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Everything you need to know is included in our Albania Property Pack
Albania is a popular destination for foreigners who want to invest in real estate.
It is a country of stunning landscapes, a proud cultural heritage, and welcoming people. But buying property in a foreign country can be a complex process, particularly when it comes to laws and regulations.
This guide is designed to help foreign buyers understand the property market in Albania. It provides all the information you need, in an easy-to-follow and straightforward format.
Also, for a more in-depth analysis, you can check our property pack for Albania.Can you purchase and own a property in Albania as a foreigner?
If you are American, we have a dedicated blog post regarding the property buying and owning process in Albania for US citizens.
Buying real estate in Albania as a foreigner involves several key considerations and regulations, which differ somewhat from those for local buyers.
Firstly, foreigners can indeed purchase property in Albania, including apartments, houses, and commercial buildings.
However, when it comes to owning land, there are more restrictions. Foreign individuals are generally not allowed to own agricultural land, but there are some exceptions for companies that are registered in Albania.
This means that if you're a foreigner looking to invest in agricultural land, you might need to establish or partner with a locally registered company.
Your rights as a foreign property owner in Albania are largely similar to those of local citizens. You have the right to buy, sell, rent out, and inherit property.
But, remember that the process of buying property might involve more legal and bureaucratic steps for foreigners, including extra paperwork and potentially longer waiting times for approvals.
There are no special rules that vary significantly based on your country of origin. The Albanian real estate market is quite open, and the same general rules apply to most foreign buyers, regardless of their nationality.
However, it's always a good idea to check if there are any bilateral agreements between Albania and your home country that might influence your property rights or tax obligations.
Residency in Albania is not a requirement for buying property. You can purchase real estate whether you live in the country or not. This makes Albania an attractive option for foreign investors or those looking for a holiday home.
Regarding visas and permits, buying property in Albania does not automatically grant you a residence permit or visa.
If you plan to stay in the country long-term, you'll need to apply for the appropriate visa or residence permit through the usual channels, separate from your property purchase.
You don't typically need a specific authorization from a governmental institution to buy property, but the process does involve legal checks to ensure the property is free of encumbrances and that the seller has the legal right to sell it.
As for minimum investment, there is no legally defined minimum amount that you must spend on real estate in Albania to qualify as a foreign buyer.
The investment size will largely depend on your personal preferences, budget, and the type of property you're interested in.
Can you become a resident in Albania by owning a property?
Albania did not have a direct real estate investment residency program like some other countries.
This means that simply purchasing property in Albania does not automatically qualify you for residency. However, there are other pathways to residency that you might consider, which can be indirectly related to owning property in the country.
If you're interested in residing in Albania, there are typically a few standard routes. One common method is applying for a residency permit based on employment, business investment (not limited to real estate), or family reunification.
Another option, particularly relevant for retirees or those with independent means, is applying for a residency permit as a self-sufficient individual.
In this case, owning property in Albania could be an advantage, as it demonstrates your ties to the country and your financial commitment.
The requirements for these types of residency vary. For example, if you're applying as a self-sufficient individual, you might need to show proof of sufficient income or savings to support yourself without needing to work in Albania.
The exact amount required can vary, so it's essential to check the most current requirements from the Albanian immigration authorities or consult with a local immigration lawyer.
As for the duration of residency permits, they usually start with a temporary residency, which can be renewed. These permits might last for one year or more, depending on the specific circumstances of your application.
After a certain period of continuous and legal residency in Albania, you might be eligible to apply for permanent residency.
Regarding citizenship, obtaining Albanian citizenship typically requires several years of continuous residency, along with fulfilling other criteria such as language proficiency and knowledge of Albanian culture and history.
Owning property in Albania can be part of your long-term residency strategy, but it's not a direct path to citizenship.
It's difficult to say how many people have used these routes to gain residency in Albania, as this data isn't readily available and can fluctuate based on various factors, including changes in immigration policy.
Thinking of buying real estate in Albania?
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Market metrics
You can find fresh and updated data in our pack of documents related to the real estate market in Albania.
If we check the the GDP per capita indicator, it seems that Albanian people have become 16.4% richer over the course of last 5 years.
With the population experiencing increased affluence, the demand for real estate may surge, potentially causing prices to rise in the future.
The platform Numbeo indicates us that rental properties in Albania offer rental yields between 3.0% and 5.7%.
These yields are typically seen in markets with average demand and rental rates, where the rental income generated from the property covers the expenses associated with owning and maintaining it, while also providing a modest return on investment.
To know more, you can also read our dedicated article: is it a good time to buy a property in Albania?
The life as an expat
Life as an expat in Albania can be an exciting and rewarding experience.
The country is known for its friendly and welcoming people, and its diverse culture and history. The capital city of Tirana is vibrant and bustling, with plenty of nightlife and entertainment options. The countryside is also stunning, with beautiful beaches, mountains, and national parks. The cost of living is relatively low, making it an attractive destination for expats. The transportation infrastructure is also well developed, making it easy to get around the country. Overall, Albania is a great place to live and work as an expat.
That said, there are a few challenges that expats may face when living in Albania. The language barrier can be a challenge, as Albanian is the official language and English is not widely spoken. Additionally, the legal system and bureaucracy can be slow and difficult to navigate. Finally, the healthcare system is not as developed as in other countries, so expats may need to seek medical care outside of Albania. Despite these challenges, life as an expat in Albania can be a rewarding and enjoyable experience.
What are the best places to buy real estate in Albania?
This table summarizes some of the best places to buy a property in Albania.
| City / Region | Population | Average Price per sqm (€) | Strengths |
|---|---|---|---|
| Tirana | ≈ 600,000 | 1,200 - 2,500 | Capital city, economic center, cultural attractions, vibrant nightlife |
| Durres | ≈ 115,000 | 1,000 - 2,000 | Coastal city, beautiful beaches, historical sites, close to Tirana |
| Vlora | ≈ 79,000 | 1,500 - 2,500 | Seaside town, Mediterranean climate, scenic views, tourist destination |
| Saranda | ≈ 20,000 | 1,500 - 2,500 | Coastal resort, UNESCO World Heritage sites, popular tourist spot |
| Shkoder | ≈ 77,000 | 900 - 1,800 | Historical city, proximity to Lake Shkoder, cultural events |
| Berat | ≈ 48,000 | 1,000 - 2,000 | UNESCO World Heritage site, well-preserved Ottoman architecture |
| Gjirokaster | ≈ 25,000 | 800 - 1,500 | Historical town, Ottoman-era buildings, birthplace of Enver Hoxha |
Do you need a lawyer when buying a property in Albania?
When you purchase a property in Albania, engaging a local lawyer can be beneficial to ensure a smooth and legally compliant process.
One important document they can assist with is the Kontrata e Punes (Sale-Purchase Agreement), which is a legally binding contract between the buyer and seller that outlines the terms and conditions of the sale.
The Albanian lawyer can also assist with conducting a Property Title Search to verify the ownership and status of the property, ensuring that there are no legal disputes or encumbrances.
Furthermore, they can guide you through the process of obtaining the necessary permits and authorizations from local authorities for property acquisition.
They will ensure that all applicable taxes and fees, such as the Property Transfer Tax and Notary Fees, are paid correctly and in accordance with Albanian laws.
What are the risks when purchasing a property in Albania?
We've got an article dedicated to the risks associated with purchasing property in Albania.
The risks involved in buying a property in Albania are unique, and vary depending on the location of the property.
There are some risks that are specific to Albania, such as the risk of land grabbing. Land grabbing is when individuals or companies illegally take possession of land that is not rightfully theirs. This can be done by bribing local officials, or by taking advantage of a weak legal system.
Another risk is that of currency risk. Albania has a volatile economy, and the exchange rate of the Albanian lek (ALL) can fluctuate significantly. This can cause significant losses to buyers if they are not aware of the risks.
Additionally, the Albanian property market is still relatively undeveloped, and there is a lack of reliable information available about the market. This means that buyers may not be able to accurately assess the risks associated with buying a property.
Finally, it is important to be aware of the risks associated with corruption and fraud. In Albania, corruption is still a problem, and there have been cases of buyers being scammed by dishonest sellers or agents. It is important to do thorough research and seek advice from a reliable source before making any decisions.
Everything you need to know is included in our Albania Property Pack
What are the required documents for a real estate transaction in Albania?
When buying a property in Albania, the following documents are typically required:
1. Identification documents (national identity card, passport, etc.) for both the buyer and the seller.
2. The deed of sale (Kontrate Shitblerje).
3. The certificate of ownership (Certifikate Pronesie).
4. A title deed (Prone Kontrate).
5. A certificate of tax clearance (Certifikate Levizjesh Fiskale).
6. A certificate of registration (Certifikate Regjistrimi).
7. A certificate of occupancy (Certifikate Posesie).
We review each of these documents and tell you how to use them in our property pack for Albania.
What strategies can you use for successful negotiations with Albanians?
When negotiating to buy a property in Albania, consider key aspects of Albanian culture that can influence the process.
Fist, you must know that pamily plays a central role in Albanian society, so building personal relationships and showing respect for family values can enhance negotiations.
Also, hospitality is highly valued, and it is customary to offer refreshments during meetings. This gesture of hospitality helps foster a friendly atmosphere and may positively impact the negotiation process.Time is often viewed as flexible in Albania, so patience and a flexible approach are important. It is common for negotiations to take longer than expected, so being adaptable and maintaining a calm demeanor is essential.
Yes, direct communication is appreciated, but it is crucial to balance assertiveness with politeness.
Finally, understanding the local real estate market and legal procedures is vital to negotiate effectively when buying a property in Albania
Are mortgages available to foreign nationals in Albania?
Yes, foreigners can obtain property loans in Albania. The Albanian government allows non-residents to apply for property loans, subject to certain conditions and requirements.
Foreigners looking to obtain a property loan in Albania generally need a valid residence permit, proof of income or employment, and must meet the specific criteria set by the lending institutions in the country.
Foreigners might try their chance for mortgages with banks such as Raiffeisen Bank Albania, Banka Kombëtare Tregtare (BKT), and Intesa Sanpaolo Bank Albania in Albania.
Moreover, mortgage rates in Albania for a 20-year term range from 3% to 7%, which are significantly favorable.
What are the taxes related to a property transaction in Albania?
Here is a breakdown of taxes related to a property transaction in Albania.
| Tax | Description | Calculation | Who pays |
|---|---|---|---|
| Capital Gains Tax | Tax on the profit from the sale of the property | 15% on the difference between the sale and purchase prices | Seller |
| Property Tax | Annual tax on the property's value | 0.05% of residential property value and 0.2% of commercial property value | Owner |
| Value Added Tax (VAT) | Applied to the sale of new buildings | 20% of the sale price | Buyer |
| Property Transfer Tax | Levied on the transfer of real estate | 2% of the property value | Buyer |
What fees are involved in a property transaction in Albania?
Below, you'll find a list of fees involved in a property transaction in Albania.
| Fee | Description | Calculation | Who pays |
|---|---|---|---|
| Municipal Fee | Levied by the municipality for property services | 0.1 to 2.5% of the contract amount (depending on the region) | Buyer |
| Notary Fee | Charged for notarizing the property contract | Varies between 0.23% and 0.35% of the transaction value | Buyer |
| Registration Fee | Paid for registering the property transfer | Varies depending on the location and the type of property being transferred | Buyer |
| Real Estate Agency Fee | Applicable if a real estate agency is involved | 3% of the sale value by the seller and 1% of the sale value by the buyer | Seller and Buyer |
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