with the Tax Administration branch for your residence; a non-resident files through a tax representative.

The return is accompanied by the notarised contract transferring the flat and proof of how you acquired it: the earlier purchase contract, buy-out contract, gift or lifetime maintenance contract, inheritance decision, judgment, or building and occupancy permits for a self-built property. When claiming the exemption, you also complete the parts of the return on the investment and attach evidence of the new home.

Capital gains tax is not self-assessed; it is assessed by a decision of the Tax Administration (Arts. 100 and 109). It is paid within 15 days of delivery of the decision (Art. 110(2)). If the last day of a deadline falls on a non-working day, the deadline expires on the next working day.

What happens if you do not file

The Tax Administration assesses the tax from the data it holds, and it receives the notarised contract from the notary. Unpaid tax accrues interest at the NBS reference rate increased by ten percentage points, from the day after the due date (Art. 75 of the Tax Procedure and Tax Administration Act). Failing to file is a misdemeanour for a natural person with a fine of 5,000 to 150,000 dinars, a late return is fined 10,000 dinars, and non-payment 10,000 to 50,000 dinars depending on the amount (Art. 180). Without a return you also lose the ability to claim indexation and the reinvestment exemption, because both are established from evidence you submit yourself.

What this is not: transfer tax and the annual income tax

Selling a flat also triggers the 2.5% transfer tax on absolute rights on market value under the Property Taxes Act. The statutory taxpayer is the seller, contracts usually shift it to the buyer, and it is paid whether or not there was a gain. For a new build from a developer, VAT is paid instead. Capital gains tax is a separate obligation of the seller that cannot be shifted to the buyer by contract.

Capital gains are not included in the annual personal income tax (Art. 87(2)), so selling a flat does not by itself trigger an annual return. Rental income from property does count.

When to consult a lawyer or tax adviser

Professional help makes sense when you cannot document the acquisition price (a flat from a buy-out, construction without invoices, a gift from someone who acquired the flat long ago), when you sell a flat inherited outside the first order of succession, when you plan to reinvest for a family member and need a gift contract and statements prepared within 90 days, when you are a non-resident, and when the Tax Administration sets a market price above the contract price in its decision. An appeal against the decision may be lodged within 15 days of delivery. For a straightforward sale of a flat bought under a contract with a clear price, the return and calculation can as a rule be handled without help.

Sources

What to do

  • Check whether there is a capital gain at all: compare the contract sale price (net of transfer tax) with the acquisition price. If you sold below the acquisition price, that is a capital loss and no tax is due, but the return is still filed (Arts. 72, 73 and 95).
  • Check whether you are exempt under Art. 72a: the flat was in your ownership continuously for at least ten years (counted from the day of acquisition), it was inherited in the first order of succession (from a parent or spouse), the transfer is between spouses or blood relatives in the direct line, or between former spouses in direct connection with the divorce. In those cases the difference is not treated as a capital gain.
  • Establish the acquisition price: the price in the contract by which you acquired the flat, increased (indexed) by the annual consumer price index of the Statistical Office from the day of acquisition to the day of sale. For a gift or inheritance it is the price at which the donor or deceased acquired it; for a flat you built yourself, the documented construction costs (Arts. 74 and 75).
  • Calculate the tax: (sale price - indexed acquisition price) x 15% (Arts. 76 and 77). If you sold another property, company share or security at a loss in the same year, the loss is offset against the gain (Art. 78).
  • Decide on reinvestment: if within 90 days of the sale you invest the proceeds in buying, building, extending or adapting a home in Serbia for yourself or a family or household member, no tax is due. If you invest only part, the tax is reduced proportionally. Investing within 12 months gives a refund of tax already paid (Arts. 79 and 80).
  • File the PPDG-3R return through the ePorezi portal (or on paper with the Tax Administration branch for your place of residence) within 30 days, or 120 days if you claim the exemption. Attach the notarised sale contract and proof of how you acquired the flat: the earlier purchase contract, gift contract, inheritance decision, or building and occupancy permits (Art. 95).
  • Wait for the Tax Administration's decision and pay within 15 days of delivery (Art. 110(2)). The same decision establishes the exemption if you claimed it. If the deadline is missed, interest accrues and failing to file is a misdemeanour under Art. 180 of the Tax Procedure and Tax Administration Act.
  • Do not confuse this tax with the transfer tax on absolute rights (2.5% of market value, Property Taxes Act), which is paid on every sale regardless of gain, or with the annual personal income tax, which does not include capital gains.

What it costs

The tax itself is 15% of the capital gain, that is of the difference, not of the whole price. No fee is charged for filing the PPDG-3R return or a refund request. The 2.5% transfer tax on absolute rights is a separate cost of the sale and is paid even when there is no gain. Engaging a tax adviser or lawyer to calculate the gain, gather evidence of the acquisition price and document the housing investment is charged by agreement; for drafting submissions a lawyer applies the Tariff on Attorneys' Fees and Expense Reimbursement.

FAQ

How much is capital gains tax on selling a flat in Serbia in 2026?

The rate is 15% and has not changed (Art. 77 of the Personal Income Tax Act). It applies to the capital gain, meaning the difference between the sale price and the acquisition price indexed for consumer prices from acquisition to sale, not to the whole sale price. If there is no difference or it is negative, there is no tax. The Tax Administration assesses the tax by decision based on your PPDG-3R return, and it is paid within 15 days of delivery of the decision.

Do I pay tax if I sell a flat I have owned for more than 10 years?

No. The difference realised on the sale of a property that you owned continuously for at least ten years before the sale is not treated as a capital gain (Art. 72a(1)(5)). The period runs from the day you acquired the flat, as a rule from notarisation of the purchase contract or from the final inheritance decision. If you acquired your share in stages, the exemption covers only the part held for ten years (Art. 72a(2)). It is still safer to file the return with proof of the acquisition date, because the Tax Administration then confirms by decision that no tax is due.

Do I pay capital gains tax when selling an inherited flat?

It depends on who you inherited from. If you inherited the flat in the first order of succession, from a parent or spouse, the difference on sale is not treated as a capital gain (Art. 72a(1)(1)), regardless of how long you owned it. If you inherited from another relative, for example an aunt or brother, tax is due and the acquisition price is the price at which the deceased acquired the flat, or the market value at the time they acquired it as determined by the Tax Administration (Art. 75). The same applies to a flat received as a gift from someone who is not a spouse or relative in the direct line.

How is the acquisition price calculated if I bought the flat years ago for much less?

The acquisition price from your contract is indexed: it is increased by the annual consumer price index published by the Statistical Office of the Republic of Serbia for the period from acquisition to sale (Art. 74(15)). This way only the real gain is taxed, not inflation. If you built the flat yourself, the acquisition price is the construction cost evidenced by invoices and proof of payment, indexed from 1 January of the year after the investment; if you cannot prove the costs, the property tax base for the year the liability arose is used (Art. 74(2) and (16)). A contract price expressed in euros is converted to dinars at the rate on the day of acquisition and on the day of sale.

What does reinvestment within 90 days mean and what counts as solving a housing need?

If within 90 days you invest the sale proceeds in solving your own housing need or that of members of your family or household, in Serbia, no capital gains tax is due; if you invest within 12 months and have already paid the tax, you are refunded (Art. 79). Recognised uses are buying or building a flat or house, buying two flats to split a household, buying one instead of two to merge a household, exchanging flats, adding storeys, extending, reconstructing and adapting (Rulebook, Sl. glasnik RS No. 38/2001). The exemption is tied to an appropriate floor area: 45 m2 for a single person plus 20 m2 for each further household member; if you invest more than the market value of that area, the exemption is proportional. Evidence is the notarised purchase contract for the new flat, construction contracts with permits, invoices and proof of payment, and, when you solve a family member's housing need, also a gift contract or certified statement and proof that they acquire ownership in their own name.

What is the deadline for the PPDG-3R return and what if I miss it?

The seller files within 30 days of the day the income from the sale was realised or started; if you claim the housing exemption, the deadline is 120 days from the sale (Art. 95(1)(1) and (4)). It is filed electronically via ePorezi or on paper with the branch for your residence. If you do not file, the Tax Administration assesses the tax from the data it holds (it receives the contract from the notary), interest accrues on the debt at the NBS reference rate plus ten percentage points (Art. 75 of the Tax Procedure Act), and failing to file is a misdemeanour with a fine of 5,000 to 150,000 dinars for a natural person, or 10,000 dinars for a late return (Art. 180).

Is capital gains tax the same as the 2.5% tax paid on a sale?

No, they are two different taxes. The 2.5% transfer tax on absolute rights is paid on the market value of the property on every transfer for consideration, whether the seller made a gain or a loss; the statutory taxpayer is the seller, and contracts often shift it to the buyer (Property Taxes Act). The 15% capital gains tax is paid only on the difference between the sale price and the indexed acquisition price, if positive, and cannot be shifted to the buyer by contract. When buying a new build from a developer, VAT replaces the 2.5%, but that does not change the seller's capital gains liability on a later sale.