The Ministry of Finance of Albania has opened a new draft law on property tax for public consultation. The reform aims to fundamentally change Albania’s property taxation system by introducing a market-value-based model and increasing local government revenues.
Under the proposed legislation, revenue from property tax will remain a local tax. However, the calculation method will change. Instead of relying mainly on property size and reference prices, the new system will assess taxes based on the property’s actual market value.
In addition, the reform seeks to improve tax fairness. As a result, the tax burden will more accurately reflect both property values and taxpayers’ ability to pay.
The draft introduces tax rates that are capped by law. For residential buildings, rates would range from approximately 0.1% to 0.2% of the property’s market value. Meanwhile, rates for land and other property categories could reach up to about 0.25%, depending on their use.
Furthermore, the proposal includes relief measures for primary residences and certain social groups. It also provides for a gradual implementation of the new system to ease the impact of the reform.
According to the draft, the rollout will take place in phases. The new taxation system for buildings is scheduled to begin in 2029, while land taxation under the new model would start in 2031. Until then, the current system will remain in force.
The reform also envisages the creation of a Fiscal Cadastre and a central support structure to assist municipalities in administering and collecting the tax.
Finally, the Ministry of Finance estimates that, once fully implemented, revenue from property taxation could reach between 0.7% and 1% of GDP, up from the current level of around 0.28%. Consequently, property tax could become one of the main sources of funding for local governments and municipal public investments.
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