Albania, an attractive country located on Southeastern Europe’s Balkan Peninsula, has undergone a series of reforms to enhance its business climate and consolidate its institutions, leading to a more stable and prosperous country. Presently, Albania is experiencing a notable rise in investments and tourism, making the country very favorable for real estate investments.
A notable benefit of investing in property in Albania is its affordability. Albania is one of Europe’s countries where living expenses, housing costs, and property prices are comparably less expensive when compared to any other European country. This article provides comprehensive information on the property rights of foreign citizens in Albanian real estate investments, and other benefits as regulated by the Albanian Government.
The Eligibility of Foreign Citizens to Acquire Real Estate
Foreigners possess equal rights to purchase property in Albania as locals, whether it’s in the capital or along the coast. Foreign individuals or entities engaging in or having undertaken investments in the Republic of Albania are entitled to acquire land upon successful completion of the investment in compliance with the issued construction permit. This right is granted when the value of the acquired or constructed assets exceeds three times the initial value of the land.
The transfer of ownership rights for agricultural land, forests, meadows, and pastures is not entitled to foreign individuals and entities. However, they enjoy the privilege of leasing these properties for a period of up to 99 years. The above restriction does not apply if a new Albanian company is formed, whether it’s entirely owned by a foreign investor or established by purchasing shares in existing Albanian companies.
However, exception to the leasing policy applies for the agricultural land exceeding 1000 square meters, which requires the establishment of a local legal entity for purchase by a foreigner. Otherwise, a foreigner can buy any type of property without any limitations. It should be noted that when it comes to obtaining a residence permit through property purchase, a foreigner must own at least half of the property and at least 20 square meters per person. The value of the property does not affect the eligibility for a residence permit. In addition, the buyer must be aware of various taxes and fees associated with the purchase of real property, including registration and notary fees, as well as possible municipal fees and property insurance for new buildings.
High Areas for Real Estate Investment, Prices, and Return on Investments
Tirana, the capital city of Albania, has experienced significant economic and social development, attracting both tourists and business professionals.
When looking to buy property in Tirana, these areas are the most popular choices: Blloku, City Center, Komuna e Parisit, and the Artificial Lake area. These neighborhoods each have their exceptional character and draw different types of residents, which as well, notably, have high demand for rentals.
The sale price ranges vary from €1,300 to €2,000 per square meter, while as rentals start at €400 for rented apartments, depending on the quality and location.
Coastline Cities: Durres, Vlorë and Sarandë
Durres: Durrës is the second most populous city of the Republic of Albania. It is a vibrant coastal city in Albania, with an intriguing mix of history, culture, and the exquisite beauty of the Mediterranean. Buying a property in Durrës as well is subject to different price ranges, typically starting at €700 Euro per square meter in the city center. The value of a square meter for an apartment in Durrës city center might differ from a beachfront property. Landlords can expect to earn a monthly rental income of approximately €200-€800, depending on the quality and location of the property.
Vlorë: Vlorë stands as a beautiful coastal city along the renowned Albanian Riviera, celebrated for its stunning beaches and diverse dining options notable for the rich mediterranean cuisine. Property sale prices in Vlorë start at €600 Euro, depending on the location. Landlords can expect a monthly rental income of approximately €250-€700, depending on the quality and location of the property.Top of Form
Sarandë: The city of Sarandë is one of the most desirable markets for international purchasers, who upon visiting the city over the summer, return in the fall to purchase a home. Due to its closeness to the airport on Corfu Island, Sarandë continues to be the city of choice for purchasers from northern Europe and Scandinavia. Property sale prices in Sarandë start at €700 Euro, but the price may be lower or higher depending on the area. Landlords can expect a monthly rental income of approximately €300-€700, depending on the quality and exact location of the property.
Incentives for Ownership of Real estate for Foreign Citizens
The Albanian government has implemented a range of incentives, designed to safeguard and enhance the prosperity of foreign investors. The Law on “Foreign Investments” aims to create a favorable investment climate and provides the guarantees for protection to all foreigners willing to invest in Albania, as follows:
No limitation on the percentage share of foreign participation in companies. A 100% foreign ownership is possible; Albania’s tax system does not differentiate between foreign and domestic investors; foreign investments enjoy equal and unbiased treatment as the domestic investments and have complete protection.
Financial Incentives
Albania applies foreign tax credits rights even in case there is no double tax treaty in place with the country where the tax is paid. If a Double Taxation Treaty is in force, double taxation is avoided either through an exemption or by granting tax credit up to the amount of the applicable Albanian corporate income tax rate.
Dividends and profit share paid by a resident or non-resident company to a resident taxpayer will not be subject to corporate income tax for the resident taxpayer.
Accommodation facilities “Five stars hotels, with special status” as per the definition provided in the legislation on tourism, holders of an internationally recognized and registered trademark are exempt of tax buildings
Residential buildings of heads of households, who benefit retirement or social pensions, who live in city or villages, when the family consists of only pensioners are exempt of tax buildings.
Other Incentives
Through the purchase of real estate, foreign citizens can get a residence permit in Albania to maintain their property. The application for the residence permit is online and quite simple to complete. It is important to note that foreign nationals who buy real estate in Albania are eligible for a residence permit for up to one year, with the possibility of renewal for another year. Applicants must evidence ownership of at least half of the property, maintained throughout the residence permit validity.
The government allows the leasing of public properties larger than 500 square meters or grants a concession for just € if the purpose is to use them for manufacturing with an investment of over 10 million euros or for inward processing activities.
The state could provide assistance in the form of auxiliary infrastructures for the recognized strategic investments, facilitating project preparation, implementation, and investment realization. This included such as roads as well as water supply lines, sewage systems, electric lines, and communication services. In accordance with Albanian law, lands, forests, agricultural lands, and other immovable assets belonging to the Albanian state can used for the development and execution of strategic investment projects.
The real estate sector Albania is an ideal space for those who want to maximize income from real estate investments. Strategic geographical position, long seashores of the Adriatic and Ionian seas, and close proximity to major European cities access to short flights are features that make it exceptionally attractive.
If you are interested to invest in Albania, it is advisable to consult with a professional on investment opportunities that best suit your needs. Our firm specializes in international taxation, and our team is ready to assist with any related matters. If needed, we can connect you with top professionals to support your business activities in Albania. Please feel free to contact us.
