How to Buy Real Estate In North Macedonia as a Foreigner
Who can buy property in North Macedonia?
Foreigners can buy real estate in North Macedonia. The legal framework allows non-residents to purchase various property types, including land and buildings; however, specific conditions must be considered. Foreigners can typically purchase real estate directly, but they often need to establish a legal entity, such as a company, if they intend to buy agricultural land or larger parcels. Transactions for real estate are usually conducted through asset deals or share deals. Asset deals involve transferring ownership of assets from the seller to the buyer, while share deals entail acquiring the owner company along with its liabilities. The process may involve some bureaucratic procedures, including obtaining approval from the relevant authorities.
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Investing in North Macedonia real estate offers significant potential due to the country's emerging economy, strategic location in Southeast Europe, and a growing demand for residential and commercial properties. North Macedonia has been experiencing steady economic growth, and its capital, Skopje, is becoming increasingly attractive to both domestic and foreign investors. The real estate market in North Macedonia is relatively affordable compared to Western European countries, presenting opportunities for substantial returns on investment as property values rise.
The government has been implementing reforms to improve the business environment, making it easier for foreign investors to navigate the market. Additionally, North Macedonia's beautiful landscapes, rich cultural heritage, and potential for tourism development enhance the appeal of real estate investments, particularly in popular areas like Ohrid and Bitola.
Below are some sought-after destinations for real estate investment in North Macedonia:
- Skopje - As the capital and largest city of North Macedonia, Skopje is a central hub for residential and commercial real estate. Key areas such as Centar and Vodno are particularly desirable due to their vibrant atmosphere, modern amenities, and accessibility. Skopje offers a mix of luxury apartments and traditional homes, making it an attractive choice for investors looking for urban properties.
- Ohrid - Known for its stunning lakeside views and rich cultural heritage, Ohrid is a UNESCO World Heritage Site that attracts both tourists and investors. Popular areas around Lake Ohrid, such as the Old Town and Lagadin, are ideal for holiday homes, guesthouses, and luxury villas. The thriving tourism industry and natural beauty make Ohrid a prime location for real estate investment.
- Bitola - A charming city with a rich history, is gaining popularity among those seeking a quieter lifestyle. The city's historical architecture and proximity to nature appeal to retirees and investors alike. Areas like the city center and the surrounding countryside offer opportunities for both residential properties and vacation rentals.
- Struga - Located on the shores of Lake Ohrid, Struga is known for its picturesque landscapes and relaxed atmosphere. This area is ideal for those interested in beach homes and vacation rentals, with easy access to both natural attractions and cultural sites. The strong rental market during the tourist season adds to its appeal for investors.
- Kumanovo - One of the largest cities in North Macedonia, offers a diverse real estate market with affordable property options. Its strategic location near the border with Kosovo makes it a promising area for commercial investments and residential developments.
Where to find properties online:
Financing
Foreigners can obtain mortgage loans in North Macedonia, although the process may differ from that for local citizens. Several banks and financial institutions offer mortgage options to non-residents, allowing them to finance their property purchases. Typically, lenders may require a larger down payment, often ranging from 20% to 30% of the property's value. Foreign borrowers must provide documentation to verify their income and financial stability, which can include proof of employment and income from their home country.
Due Diligence and Sales Contract
Due diligence entails a thorough investigation of the legal aspects associated with a property transaction. The primary objective is to uncover any potential legal issues that might impact the transaction, ensuring that the property is free from legal encumbrances and that all parties involved have the authority to proceed with the sale or purchase. Collaborating with experienced legal professionals well-versed in the complexities of North Macedonia's property laws can significantly strengthen the due diligence process.
The property sales contract is a legally binding document that details the terms and conditions agreed upon by both the buyer and the seller. This contract includes essential information such as the purchase price, payment terms, deposit amount, and specific details about the property, including any fixtures or inclusions. Once the contract is signed by both parties, it becomes legally binding, with the buyer typically required to pay a deposit, usually around 10% of the purchase price, to secure the agreement. The final transaction is completed according to the terms outlined in the contract, which may involve additional payments and the formal transfer of ownership. It is advisable for both parties to seek legal assistance to ensure that the contract complies with local laws and regulations.
Property Buying Costs and Taxes in North Macedonia
| Transaction Costs | ||
| Who Pays? | ||
| Property Transfer Tax | 2.00% - 4.00% | buyer |
| Notary fees | 0.10% - 0.50% | buyer |
| Legal fees | 0.10% - 1.00% | buyer |
| Real Estate Agent's Fee | 2.00% | seller |
| Costs paid by buyer | 2.20% - 5.50% | |
| Costs paid by seller | 2.00% | |
| ROUNDTRIP TRANSACTION COSTS | 4.20% - 7.50% | |
| Source: Global Property Guide, PWC | ||
Footnotes to Transaction Costs Table
The round trip transaction costs include all costs of buying and then re-selling a property - lawyers' fees, notaries' fees, registration fees, taxes, agents' fees, etc.
Sales tax:
Sales tax on transfer of property and property rights is levied at 2.00% to 4.00% of market value.
Value Added Tax (VAT)
Value Added Tax (VAT) at 18% is imposed on the first turnover within five years of construction of residential buildings and apartments.
Agent's commission:
The real estate agent's commission is 2% of the property value. It is typically paid by the seller.
Legal fees:
Based on market practice, the Revenue Office requests sale agreements to be prepared by an Attorney at Law. Legal fees are generally negotiable but usually fall between 0.10% to 1.00%.
Legal Fee
The Revenue Office requests sale agreements to be prepared by an Attorney at Law, based on the market practice. Legal fees are generally negotiable.
Registration fee:
The registration fee is around 0.10% of the property value. Registration fee is generally negotiable.