Property tax, how will the deduction for the first home be made? - Anyone who has more than two properties pays 50% above the value for one of them.
All real estate in Albania will be taxed at market value, whether they are residential units, commercial premises, or land. The tax base on real estate is the taxable value of the real estate.
Referring to the new draft law of the Ministry of Finance, submitted for public consultation, building units included in the category 'residential buildings' will be taxed 0.1% - 0.2%; buildings for economic activity 0.15% -0.25%; Plots included in the category 'agricultural-livestock land and forest land 0.05% - 0.15%; Plots included in the category 'land plot' and 'land with other uses' 0.075% - 0.175%.
While the tax rate for an unfinished building is 30% of the tax rate of the respective taxation category in which the unfinished building is classified. As for the tax on residential units, the draft law provides for a discount for the first apartment.
Specifically, according to Article 8 of the draft law, "The deduction applies only to the individual's first residence. The deduction is equal to 50% of the assessed value of the first residence, but in any case cannot exceed the maximum deduction threshold, approved by the Municipal Council.
For homes valued up to twice the deduction threshold, the tax is calculated only on 50% of the value of the home. As a result, the individual is only required to pay half (1/2) of the tax they would pay if the property were not their first home. For first homes valued above that, only the portion of the value corresponding to the deduction threshold is exempt from taxation, and the tax is calculated on the portion of the value exceeding this threshold.
The Municipal Council may increase up to 20%, through a reasoned decision, the maximum threshold of the deduction only in cases where this increase is justified by special circumstances, in order to mitigate the immediate effects of the tax increase as a result of unusual changes in housing values.
The co-owner or co-possessor of a building unit that serves as a primary residence has the right to a deduction for the primary residence, in proportion to his assigned share.
An individual who owns or possesses 2 or more dwellings is entitled to a deduction for the first dwelling, for only 1 of these dwellings, regardless of the fact that the dwellings may be located in different Municipalities.
While individuals who own or possess only 1 apartment automatically benefit from the discount for the first apartment, and do not have to declare themselves to the relevant Municipality.
According to the draft, individuals who own or possess more than one apartment must declare to the relevant Municipality, by June 30 of the year preceding the tax year, the building unit that serves as their first apartment, in order to benefit from the deduction for the first apartment in subsequent tax years.
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