The Algerian government has proposed a new measure to combat real estate fraud by introducing a right of preemption for the state on properties sold at undervalued prices. According to the 2027 finance bill, the state will have the right to purchase properties at the declared price if it believes the sale price is too low. This move aims to prevent tax evasion and increase transparency in the real estate market. The bill proposes to modify the existing law on tax procedures to allow the tax administration to exercise this right.
The proposed right of preemption will have a deadline of one year from the date of registration, up from the current three months. This longer timeframe will allow the tax administration to gather necessary data to evaluate the declared price of a property. The bill also excludes certain types of transactions from the right of preemption, such as sales between family members, concessions to state-affiliated organizations, and sales for public interest projects.
The decision to exercise the right of preemption will be communicated to the buyer or their heirs through a bailiff or registered letter with acknowledgment of receipt. The state will pay the declared price to the buyer, along with legally justified expenses related to the sale process. The buyer, not the seller, will receive compensation for the transaction.
The government believes that undervalued property sales result in significant tax evasion, depriving the public treasury of rightful revenue and undermining market transparency. The current system makes it difficult for authorities to prove price concealment, often relying on external factors that are hard to establish with certainty.
The proposed changes also aim to shift the focus from sellers to buyers, as the latter are the ones who are deprived of their acquired property. By providing full compensation to buyers, the state aims to ensure a fair process. Additionally, the bill proposes abolishing the right of preemption related to the acquisition of company shares, as this measure is seen as no longer necessary.
The right of preemption will apply to various types of properties, including real estate, commercial premises, and lease rights. However, certain transactions, such as sales at public auctions or those made for religious purposes, will be exempt from this measure. The government hopes that these changes will help to increase tax revenue and promote a more transparent real estate market.
The new measures are part of a broader effort to improve tax collection and prevent tax evasion in Algeria. The government has been working to modernize its tax system and make it more efficient. The proposed changes to the real estate market are expected to be debated and potentially implemented in 2027.
Key points
- The Algerian government proposes introducing a right of preemption for the state on undervalued properties to combat real estate fraud.
- The state will have one year to exercise this right, up from the current three months.
- The proposed measures aim to increase tax revenue and promote a more transparent real estate market.
