Taxes on Real Estate in Albania 2024: Everything You Need to Know
Property Tax: Everything You Need to Know
This tax applies to all registered real estate properties, both residential and commercial. Regulated by Law No. 9632/2006:
- Main tax rates:
- Residential properties: 0.05% of the cadastral value.
- Commercial properties: 0.2% of the cadastral value.
- Tax base: The cadastral value determined by the State Cadastre Agency (ASHK).
- Payment deadlines: Annual or in installments, depending on municipal regulations.
- Law No. 9632/2006, Articles 4 and 7.
Tax on Property Purchase: Rates and Documentation
Purchasing a property requires paying a transfer tax regulated by local regulations:
- Tax rate: 2% of the declared property value.
- Required documents:
- Ownership certificate.
- Official evaluation of the cadastral value.
- Law No. 9632/2006, Article 5.
Income from Rentals: Rates and Tax Obligations
According to Law No. 29/2023, income from rentals is subject to a 15% tax.
- Calculation: Total income minus documented deductible expenses.
- Obligations: Registration of the rental contract and annual declaration of income.
- Penalties: In case of non-declaration or non-payment, penalties are imposed in compliance with Albanian tax legislation.
- Law No. 29/2023, Article 24.
Capital Gains Tax: How to Calculate It
The sale of a property is subject to capital gains tax, regulated by Law No. 29/2023.
- Rate: 15% on net gains.
- Calculation of gain:
- Selling price minus the initial purchase cost and documented deductible expenses.
- Law No. 29/2023, Article 17.
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Registration Costs and Tax Exemptions
This tax relates to administrative costs associated with registering a property:
- Transfer tax: 10,000 – 15,000 ALL.
- Mortgage certificate: 2,000 – 5,000 ALL.
- Law No. 9632/2006, Article 9.
Tax Exemptions
- Exemptions for social housing: Reductions or exemptions applicable to properties used for social purposes.
- Reductions for historic properties: Properties registered as cultural heritage benefit from tax reductions.
- Law No. 9632/2006, Article 11.
Frequently Asked Questions About Real Estate Taxes in Albania 2024
What are the tax rates for residential properties in Albania? Tax rates range from 0.05% to 0.15% of the cadastral value.
Do I need to declare rental income in Albania? Yes, it is mandatory to declare rental income, which is taxed at 15%.
What happens if I don’t declare rental income? Penalties are imposed in compliance with Albanian tax legislation.
Conclusion
The Albanian tax system is structured to encourage transparency and compliance. However, it is essential to meet tax obligations to avoid penalties.
