Buying property in Bosnia from the USA: POA, money, tax

You can buy property in Bosnia and Herzegovina (BiH) from the USA without flying over. You give a trusted person a punomoć (power of attorney), certified in the USA with an apostille or by the BiH embassy, and you pay by bank transfer, either straight to the seller or into a notary's escrow account. What you have to report in the USA depends on how you hold the property and any Bosnian bank accounts, so check that with a US tax adviser (CPA) before you buy.

This is general information, not legal or tax advice. A notary or lawyer in BiH confirms what applies to your case, and a CPA confirms what applies to your US taxes.

First: can you buy, and where

If you are a BiH citizen, you buy like any other citizen. If you hold only US citizenship, your right to buy depends on reciprocity and on the rules of the entity where the property is. BiH has two entities, the Federation of BiH (FBiH) and Republika Srpska (RS), plus Brčko District. In RS, a foreigner's ownership may need approval from the Ministry of Justice before it can be entered in the land register. See Can foreigners buy property in Bosnia? for the detail.

The required form of the sale contract also differs:

• Republika Srpska: under the RS Law on the Notary Service (Sl. glasnik RS 28/21), a transfer of ownership of real estate must be made as a notarski akt (a notarial deed, drafted and executed by the notary). A contract without that form is void.
• FBiH: in 2015 the FBiH Constitutional Court (case U-15/10) struck down Article 73 of the Law on Notaries, which had made a notarial deed compulsory. According to the FBiH Supreme Court's legal position, the parties' signatures are certified by a notary or a court, and a lawyer may draft the contract. A draft amendment to restore the requirement exists, so ask a notary what the rule is today.
• Brčko District: the Brčko Law on Notaries keeps a list of deals that need a notarial deed. Lawyers may prepare documents and represent clients before the notary.

This also shapes what the notary expects from your power of attorney, so your first practical step is to contact the notary who will handle the contract.

Power of attorney: two ways to certify it in the USA

The BiH Embassy in Washington describes two separate procedures: one for citizens with a valid BiH passport or ID card, and one for those without a valid BiH document.

Without a valid BiH passport or ID: Notary Public and apostille

According to the embassy's instructions, both the USA and BiH are parties to the 1961 Hague Apostille Convention. An apostille is a certificate that confirms a public document for use abroad, replacing embassy legalisation. The process is:

1. A US Notary Public certifies your signature on the power of attorney. You can often find one at your own bank, for example.
2. The Secretary of State of the US state where you live adds the apostille.
3. The embassy then does not need to certify the document, and it can be used in BiH.

The power of attorney must be written in Bosnian, Croatian or Serbian, or translated from English by an authorised (court) translator. Before you sign, check on your Secretary of State's website which office issues the apostille in your situation and what it requires.

With a valid BiH passport or ID: certification at the embassy

The embassy has a separate signature-certification procedure for citizens with a valid BiH document, and a bilingual Authorization Form on its services page. Confirm the exact steps and documents directly with the consular section. If you would rather use the Notary Public and apostille route instead, ask the notary in BiH first whether they will accept it in your case.

Embassy contact:

• 2109 E Street NW, Washington, D.C. 20037
• tel. +1 (202) 337-1500, consularaffairs@bhembassy.org
• the consular section receives clients from 10:00 to 14:00

The embassy's fee list shows 18.00 for signature certification, 18.00 for re-certification and 24.00 for a parent's signature on a power of attorney, charged per signature. Check the currency and current amounts in the fee list on the embassy website. BiH also has a Consulate General in Chicago, and the two offices split the US states between them, so ask the embassy which office covers your state.

What the power of attorney should contain

Notaries in BiH can reject a power of attorney that is too general. Include:

• full names, dates of birth, addresses and identification details for you and your attorney-in-fact
• an exact description of the property: type, address, land-register folio and parcel numbers, size
• each power listed separately: signing the pre-contract and contract, acting before the notary, paying the price, applying for registration in the land register, taking over the keys
• filing the property transfer tax return, if that tax applies in your entity and it is the buyer's obligation (see costs of buying property in Bosnia and confirm with the notary)
• whether the attorney may appoint someone else, and how long the power of attorney is valid

The safest approach is to have the BiH notary send you the text, or approve your draft, before you sign in the USA. Also ask whether a certified signature is enough or whether they need the power of attorney itself as a notarial deed. The answer may differ between entities.

Steps when buying from the USA

1. Choose and check the property. Ask for the ZK izvadak (land register extract) and check the owner and any mortgages or other burdens.
2. Notary and contract form. Agree on a notary and find out what they need from your power of attorney.
3. Power of attorney. Notary Public and apostille, or certification at the embassy. Then a translation if needed, and the original sent to BiH by courier.
4. Pre-contract and kapara (deposit), if agreed.
5. Payment directly to the seller or through the notary's escrow account.
6. Signing through your attorney, and the transfer tax return if it is the buyer's obligation in your entity.
7. Registration in the land register and handover.

Sending money from USD

There are two usual ways to pay:

• SWIFT transfer to the seller's foreign-currency account. It usually arrives in one to three business days. The risk is that you pay before you are registered as owner.
• Transfer to the notary's fiducijarni račun (escrow account). The notary holds the money and releases it to the seller only when the agreed conditions are met, for example your registration as owner. The notary charges a fee for this, so ask what it is under the notary tariff before you agree.

Practical points:

• The rate between the dollar and the convertible mark (KM, the Bosnian currency) changes daily, and banks apply their own conversion rates. Compare your bank's rate and fees with the receiving bank's before sending a large sum.
• Agree in the contract which currency the price is in (KM or EUR) and who bears exchange-rate differences and bank charges.
• Banks in BiH check where money comes from. Have evidence ready: bank statements, a sale contract for property you sold, payslips.
• The seller's bank may ask for a certified copy of the contract to justify the incoming foreign currency.
• Do not carry or hand over cash without a receipt and a contract.

For more, read how to pay for property in Bosnia safely.

Reporting foreign property in the USA

Treat this section as a starting point only. Your obligations depend on your tax situation, and each point should be confirmed with a CPA who knows foreign assets, using the official pages linked below.

Questions to ask your CPA:

• Is property held in my own name reportable? Holding it directly may be treated differently from holding it through a company or a bank account. The IRS comparison of Form 8938 and FBAR: irs.gov.
• FBAR (FinCEN Form 114) for foreign accounts, such as a BiH account you use to pay the price or receive rent. Ask which threshold and deadline apply to you; the deadline commonly cited is 15 April with an automatic extension to 15 October. Source: irs.gov - FBAR.
• Form 8938 (FATCA) and its thresholds, which depend on filing status and where you live: irs.gov - FATCA.
• Form 3520 if part of the money is a gift or inheritance from a foreign person: irs.gov - gifts.
• Rent and sale: how rental income and gains are reported, and whether tax paid in BiH can be credited: irs.gov - Publication 527.
• Buying through a BiH company: whether extra filings arise, for example Form 5471: irs.gov - Form 5471.

Bosnian taxes on rent and sale are a separate topic.

Common mistakes

• A general power of attorney "for all matters" with no property description.
• Signing in the USA before the BiH notary has approved the text.
• A power of attorney in English with no authorised translation.
• An apostille from the wrong office, without checking with the Secretary of State.
• Paying the full price to the seller before checking the land register extract and without any payment protection.
• Opening a BiH bank account without asking your CPA whether it must be reported.

Example

Amra lives in Chicago. She is a BiH citizen by birth, but her BiH passport expired years ago, so she has no valid BiH document. She chose a two-room flat of 54 m² on the 4th floor in Čengić Vila, Sarajevo, listed at 339,000 KM. She viewed it by video tour, and a lawyer reviewed the land register extract.

The notary in Sarajevo sent her the text of a power of attorney for her brother, with the land-register folio number and each power listed separately. Amra signed it before a Notary Public at her bank, and the Illinois Secretary of State added the apostille. She sent the original by courier, and an authorised translator in Sarajevo translated the parts in English. She paid the price into the notary's escrow account, and the notary released it to the seller once the agreed conditions were met. Before opening a BiH account for future running costs, she spoke to her CPA about reporting.

How DMI helps

DMI currently has 8 flats for sale, all in Sarajevo. The median asking price is 5,722 KM per m² (from 7 listings, range 3,667 to 6,574 KM). We visit every property in person and check the land register, legalisation status and photos before publishing. We offer video tours to buyers abroad and can put you in touch with a notary and a translator so your power of attorney is right the first time. See all properties for sale.