The ever-growing real estate market in Kosovo shows no signs of stopping. Even amid high prices, demand for real estate keeps growing. This demand is largely driven by Kosovo’s diaspora living in the EU and other Western countries. It is also fueled by foreign nationals and foreign companies who find properties in Pristina and other major cities in Kosovo attractive as investments.
As Kosovo continues to attract foreign interest in its real estate market, in 2022, Kosovo approved the Law on Property Rights of Foreign Citizens in the Republic of Kosovo, establishing the conditions under which foreigners may acquire property rights in Kosovo. This regulation represents an interplay between the Law on Property Rights for Foreign Nationals and the Law on Cadastre.
The main characteristic of the new law is that it conditions the right of foreign citizens and foreign companies to acquire immovable property in Kosovo on the principle of reciprocity. This means that foreign nationals and foreign companies can acquire real property in Kosovo provided that Kosovo’s citizens and companies would be able to acquire real property under similar conditions in the foreign national’s country. For instance, if a Swiss citizen would want to acquire a building in Kosovo, it must first be established if a Kosovar citizen can acquire the same category of real estate in Switzerland, and, if so, under which conditions.
Reciprocity can be established either in the manner and conditions established by law or by an international agreement between states. As a way of legal reciprocity, the law provides that foreign nationals and foreign companies from the EU states may acquire ownership rights under the same conditions as Kosovo’s citizens. In all other cases, reciprocity must be established beforehand.
The Law on Property Rights of Foreign Citizens foresees that the procedure for determining reciprocity will be further regulated by a sub-legal act in the form of a regulation. This regulation has been approved and is in force since late 2023. The regulation foresees two main aspects.
First, that reciprocity can be determined and verified at the request of the foreign person or the person who intends to sell the property, and that determination will be made by the Legal Department of the Ministry of Justice of Kosovo. And second, a database on reciprocity would be established in collaboration with the Immovable Property Rights Register (IPRR).
As regards the first, the Ministry of Justice of Kosovo, upon request of a foreign person, shall obtain all necessary information from the legislation of the foreign country to establish whether that country offers the same real estate rights to Kosovo’s citizens. In addition, it also assesses whether the conditions for acquisition by Kosovo’s citizens are the same or similar to those in Kosovo.
As regards the second, the register will contain the existence of reciprocity with individual countries to streamline the procedure. This register will be open to the public and will be published on the official website of the Ministry of Justice. As such, the register will allow for a simple way to keep track of reciprocity state by state and will facilitate the procedure for foreign nationals who want to be part of the real estate market of Kosovo. To date, however, this register is not yet published.
After reciprocity is determined and verified, the procedure to register the property rights of foreign nationals in the IPRR is the same as for the citizens of Kosovo as regulated by the Law on Cadastre. This step is important to comply with the principles of registration and publicity, with the Ministry of Justice and the Kosovo Cadastral Agency working in close cooperation.
These recent developments in Kosovo demonstrate a considerable commitment to increase the confidence of foreign nationals to engage in property transactions in Kosovo. Particularly, the clear procedures for determining and verifying reciprocity, as well as the integrated process of registration, ensure a more secure and accessible acquisition process that further enhances the attractiveness of Kosovo’s real estate market. These measures reflect Kosovo’s progressive approach toward international real estate investment, fostering a mutually beneficial environment for both local and foreign investors.
By Kushtrim Palushi, Partner, and Erza Arifi, Junior Legal Associate, RPHS Law
This article was originally published in Issue 11.2 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.
