Albanian houses - how to buy it.

The Albanian real estate market offers attractive opportunities, but it hides risks that an investor can easily overlook. Before signing any contract, it is essential to conduct a detailed verification of ownership rights and the land's history. This article explains the risks you may face and how to avoid them, including information on common scams and legal hurdles specific to Albania.

The Albanian Real Estate Market: Opportunity and Risk Combined

In recent years, Albania has become a magnet for international investors. Property prices remain lower than in Western Europe, tourism is on the rise, and the country is gradually integrating into European Union structures. All these factors create favorable conditions for capital appreciation.

The average property price in Albania varies by location; in prestigious parts of Tirana, prices reach approximately EUR 2,000–3,000/m². On the coast, prices typically range between EUR 1,000 and 2,000/m², and even higher in certain exclusive locations.

The challenge is that legal enforcement and the stability of ownership relations in Albania face historical specifics that are no longer common in EU countries. This means greater market flexibility, but also a higher risk of legal complications.

Our attorneys in Prague at ARROWS, who specialize in Real Estate and Development Law, frequently encounter cases of international investors who failed to properly verify ownership rights and later found themselves in costly legal disputes. Therefore, conducting thorough due diligence on the actual status of the property is crucial.

Legal Framework for Purchasing Real Estate in Albania

Before proceeding with any purchase, it is essential to understand the basic legal rules. The Albanian legal system (specifically the Civil Code and Law No. 111/2018 "On the Cadastre") determines who can buy property, how assets are registered, and the ownership rights of individuals.

However, there is a significant restriction under current legislation: foreigners cannot acquire agricultural land (tokë bujqësore), forests, or meadows as natural persons. If you are a foreigner wishing to buy land classified as agricultural, you must establish a legal entity in Albania. Most commonly, this is a limited liability company (SH.P.K.), which then purchases the land.

Registration of ownership is handled through the State Cadastral Agency (ASHK – Agjencia Shtetërore e Kadastrës). Ownership is considered secure only once the property is properly recorded in this register.

This is where difficulties often begin: the Albanian cadastre is still undergoing a process of digitalization and data consolidation. Many historical records may be inaccurate, incomplete, or duplicated. In practice, this means that a formal extract from the cadastre may not always reflect the complete legal reality.

microFAQ – Legal Tips on Basic Purchase Rules in Albania

1. Can I buy property in Albania as a foreign individual without forming a company?
Yes, if you are buying an apartment, a house (structure), or commercial space within a built-up area. The restriction applies to agricultural land – which requires the establishment of an Albanian company.

2. Is purchasing property in Albania safe in terms of ownership rights?
Theoretically yes, provided a thorough legal review is conducted. In practice, security is complicated by historical disputes and imperfect record-keeping. Without a legal audit, the risk is high.

3. What is the difference between the contract and cadastral registration?
A contract signed before a notary serves as the legal title (grounds) for acquisition, but ownership only transfers upon registration (intabulation) in the real estate cadastre. While the deadline for registration is set by law, the process can take longer in practice.

Historical Disputes and Common Legal Issues

To understand why buying real estate in Albania is more complex than in the West, one must know the country's history. Albania was a communist state until 1991, during which private property was prohibited. All land and property rights belonged to the state.

Many plots of land have unclear ownership, often with competing claims from multiple parties for the same plot (e.g., the original owner from before 1945 vs. the person who was granted the land in the 1990s). A significant portion of litigation in Albanian courts concerns property ownership.

Another issue involves illegal constructions. Following 1990, there was massive construction without building permits, and it is estimated that hundreds of thousands of structures were built "off the books." Subsequently, legalization laws were passed (notably Law No. 20/2020), but not all properties have successfully completed this process.

In practice, this means that when buying property in Albania, one cannot rely solely on the seller's claims. It is necessary to perform a rigorous legal check and verify:

• Current extract from the real estate cadastre (Kartela e Pasurisë)
• Consistency with the cadastral map (Harta Treguese)
• Absence of competing third-party claims and restitution disputes
• Absence of debts, liens (mortgages), or foreclosures
• Legalization status of the building and existence of a final occupancy permit

Attorneys from the ARROWS law firm in Prague routinely conduct comprehensive real estate due diligence in Albania.

microFAQ – Legal tips on historical disputes and ownership rights

1. How do I know if the seller truly has the right to sell the property?
You must request a current extract from the real estate register (Certifikatë Pronësie / Kartela) no older than 72 hours and compare it with the seller's identification documents. Furthermore, it is essential to verify the acquisition history.

2. What is a "competing claim"?
This is a situation where multiple persons claim to have rights to the same property. This can result from duplicate entries, incorrect privatization, or disputes between heirs.

3. How long does ownership verification take?
A high-quality legal audit usually takes 2–3 weeks. It is worth the wait – a rushed signature without verification can lead to the loss of your investment.

Real estate purchase procedure in Albania

Once you decide to buy property in Albania, a process with specific characteristics awaits you. The Albanian notary system is based on the Latin model (similar to the Czech Republic, see Act No. 358/1992 Coll., the Notarial Code), which provides a certain level of security but does not replace a legal review by an attorney.

Step 1: Property selection and preliminary negotiations

You begin by searching for a suitable property. At this stage, you negotiate the price and terms. Note: oral agreements in Albania often carry little weight until confirmed in writing or by a deposit.

Once a price is agreed upon, it is common to pay a reservation fee. Never pay a deposit in cash directly to the seller without a proper contract. The ideal way is to deposit funds into a notary escrow or an escrow account, or to sign a reservation agreement prepared by a lawyer.

Step 2: Legal audit – verification of ownership and absence of encumbrances

This is the most important phase. A lawyer will perform due diligence on the property. The audit should include:

• Verification of legal title – Checking the seller's acquisition titles (purchase agreements, inheritance decisions, legalization permits) up to 10–20 years into the past.
• Cadastral registry check – Verification online via the e-Albania portal as well as a physical check at the office to ensure data (area, boundaries) matches reality.
• Verification of encumbrances and liens – Determining whether the property is burdened by mortgages, easements, foreclosures, or tax arrears.
• Legality of the building – For buildings, it is necessary to verify the building permit (Leja e Ndërtimit) and the legalization certificate if the structure was built without a permit.

Our attorneys in Prague have access to the relevant registers and cooperate with local notaries for efficient screening. ARROWS insurance covers potential errors up to CZK 400 million, which represents a significant guarantee for the client.

Step 3: Signing the preliminary agreement

Often, a so-called Kontratë Paraprake/Premtim Shitje is concluded. This contract is binding and must be drawn up in the form of a notarial deed. It specifies the purchase price, installment schedule, exact identification of the property, the deadline for closing the final contract, and penalties for withdrawal.

This contract is recorded in the real estate register. This is a key step because it blocks the seller from selling the property to someone else.

Step 4: Final contract and payment

This is followed by the signing of the final purchase agreement (Kontratë Shitblerjeje). The contract is drafted in Albanian. If the buyer does not understand the language, it is a legal requirement to have a court interpreter present and to produce a bilingual version (usually English or Czech).

Payment of the purchase price should take place exclusively via bank transfer. Albanian laws restrict cash transactions between businesses, and even for individuals, transfer via bank or notary escrow is the safest protection against fraud. Funds are usually sent to the notary's account, who releases them to the seller only after the conditions are met.

Contact our experts

Step 5: Registration in the cadastre and handover

The notary is obliged to submit an application for registration of the transfer of ownership to the State Cadastre (ASHK). After the entry is made, a new ownership certificate is issued in the buyer's name.

Do not forget the handover protocol for the property. It is important to record energy meter readings and ensure the transfer of service contracts (water, electricity).

Risks and Sanctions	How ARROWS assists (office@arws.cz)
Insufficient legal audit: Purchasing property with a legal defect (restitution claim, foreclosure) can lead to total loss of ownership.	Professional legal audit: Our Czech legal team conducts an in-depth check of the property history and cadastral entries, minimizing the risk of future disputes.
Cadastral discrepancies: If the actual area or location differs from the cadastral map, there is a risk of neighbor disputes and inability to resell.	Technical documentation review: ARROWS, in cooperation with surveyors, verifies the alignment of legal and factual status and ensures the correction of registry errors.
Unbalanced contract: A contract that insufficiently protects the buyer or does not contain guarantees for hidden defects.	Preparation and revision of contracts: Our Prague-based attorneys prepare contractual documentation with an emphasis on protecting the client's investment and enforceable sanctions.
Illegal structures: Buying a property without proper legalization can mean the impossibility of reconstruction or even a demolition order.	Legalization check: ARROWS verifies the validity of legalization decisions and building permits directly with the relevant authorities.
Tax implications: Lack of knowledge of local tax regulations can lead to fines and unexpected costs.	Tax Optimization: Experts from ARROWS will explain tax obligations during the purchase, holding, and future sale of real estate under Czech and Albanian tax regulations.

Most Common Legal Obstacles and Ownership Disputes in Albania

When working with Albanian real estate, our Prague-based attorneys from the ARROWS law firm encounter several typical issues.

Overlapping Plots and Unclear Boundaries

Due to inconsistent mapping data, parcel overlaps (so-called "mbivendosje") occur. A plot may be registered in the cadastre, but on the map, it overlaps with a neighbor's plot. In such cases, the cadastre will refuse to issue a clean title deed or will block the transaction until the dispute is resolved.

Restitution Claims

Despite the long time since the fall of communism, not all restitution cases are closed. Plots in attractive coastal locations are particularly risky, as heirs of original owners may appear with claims for property return or financial compensation.

Unauthorized Buildings and the Legalization Process

Law No. 20/2020 regulates the completion of legalization processes. If you are buying a property that is in the process of legalization (an application has been filed but no final decision/certificate exists), you are essentially buying only the "hope" of ownership. Until legalization is legally completed and registered, the building does not legally exist or is considered an illegal structure.

Co-ownership and Pre-emptive Rights

If a property is owned by multiple people (e.g., siblings through inheritance), everyone must agree to the sale. If one co-owner sells their share, others have a statutory pre-emptive right. Ignoring this right can lead to the invalidity of the contract.

Verifying Ownership: A Practical Guide

How exactly is ownership verified in Albania? Here are the practical steps.

1. Extract from the Cadastre (Kartela e Pasurisë)

The fundamental document proving ownership. It must contain the owner's name, parcel number, area, and most importantly, the "restrictions" section (encumbrances, pledges). Today, it is obtained mainly electronically via the e-Albania portal with a digital stamp.

2. Cadastral Map (Harta Treguese)

The map shows the location of the property. It is necessary to check whether the shape and location of the plot correspond to reality and the fencing.

3. Certificate of No Debt and Status

Verification of whether there are outstanding debts on the property towards the state, municipality, or energy suppliers (OSHEE - electricity, waterworks). Unpaid electricity bills pass to the new owner with the meter if they are not settled.

4. Identification of the Seller

For individuals, checking the ID card or passport. For legal entities, an extract from the commercial register (QKB - Qendra Kombëtare e Biznesit) to verify if the managing director has the authority to sell the property.

Money, Taxes, and Hidden Costs of Purchase

In Albania, the system is set up so that income tax (capital gains) upon sale is paid by the seller. The rate is 15% of the difference between the purchase and sale price, as established by the regulations of the General Directorate of Taxes (Drejtoria e Përgjithshme e Tatimeve). Some municipalities (e.g., Tirana) may charge specific infrastructure fees for new buildings, which are usually included in the developer's price.

The notary's fee is regulated by a decree from the Ministry of Justice and is based on the transaction value. The system is degressive, but for standard properties, expect costs in the hundreds of euros, approximately 0.23% to 0.35% of the property price + VAT.

Cadastre fees (ASHK) for contract registration and certificate issuance are relatively low. They range in the tens of euros (approx. 5,000 – 10,000 ALL depending on the service type and speed).

Costs for legal representation and audit vary by complexity, usually ranging from 500 – 1,500 EUR or a percentage of the property price.

Real Estate Tax and Total Costs

The annual real estate tax in Albania has recently changed to a system based on market value. For residential buildings, the rate is usually 0.05% of the property value per year and is often collected through electricity bills.

Total closing costs for the buyer (excluding real estate agency commission) usually range within 1–2% of the property price (mainly notary and registration). This is significantly lower than in many EU countries.

microFAQ – Legal Tips on Taxes and Costs

1. Who pays the real estate agency commission?
In Albania, it is common for the seller to pay the commission, or it is split between both parties. The standard is 3–5%. Always clarify this in advance.

2. What if the seller wants to state a lower price in the contract for tax purposes?
This is illegal tax evasion. If you agree to a lower price in the contract, you expose yourself to the risk of sanctions and, in the future, when you sell the property, you will pay a massive capital gains tax.

3. How is rental income taxed?
Rental income is subject to income tax at a rate of 15%. You are required to register with the tax office.

Frauds and Dangerous Practices: How to Protect Yourself

The Albanian market carries risks of unfair practices.

Multiple sales is a fraud where a developer or owner sells the same apartment to multiple interested parties through private contracts that are not entered into the cadastre. Whoever registers first wins. The others only have a claim against the fraudster. Defense: Immediate registration of the preliminary contract in the cadastre by a notary.

Buying "off-plan" carries the risk that the construction will not be completed or the developer will go bankrupt. Defense: Payments tied to construction phases and withholding part of the price until the occupancy permit and title deed are issued.

Albania has tightened Anti-Money Laundering (AML) laws. Notaries and banks must report suspicious transactions and the origin of funds. If the seller pushes for payment in cash or through questionable channels, avoid the deal.

Risks and Sanctions	How ARROWS Helps (office@arws.cz)
Purchase of fraudulent property: Risk of multiple sales or sale by a non-owner.	Real-time verification: Checking the current status in the cadastre immediately before signing and blocking the property with a preliminary contract.
Forged documents: Risk of fraudulent powers of attorney or outdated title deeds.	Authenticity verification: Direct communication with issuing authorities and notaries to verify the authenticity of documents.
Hidden encumbrances: Purchasing a property with electricity debts or hidden pledges.	Comprehensive screening: Checking not only the land registry but also utility provider registers and court records.
Illegal construction: Risk of demolition or inability to connect to utility networks.	Technical-legal audit: Assessment of the building's compliance with zoning plans and valid permits.

Executive Summary for Management

For investors and decision-makers:

• Legal risks in Albania require a professional approach: Due to historical discontinuity and incomplete digitalization, one cannot rely on "good faith". Due diligence is a necessity, not a luxury.
• Cost efficiency: Transaction costs are low (notary, registration), but tax implications (15% upon sale) must be factored into the return on investment (ROI).
• Transaction security: Always utilize notary escrow accounts and bank transfers. Avoid cash and unofficial payments.
• Legal representation: Our attorneys from ARROWS law firm provide certainty in a complex environment, with professional indemnity insurance and knowledge of local law, protecting your investment from fatal errors.

Conclusion

Investing in real estate in Albania offers potential for high appreciation, but only for those who do not underestimate preparation. Prices are attractive, but the legal terrain can be a minefield.

Without a thorough legal audit and expert supervision, a purchase is risky, as historical disputes, incomplete land registry entries, or illegal constructions can devalue the investment. Our Czech legal team at ARROWS law firm understands the specifics of the Albanian market and knows how to eliminate these risks.

If you are considering an investment in Albania, do not risk your capital. Contact us at office@arws.cz to secure professional legal support.

FAQ – Frequently Asked Legal Questions on Real Estate Investment in Albania

1. Can I buy property in Albania as a foreigner without a legal entity?
Yes, foreigners can purchase apartments, houses, and commercial spaces as individuals without restrictions. Restrictions apply to agricultural land, which a foreigner cannot own directly (it can only be owned through an Albanian legal entity). For a secure structural setup, contact us at office@arws.cz.

2. How long does the property purchase process take in Albania?
The standard process takes 3–6 weeks. The legal audit takes approximately 1–2 weeks, followed by the signing of the contract. Land registry entry has a statutory deadline, but in practice, expect approximately 30 days. If there are defects in the documentation, the process may be extended.

3. What if a hidden debt on the property appears after the purchase?
Debts attached to the property (e.g., mortgages) transfer to the buyer if they are not cleared. Utility debts (electricity) can lead to the disconnection of meters. A legal audit by ARROWS will reveal these risks in advance so you don't buy a "pig in a poke."

4. Is it safer to buy a new build or an older property?
New builds carry the risk of non-completion or issues with final building approval (kolaudace). Older properties carry the risk of historical ownership disputes. Both require specific verification. For new builds, we vet the developer and building permits; for older apartments, we investigate the ownership history.

5. How much does a legal real estate audit in Albania cost?
The price depends on the property value and the complexity of the case, usually ranging from hundreds to low thousands of euros. Compared to the risk of losing the entire investment, it is a negligible amount. For a specific quote, write to office@arws.cz.

6. Is it possible to legalize an unauthorized construction after purchase?
Theoretically yes, if it meets the conditions of the law, but the process is complex, uncertain, and can be expensive. We strongly advise against buying an unlegalized property without prior consultation with an expert.

Disclaimer: The information contained in this article is for general informative purposes only and serves as a basic guide to the issue. Although we strive for maximum accuracy, legal regulations and their interpretation evolve over time. To verify the current wording of regulations and their application to your specific situation, it is essential to contact ARROWS law firm directly (office@arws.cz). We bear no responsibility for any damages or complications arising from the independent use of information from this article without our prior individual legal consultation and professional assessment. Every case requires a tailored solution; therefore, do not hesitate to contact us.