Buying an off-plan apartment — also known as a pre-construction or investment purchase — is becoming increasingly popular in Serbia. The reason is simple: prices are lower than for completed apartments, and the potential for value appreciation during construction attracts both buyers and investors.
But this option also carries specific risks. In this article, we walk through everything you need to know before signing a contract.
What Does Buying Off-Plan Mean?
When you buy an off-plan apartment, you sign a contract with the developer before the building is completed. Payment is typically made in installments, tied to construction phases:
- Upon signing: 20–30% of the total price
- After rough construction: 20–30%
- After facade completion: 20–30%
- Upon handover/move-in: Remaining 10–20%
The price is usually 10–20% lower than the price of a completed apartment in the same building after construction.
Advantages of Buying Off-Plan
1. Lower Price
The biggest advantage. Developers offer lower prices to secure financing during construction.
2. Choice Options
In the early phase, you can choose:
- Exact apartment location within the building
- Orientation and floor
- Layout type (if the developer offers variations)
- Some finishing materials (tiles, parquet, colors)
3. Value Appreciation
The apartment’s value typically rises during construction. If you buy early, you can sell at a higher price before or after completion.
4. Tax Savings
If it’s the first transfer of a new building, VAT (20%) applies but is already included in the price. On subsequent resale, the new buyer pays only 2.5% transfer tax.
Risks and What to Watch For
⚠️ 1. Developer Fails to Complete the Building
This is the biggest risk. If the developer goes bankrupt or abandons the project, you could lose both the apartment and your invested money.
How to protect yourself:
- Verify the developer has a building permit
- Check the developer’s previous projects — were they completed on time?
- Check the developer’s financial standing (Serbian Business Registers Agency)
- Request a bank guarantee or insurance company guarantee
⚠️ 2. Construction Delays
Even if the developer completes the building, delays of 6–12 months are common.
How to protect yourself:
- Include penalty clauses for delays in the contract (e.g., 0.1% daily of the contract price)
- Define realistic completion deadlines and interim phases
⚠️ 3. Quality Doesn’t Match Promises
Installed materials and finishing work often deviate from what was promised.
How to protect yourself:
- Precisely define material specifications in the contract (type of parquet, tiles, windows, doors, heating)
- Request the right to inspect before handover and the ability to bring a professional
⚠️ 4. Contract Not Notarized
A pre-contract or purchase agreement for an off-plan apartment must be notarized to be legally valid.
How to protect yourself:
- Do not sign anything without notarization
- Verify the contract is registered in the land registry
⚠️ 5. Occupancy Permit Issues
Without an occupancy permit, you cannot move into the apartment or register ownership.
How to protect yourself:
- Contractually obligate the developer to obtain the occupancy permit
- Do not pay the final installment until you see the occupancy permit
Step by Step: How to Safely Buy Off-Plan
Step 1: Research the Developer
- Check the Serbian Business Registers Agency (APR) — basic data, financial reports
- Visit previous projects built by the same developer
- Ask residents about their experience
Step 2: Verify Documentation
- Location permit — does it exist?
- Building permit — has it been issued?
- Project — is it compliant with all regulations?
Step 3: Review the Contract
- Precise apartment specifications (size, floor, orientation)
- Payment schedule by phases
- Completion deadline and delay penalties
- Quality guarantee
- Right to terminate and refund
Step 4: Notarize the Contract
Without notarization, the contract is not legally binding.
Step 5: Monitor Construction
Regularly visit the construction site and check progress. Photograph each phase.
Step 6: Handover
Before signing the handover report:
- Inspect the apartment with a professional
- Verify everything matches the contract
- Do not sign until you are satisfied
Taxes and Costs
When buying off-plan:
- VAT (20%) — included in the price, paid by the developer to the state
- Notary fees — 0.5–1% of the value
- Land registry — ownership registration after obtaining the occupancy permit
If you later sell:
- Property transfer tax (2.5%) — paid by the new buyer
- Capital gains tax (15%) — if you sell within 10 years
When Is Buying Off-Plan Worth It?
Buying off-plan is worth it when:
- The developer is verified and reliable
- The contract is well-drafted and notarized
- You have the financial security to make installment payments
- You plan to hold the property long-term (5+ years)
It is not worth it when:
- The developer is unknown or suspicious
- The contract lacks protective mechanisms
- You need the apartment immediately (waiting 2–3 years)
- You have no financial buffer for unexpected delays
Conclusion
Buying an off-plan apartment can be an excellent investment — but only if you are well-prepared. The key lies in documentation, developer verification, and a solid contract.
Don’t rush. Research. Ask questions. And never sign anything you don’t fully understand.
Need help buying an off-plan apartment? The EREA team can help you verify the developer, review the contract, and navigate the entire process safely.