The Albanian government wants to revise the housing tax
The Albanian government intends to change the housing tax, and the revision will affect not only the rate but also the mechanism of calculation. The authorities are already working on the project, studying the tax legislation in order to make adjustments.
According to the government, a new methodology for calculating the tax on residential property will be presented next year. The aim of the project is not to change the tax rate, the amount of which is now 0.5%. It is planned to analyze the entire tax base and its elements, including the consideration of real estate prices. At the moment for these purposes, they take into account the average size of the fiscal value of a square meter, designated in the state reference book. The rates differ from region to region and from city to city, and for Tirana, each of the 32 cadastral districts has a different property price.
Now the authorities intend to revise the taxation mechanism, taking into account the market value of the objects. The changes will primarily help to bring the tax accrual process closer to the real situation on the market. In addition, it will make it possible to equalize current prices with the average figures recorded in the reference book. Now the difference between them is a big problem, especially in the premium new buildings sector. To change the amount of the tax there will be used data from recent sales/purchase transactions. In addition, officials promise to study other sources in order to fully assess the situation in the sector.
As for the real estate market, according to official statistics, the cost of apartments in Albania for the current year increased by 28.4% compared to the same period in 2021. In the capital of the country, the cost of housing increased by 28.5%.
It should be noted that the real estate market in Albania is open to both local and foreign citizens. The only exception is agricultural land if it is more than 1 thousand square meters. In this case, a foreign buyer can buy them only by setting up a legal entity in the country.
For foreign investors, mortgages are available, and the bank can cover up to 70% of the object value, but the amount of the purchase must not exceed 300 thousand euros. Loans of up to 30 years can be taken out in the local currency Lek or Euro, in which case the loan rate will be floating. In Albania, there is also an investment program for obtaining a residence permit. This year, the government has made a number of changes regarding the confirmation of the financial solvency of the buyer and other aspects. In general, the program to obtain a residence permit in exchange for investment in Albania is an affordable option for those who are looking for ways to change their place of residence.