Investors Guide to Albania

The Purchasing Process

The purchasing process is very similar to other European markets, although there are more contracts to be signed at each stage. The only restriction on foreign ownership in Albania is with agricultural land. It is highly recommended to use a lawyer specialising in Albanian property purchases.

Hiring a solicitor is not a legal requirement, yet they are useful for ensuring that the developer has not taken short cuts with obtaining building permits, or other legal documentation that could lead to faulty construction work. A lawyer will also be able to ensure that the property to be purchased is not one that was confiscated during the communist regime. Approximately 15% of the property in Albania is awaiting resolve and are mostly located along the coastal areas and in the capital, Tirana.

As with other markets, a holding deposit is paid while the buyer’s solicitor will check through all of the legal documentation. This involves signing the first of the contracts with a reservation agreement.

If the legal due diligence checks are completed to a satisfactory conclusion, the deposit of between 10% and 30% of the purchase price is paid. The second contract, the Undertaking Agreement, is then signed. This is the same as a private purchase contract, where the agreements and legal obligations of both parties are outlined.

Upon completion of a new construction, the final payment will be made. Another contract will be signed as the Sale-Purchase Agreement, while transferring the title deeds at the notary.

Fees & Taxes

Costs associated with purchasing Albanian real estate are very low in comparison with neighbouring markets. All of the buying costs are based on the purchase price of the property at a sliding scale, while the taxes in Albania are based on a fixed rate.

The legal fees can be negotiated as either a fixed price or a percentage of the property purchase price. The total associated buying costs will be between 1.15% and 1.75% of the purchase price.

• Notary fees are between 0.05% and 0.25%
• Lawyers fees are between 0.1% to 0.5%
• Buyer may be liable to pay agents fees of 1%
• Rental income is 10% flat rate
• Capital gains are 10% flat rate
• No inheritance tax
• Residents are taxed 10% flat rate on worldwide income

Financing the Property

As a property market that is considered to be at an initial emerging market phase, Albania offers a surprising number of modern mortgage options. Many western banks are present in the market and the terms of loans are very similar to what property investors are used to from more established markets.

The range of financing is competitive to the point where loans can be arranged in multi-currencies, with interest only repayment options also available. The terms and conditions of mortgages and financing will vary between providers and the applicant’s individual circumstances, yet as a guide the variety on offer enable the following:

• Loans of up to 80%
• Financing available up to 25 years
• Interest rates are around 5.25%
• Maximum age of applicants at loan maturity is 65 years

More about overseas property finance

Visitors Guide to Albania
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