The Albanian real estate market is booming and is projected to grow at an annual rate of 6.52%, reaching US 96.61 billion by 2028, according to Statista. Factors driving this surge include stable economic growth, creating job opportunities, and elevated living standards.
Perhaps you are considering purchasing an investment property in Albania or moving to the country and finding your ideal home.
Therefore, you’ll be interested in finding out exactly how much tax you will have to pay for purchasing, owning, etc.
In this article, we will go through the many types of property tax in Albania – don’t panic, they’re normally fairly modest. In the end, we will present you with a real-life example of how much it would cost you to own property throughout its lifetime.
Table of Contents
Property Tax In Albania
Property Agency Commission
Property sales and rentals involve commission rates, with sellers typically paying 3% and buyers 1%. Rental commissions vary based on factors such as lease value and duration, facilitating fair transactions in the real estate market.
Notary Fees
Navigating property transactions involves notary fees, typically ranging from EUR 150 to EUR 450. These fees cover the legal documentation and verification processes, ensuring a secure and transparent transfer of property ownership. Notarial fees largely depend on the amount of documentation and due diligence required.
Real Estate Insurance
Most often, when taking out a loan to purchase a property in Albania, the lender will insist that the buyer purchase disaster insurance for the property. The standard rate is 1% of the transaction amount.
Taxes For Owning a Property
Annual Property Tax
For property owners, Albania applies an annual tax equivalent to 0.05% of the cadastral value (an official property registry that includes a valuation of the property – this latter is often very different from the property’s real value) to residential buildings. This ensures a sustainable source of revenue for the local government. Note that commercial property is taxed at a rate of 0.2%. The annual property tax is normally paid as part of the water bill.
Tax On Buildings
The tax on buildings is determined by the construction area in square meters, paid annually. For residential properties, the payment is conveniently spread across 12 equal instalments, easing the financial burden on property owners. This tax is calculated automatically by the government and is paid through one’s water bill.
Education Infrastructure Tax
Albania imposes a temporary tax for educational infrastructure, set at ALL 1800 or approximately EUR 17.5 per year per family. This contribution aids in the improvement and maintenance of educational facilities. The tax for educational infrastructure is subject to all families, natural or legal persons, local or foreign, who reside and exercise economic activity within the territory of the Municipality of Tirana and will be recorded on the water bill.
Cleaning And Garbage Disposal Fee
The waste collection tax in Albania varies by location, ranging from EUR 9.6 to EUR 48 per year. Families pay this fee in 12 equal instalments, emphasizing responsible waste management and maintaining clean surroundings. This is also paid via one’s water bill.
Income Tax On Property Rental Income
Additionally, those earning rental income are subject to a 15% tax rate, contributing to the overall economic ecosystem.
Municipal Fee
The municipal fee in Albania is calculated between 0.1% to 2.5% of the official property value, depending on the region’s cadastral value. This localised approach ensures that municipalities can tailor their funding requirements to their specific needs.
Tax on Agricultural Land
Albania categorizes agricultural land tax based on districts, ensuring a nuanced approach considering regional land use and productivity variations.
Building Land Tax
For urban property, the building land tax is based on the area in square meters, with a rate of ALL 0.56/m2. This tax plays a crucial role in urban planning and development.
Agricultural Land Tax
Albania categorizes agricultural land tax based on districts, ensuring a nuanced approach that considers regional variations in land use and productivity.
Other Taxes
City Tax (Only Applies To Tourists)
When it comes to staying in Albania, it’s essential to understand the City tax, a common feature in European cities. Albania imposes a municipal tourist tax of EUR 1 per person/night, a contribution towards the local infrastructure and services that make your stay enjoyable.
Hotel Tax
The hotel tax, likely included in the hotel price, contributes to tourism development. The tax levels vary depending on the accommodation category, supporting the hospitality sector’s growth.
Real-Life Example When Buying a Property In Tirana (Costs)
Let’s look at one example. Suppose you’re buying a property in Tirana for EUR 100,000.
- In this case, you will first pay 1000 EUR, representing the buying tax (1% of the total).
- After that, you will have some monthly residential property tax, which you pay in the water bill. In our example, it will cost around EUR 50.
- Another tax on the water bill is the infrastructure tax, which will be around EUR 18 yearly.
- Again, on the water bill, you will pay the cleaning tax, which will cost EUR 50 yearly.
- The TV tax is EUR 12 yearly, in the electric bill, so EUR 1 per month.
We roughly calculated in Tirana, but prices change due to the value of Kadastra, and it depends on each zone.
It Might Interest You:
- Guide to Customs Duties in Albania for Expats and Business Owners
- How to Open a Bank Account in Albania: A Guide for Expats
- How To Move To Albania Without Paying Import Taxes
