Is it legal to set housing price references?

According to our analysts:

– the intervention is considered lawful, if the government argues that reference prices are necessary to address informality and create a formal market. The Albanian Constitution gives the state the right to intervene for purposes of public interest.

– it is considered unlawful if the intervention is disproportionate, exceeding the purpose and imposing unjust restrictions on the rights of individuals.

1. The principle of proportionality (Article 17 of the Constitution of Albania)

The Albanian Constitution allows the restriction of rights and freedoms only if this is done:

a. Proportionately, not exceeding the limits necessary for the intended purpose.

b. In accordance with the public interest, without violating fundamental rights.

If the establishment of reference prices leads to:

Unfair or disproportionate taxes.

Unfair restriction of market transactions.

…then it can be considered a violation of proportionality and, therefore, unconstitutional.

Experience from other countries and international law

Similar practices in other countries have largely proven to be legal, as long as:

– Reference prices are used for tax and administrative purposes, not to impose restrictions on contractual freedom.

– The state guarantees transparency in the methodology for setting references and updates them periodically to reflect market dynamics.

In conclusion,

The setting of reference prices is not necessarily unconstitutional or in violation of citizens’ rights, as long as:

– It respects the principle of proportionality and transparency.

– It serves legitimate purposes, such as formalizing the market and combating informality.

– It does not directly interfere with market value and the contractual freedom of individuals.

If the government uses this mechanism in an unclear, arbitrary, or without a solid legal basis, then it could be considered a violation of constitutional rights.