Kosovo has undergone positive developments in many sectors, with a special focus on the real estate industry. This article aims to explain various property taxes in Kosovo, investment incentives, and many other important information which will support individuals or businesses looking to invest in Kosovo.
Real Estate Investment in Kosovo
The economic growth in Kosovo is leading to an increased demand for residential properties, particularly in urban areas where prices are constantly rising, causing significant changes in the real estate market. Developers are meeting this demand by building commercial structures and integrating eco-friendly technologies in their projects.
Kosovo’s improved infrastructure is attracting foreign investors, while the market is also adopting digitalization, which is making property transactions more transparent and accessible through online platforms.
Real Estate Taxation
VAT is not applied to land and residential areas in Kosovo, but properties are taxed based on the property’s value and location, based on the” The Immovable Property” tax law. Effective as of August 6th 2023, the property tax law has established a progressive tax system.
In Pristina, the property taxes range from 0.1% to 1% based on the property’s value. The tax value is calculated in Euro per square meter, taking into account the property’s location and type. Also, the cost for transferring a property in Kosovo is €150 per unit, defined as 100 square meters of residential or commercial building space, or 1 hectare of land, with the fee being determined at the municipal level.
The Eligibility of Foreign Citizens to Acquire Real Estate in Kosovo
On January 21, 2022, the Assembly of the Republic of Kosovo enacted a law regulating foreign citizens’ property rights. This legislation provides a structure for foreign individuals and organizations’ property rights to be created, transferred, protected, limited, or retained. Foreigners can buy property in Kosovo; however, they cannot possess agricultural land.
Foreign legal and natural individuals can obtain property rights through legal agreements, inheritance, court rulings at the state level, or other legal reasons. Individuals and legal entities from EU member states enjoy the same property rights as citizens of Kosovo.
Foreigners are not permitted to own public property, which includes natural resources, public goods, agricultural land, forests, and culturally significant property within designated zones. However, there are expectations that allow foreigners to own agricultural, forest, and forestry holdings under 5000 m² if the purpose is to construct a residential building. Long-term leasing, concession, and other agreements over limited properties are also acceptable under the same conditions as those for national individuals.
High Areas for Real Estate Investment and Prices in Kosovo
Real estate prices in Kosovo have increased significantly since the beginning of 2023, owing to favorable lending conditions, policies implemented by the State Agency of Real Estate (APN), and government housing subsidies. In central urban areas, the price of a flat is around €1,460 per square meter, while in less central areas, it drops to around €833 per square meter. Rental prices in city centers range from €295 to €354 per month, while in suburbs they can be as low as €218 or as high as €354 per month. Prices vary depending on location and property type, highlighting the market’s instability.
Pristina, the capital of Kosovo, plays an important role in the country’s real estate market as it attracts both local and international investors due to is many public administration offices, government institutions, and major businesses, particularly in the commercial and residential areas.
In the southwest, the culturally vibrant city of Prizren offers affordable traditional and modern apartments that are appealing to investors who are looking for cheaper options. Smaller cities such as Gjakova and Gjilan are developing real estate markets that feature inexpensive homes. Gjakova is famous for its architecture and beautiful natural surroundings, while Gjilan offers numerous business and residential possibilities.
Furthermore, Brezovica, located just 80 km south of Pristina and home to a ski center, presents an attractive investment option due to its popularity among tourists in the winter.
Prospective real estate investors should understand the legal and financial processes required. To effectively deal with these complexities, it is recommended that you seek advice from tax and legal experts. 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 Kosovo. Please feel free to contact us.
