The Union of Municipalities of Montenegro, in cooperation with the Ministry of Finance of Montenegro, will request the Parliament of Montenegro to urgently submit a request to the Constitutional Court of Montenegro to suspend the constitutional review proceedings concerning Article 3, paragraph 2, item 2 of the Law on Property Tax, in the part referring to “buildings under construction” and “other structures”. The Constitutional Court initiated the constitutional review proceedings by its Decision of 25 December 2024, following an initiative submitted by two attorneys from Podgorica and Bar. Should these provisions be declared unconstitutional, municipalities would be required to suspend the enforcement of all ongoing collection procedures based on final and legally binding property tax decisions relating to buildings under construction and other structures issued pursuant to these provisions. At the same time, they would no longer be able to initiate new property tax proceedings for such properties.
Municipalities unanimously agree that such an outcome would create serious difficulties for their functioning, potentially even jeopardising their financial sustainability. According to preliminary estimates, a single municipality would immediately suffer a budget loss of almost **EUR 850,000**. Furthermore, based on previous experience, municipalities warn that this could once again create opportunities for certain law firms to recover millions of euros from local budgets by submitting requests for the amendment of these tax decisions. A similar situation occurred in the past when, by exploiting legal loopholes, inadequate provisions in several tax laws, and inaccuracies in the Real Estate Cadastre and the Central Population Register, standardised appeals and lawsuits were filed, resulting in substantial procedural costs that placed a significant financial burden on municipal budgets. In addition, investors may exploit legal ambiguities through different interpretations of phased construction, by exceeding the scope of construction permits, changing investors during the construction process, or using different accounting classifications, such as “construction in progress” or “inventory”, practices that are frequently used in reality. The legislator must prevent such abuses in the public interest.
For this reason, the Union of Municipalities of Montenegro proposes that, once the Constitutional Court of Montenegro suspends the constitutional review proceedings, the Parliament of Montenegro adopt, under an urgent procedure and within the deadline set by the Constitutional Court, the Draft Law on Amendments to the Law on Property Tax. The proposed amendments would address the identified constitutional concerns and resolve the issue in the only legally sound manner, without causing financial harm to municipalities.
In order to protect the interests of its member municipalities, the Union of Municipalities of Montenegro has convened a meeting of its Governing Board, enabling local government leaders to take a coordinated approach towards the Parliament of Montenegro. Representatives of the Ministry of Finance of Montenegro and the heads of parliamentary groups in the national Parliament have also been invited to attend, so that they can be directly informed of the potential consequences for municipalities and consider the Union’s initiative.
As a form of support, the Secretariat of the Union of Municipalities will, within a short timeframe, prepare for the Ministry of Finance and the Parliament of Montenegro a draft Law on Amendments to the Law on Property Tax. The proposed amendments will fully safeguard the interests of municipalities while ensuring compliance with the requirements of the Constitution.
Zajednica opština Crne Gore
