Gift and inheritance tax in Serbia: 1.5% and 2.5% rates, who is exempt, filing and deadlines

What is subject to inheritance and gift tax

Inheritance and gift tax is governed by the Property Taxes Act, the same statute that governs the annual property tax and the tax on the transfer of absolute rights. It applies to ownership and other rights in real estate (land, houses, flats, shops, garages) and the right to use a parking space that an heir inherits or a donee receives as a gift (Art. 14(1)). Also taxed are inherited or gifted cash, savings, bank deposits, monetary receivables, digital assets, intellectual property rights and ownership of used motor vehicles, vessels and aircraft and other movables (Art. 14(2)).

Exempt are shares in legal entities and securities, new vehicles not yet registered, mopeds, tractors and work machines, and human cells, tissues and organs (Art. 14(6)). For citizens the most important exemption is that of money and movables: what you receive from the same person in one calendar year is exempt up to RSD 100,000, and above that amount only the excess is taxed (Art. 14(6)(3) and (7)). The threshold applies per basis and per person: RSD 100,000 from a grandmother and RSD 100,000 from a grandfather in the same year are both exempt. No return is filed for exempt gifts.

A transfer without consideration that is subject to VAT is not a gift, nor is income already taxed under personal or corporate income tax (Art. 14(4)). Winnings from games of chance are not a gift. A lifetime support agreement is not a gift because it is for consideration: it attracts tax on the transfer of absolute rights, covered on the page on that agreement.

Who is exempt

The exemption in Art. 21(1)(1) covers what most people want to know: an heir of the first order of succession, the spouse and a parent of the deceased, and a donee of the first order and the donor's spouse, pay no tax. Under the Inheritance Act, the first order of succession consists of the deceased's descendants (children, adopted children, grandchildren) and the spouse. A flat a child inherits or receives as a gift from a parent is tax-free regardless of value.

The difference between inheritance and gift lies with the parent. A parent who inherits from their child is exempt, but a parent who receives a gift from their child is not: for gifts the Act exempts only the first order and the spouse, so the parent pays 1.5% as a person of the second order.

A cohabiting partner is not a spouse under this Act or under the Inheritance Act: they do not inherit by law, and on what they receive by will or gift they pay 2.5%. That is one reason couples in a long cohabitation consider marriage or a lifetime support agreement.

Other exemptions: a farmer of the second order who inherits or receives property used for farming, if they lived in the same household as the deceased for at least a year; an heir or donee of the second order who inherits one flat in which they lived with the deceased for at least a year before the death (typically a brother or sister in a shared flat); a donee who in probate receives a share they would otherwise have inherited had the donor renounced the inheritance; the division of joint marital property on divorce; foundations, endowments and associations for property serving a public-benefit purpose; the Republic, a province and a municipality (Art. 21(1)(2) to (14)). A resident who inherits property abroad and pays tax there is entitled to a tax credit up to the amount of the domestic tax (Art. 22).

The rates: 1.5% and 2.5%

The rates are proportional (Art. 18). An heir or donee in the second order of succession pays 1.5%: the deceased's parents and their descendants, i.e. brothers and sisters, nephews and nieces, as well as a spouse of a deceased without descendants (who is exempt anyway). The third and more distant orders and unrelated persons pay 2.5%: grandparents, aunts, uncles, cousins, friends, neighbours, cohabiting partners (Art. 19). Who is in which order is determined by the Inheritance Act, and the same relationship applies when you inherit by will: a nephew who inherited his aunt under a will is in the third order and pays 2.5%.

The base: market value less debts

The base is the market value of the inherited or gifted property on the day the tax liability arises, as determined by the Tax Administration, and for inheritance reduced by the debts, costs and burdens the heir must pay out of the estate, for example the deceased's loan, funeral costs or a payment to co-heirs (Art. 16(1) and (2)). The valuation is based on contract prices in the same area; the value stated in a gift deed is not binding. For used vehicles no market valuation is made; the value is calculated by formula: (320 x engine displacement in cm3 + 6,400 x power in kW) x an age coefficient falling from 100% for a vehicle up to two years old to 30% for one over ten years old (Art. 16(3) to (5)).

When the tax liability arises

For inheritance, the liability arises on the day the inheritance decision becomes final; for a gift, on the day the contract is concluded, or certified or notarised, and for a gift without a written contract on the day of receipt (Art. 17(1) and (2)). If a right of usufruct is established on the property, typically when a parent gifts a flat but keeps the right to live in it, the liability arises only when the usufruct ends or the property is sold (Art. 17(3)). A share of the estate that an heir cedes to a co-heir in probate, or a physical division disproportionate to the inheritance shares, is also taxed as a gift (Art. 17(4)). If no return was filed, the liability arises on the day the Tax Administration learns of the inheritance or gift (Art. 17(5)).

The PPI-3 return: who, when and where

The rule on notaries has simplified the procedure considerably. When the document was drawn up, certified or confirmed by a notary, or the notary issued the inheritance decision as the court's commissioner, the heir and the donee file no return (Art. 34). Within 24 hours the notary sends the document or the final decision to the cadastre through the e-counter, together with your statement on debts burdening the estate, your claim for exemption or tax credit and the evidence you gave the notary, and the cadastre forwards everything to the Tax Administration at once. It is therefore important to give the notary complete information at the hearing or at certification: if you later fail to provide evidence within the deadline the Tax Administration sets, it is deemed that there are no debts and that you claim no exemption.

The PPI-3 return is filed within 30 days of the liability arising in all other cases (Art. 35(1)): when the inheritance decision was issued by a court, when the gift is money, a vehicle or another movable, and for a gift without a written contract. According to the Tax Administration's guidance, a return is also filed for a gift contract for a movable that a notary certified, because Art. 34 covers real estate. The return is filed by the heir or donee, in person, through an attorney-in-fact or a legal representative; a donor who undertook in the contract to pay the tax is liable as a joint and several guarantor. It is filed electronically through the ePorezi portal or on paper with the Tax Administration branch for the place of residence, or, when the only asset is real estate, with the branch for the area where it is located (Art. 35(2) and (3)). The decision or contract, the statement on debts and the evidence for an exemption are attached.

Assessment, payment and penalties

The tax is assessed by a decision of the Tax Administration and paid within 15 days of service of the decision on the heir or donee (Art. 40). When the donor is a joint and several guarantor, the decision is also served on the donor, but the deadline runs from service on the donee. After the deadline, interest accrues at the National Bank of Serbia reference rate plus ten percentage points (Art. 75 of the Tax Procedure and Tax Administration Act). Failing to file a return when you were required to is a misdemeanour for an individual with a fine of RSD 5,000 to 150,000 (Art. 180 of the same Act). Whoever within five years changes occupation (farmer) or disposes of a taxi or rent-a-car vehicle for which an exemption was granted reports this within 30 days and pays the tax that would otherwise have been due (Art. 21(2) and (3)).

Worked example

An aunt leaves a flat to her nephew by will, and the notary issues the inheritance decision. The Tax Administration values the flat at RSD 9,000,000; out of the estate the nephew pays RSD 500,000 of the aunt's outstanding loan. The base is 8,500,000, the rate 2.5%, the tax RSD 212,500. The nephew files no return because the decision was issued by the notary; he pays within 15 days of the assessment. Had the aunt's sister inherited the flat, the tax would be 1.5%, i.e. RSD 127,500, and had she lived with the aunt in the same flat for at least a year, zero. Had the aunt gifted the flat to her nephew during her lifetime and kept a usufruct, the tax would fall due only after her death, at the value at that time.

Inheritance tax, transfer tax and capital gains

Three taxes are often confused. Inheritance and gift tax is paid on acquisition without consideration. The 2.5% tax on the transfer of absolute rights is paid by the seller on the sale of real estate or under a lifetime support agreement. The 15% capital gains tax is paid when you later sell inherited or gifted real estate for more than its acquisition price, where the acquisition price is the price the deceased or the donor paid for it, or, if that cannot be established, the market value at the time they acquired it (Art. 75 of the Personal Income Tax Act). The sale of real estate inherited in the first order of succession, and the sale of real estate you have owned for at least ten years, are not subject to capital gains tax (Art. 72a(1)(1) and (5)). Details are on the page on capital gains tax. Keep the contract or decision by which the deceased or the donor acquired the property, together with your own inheritance tax or exemption decision: the calculation on a later sale depends on them.

When to consult a lawyer or a tax advisor

A lawyer when the heirs are considering ceding shares among themselves in probate, because a disproportionate division is taxed as a gift, when choosing between a gift, a lifetime support agreement and a will for the same property, and when a cohabiting partner is involved in the estate. A tax advisor when you have property abroad, digital assets or doubt the market value in the assessment. This page is general information; the Tax Administration's decision depends on the evidence you submit.

Sources

• Property Taxes Act (Zakon o porezima na imovinu, Sl. glasnik RS Nos. 26/2001 ... 92/2023 and 94/2024), Arts. 14-22, 34, 35 and 40
• Inheritance Act (Zakon o nasleđivanju, Sl. glasnik RS Nos. 46/95, 101/2003 - Constitutional Court decision and 6/2015), Arts. 8-23 (orders of succession)
• Tax Procedure and Tax Administration Act (Zakon o poreskom postupku i poreskoj administraciji, Sl. glasnik RS No. 80/2002 et seq.), Arts. 75 and 180
• Personal Income Tax Act (Zakon o porezu na dohodak građana, Sl. glasnik RS Nos. 24/2001 ... 80/2026), Arts. 72a, 75 and 77
• Tax Administration: Inheritance and gift tax, taxpayer guide (July 2025)
• Tax Administration: ePorezi portal
• Property Taxes Act, Inheritance Act and Tax Procedure and Tax Administration Act, consolidated texts (paragraf.rs), used to check the wording of individual articles