At first undertaken for emergency reasons, the appropriation and confiscation of real estate in Algiers rapidly became one of the main issues for the French high command in the colony. Initially made without any juridical framework or unified procedure, the transfer of real estate gave rise to the norms of public action in a confused and empirical manner. It leads to questioning the ways in which a colonial government elaborates and legitimizes its field of prerogatives. At the same time, the precocious development of a private property market, partly characterized by speculative purchase under pressure from new European buyers, led them to claim the supremacy of the market both against the arbitrary power of the high command and against the previous ways of possession. Analyzing local practices and debates therefore enable us to understand how the issue of real estate became a central factor in redefining the prerogatives of the colonial authorities and, furthermore, in the evolution of liberal thought in France. Most of the actors in this process referred to liberalism to legitimize their action. The experience of the Algerian case was hence used in the forging of a pragmatic liberalism, which aimed to justify a differencialist and arbitrary conception of the law in favor of the “useful” settlers, against forms of collective property and religious endowments. It permits us, thus, to re-examine the roles of the State and the market and the way in which colonization influenced liberal thought.