Is a combination of political, legal, cultural, economic, and geographic factors making Albania the next big thing in Overseas property investments?
A recent report drew an extremely favorable picture of the future of property investment in the country, which is currently Europe’s least developed and, despite positive developments, still suffers from a poor to non-existent infrastructure, including its road and electricity networks.
According to the report, Albania could be following in the steps of other destinations on the Balkans that experienced big property investment booms over the last decade. “Recently Albania has put itself firmly on the map, both as an increasingly popular tourism destination, and an emerging market on the international property investment scene”.
Political problems have prevented the issuing of construction permits for a period of two years and this was only resolved at the end of 2007. Albania is set to join NATO later this year and the EU in 2014, as a result of “huge advances in democracy”.
Economically, Albania has experienced a 6 per cent GDP growth, while at the same time retaining relatively low living costs.
Foreign investment in Albanian real estate has also been facilitated by the country’s legal framework. The few restrictions on foreign ownership that are in place make it relatively easy for international buyers: they can make a commercial investment if its value exceeds three times the cost of the land, and though agricultural land may not be purchased it can be leased for 99 years.
International buyers can also benefit from the low transaction costs and Albania’s tax advantages: there is no capital gains tax, no withholding tax, no inheritance tax, no Value Added Tax on property purchases, no state or wealth taxes and no transfer tax. Capital appreciation can reach up to 30 per cent, according to the company, depending on the investment.
Whilst we feel that this report might be a little optimistic, and Albania still has some hurdles to cross both politically and socially, these recent advances are certainly a step in the right direction. One thing certainly worth bearing in mind considering the recent headlines in the UK, is that Albania is a majority Muslim country with different laws to much of the rest of Europe.