Low prices and beautiful nature are two things that attracted tourists to Albania at first. After that, real estate buyers stand in line, and finally, investors. So how to buy property in Albania as a foreigner?
Is Albania a good place to buy a property?
Albania is popular for its Mediterranean shore and coastal areas. The season starts on April 1, and you can begin your summer life until the middle of fall.
The most popular resorts to look for apartments and houses in Albania are Sarandë, Durrës, and Vlorë. Here you can find a warm place under the sun for yourself or rent. If you are interested in real estate investment, do consider Tirana – the fast-developing capital city of Albania.
Can I own property in Albania?
Albania’s real estate market is open. Foreigners have the same rights as residents, which means they can buy residential and commercial real estate as individuals throughout the country. The exception is agricultural land with more than 1,000 sq.m. In this case, the buyer needs to open a legal entity.
Can I get a residence permit by purchasing a property in Albania?
To obtain a residence permit, a foreigner must own at least half of the area of the property and at least 20 sq.m. per person. The value of the property does not matter.
Is property expensive in Albania?
Albania is not a member of the European Union. But the news about the intention to become part of the EU is heating the local real estate market. The rising prices are also affected by the increasing construction costs.
Over the past seven years, real estate in Albania has increased in price by more than 50%, according to the country’s Central Bank. Prices in 2021 increased by 8.4%. Analysts note the most significant growth in the capital Tirana, where apartments and cottages have risen in price by about 12.3%.
Even the pandemic has not become a hindrance to the Albanian housing market. In the first half of 2020, real estate prices rose by an average of 4.9%. There was no decline in the activity of developers and a significant decrease in the pace of construction in Albania.
After the crisis receded, the construction activity began to grow.
Thus, in the first quarter of 2022, the number of permits issued for new development increased by almost 60% compared to the same period of the previous year. Perhaps this is because lending to developers has been growing in the country recently.
Nevertheless, the cost of Albanian square meters is still low compared to other resort countries.
Obligations of foreign property owners
There is no purchase tax in Albania. But a buyer pays for the property registration in their name with the National Cadastral Agency (€90) and a small municipal fee for the primary market transactions. It is a one–time payment for the transfer of title rights to the buyer from the seller – a construction company. The fee amount varies depending on the region of the country and varies from €3 to €10 per sq.m.
There is no charge for secondary market objects.
The buyer must purchase insurance for the primary market properties. This requirement has been in effect since January 1, 2020, and applies to both residents and non-residents of the country.
The cost of insurance for ten years is 1% of the real estate price specified in the contract of sale.
By the way, you can pay for the registration service, municipal fees, and insurance to a notary.
The owner must pay an annual tax on residential real estate in the amount of 0.05% of the minimum cadastral value of the real estate in a particular area and a rental tax of 15% of revenue.
The real estate buying process in Albania
1. Property reservation
The buyer makes a preliminary contract or a deposit agreement with the seller to secure the right for the object.
2. Payment for the transaction
The payment is carried out within a week (with full payment) to several months (with installments) from the deposit agreement signing. The buyer transfers money to the transit settlement account of the notary according to the current legislation of Albania. Such measures contribute to transparency.
3. Conclusion of the purchase and sale contract
The last payment happens at that stage. The main contract of sale is signed when the buyer has fully transferred the entire amount to the notary’s transit account.
4. Registration of ownership
The transaction is registered with the National Cadastral Agency by a notary. You become a property owner in Albania.
Mortgage in Albania
Albanians or EU/US citizens can apply for a loan as an individual entity. The banks will usually finance up to 70% of the requested cost but in the amount of no more than €300,000.
The loan can be issued for up to 30 years. The rate is floating (LIBOR 1Y + 3-4%).
In conclusion
- A foreign citizen has the right to buy real estate in Albania according to the same laws as a resident.
- Ownership of a real estate object gives the right to a residence permit.
- No taxes are charged from the buyer for buying property in Albania.
- The procedure for buying real estate by foreigners in Albania is as transparent as possible.
- The participation of an interpreter is mandatory.
