Contrary to what was announced by Prime Minister Edi Rama, the revaluation of real estate for the purpose of reducing the capital gains tax on sales will not be possible until January 2025.
Last July, Rama said the tax would be reduced from 15% to 5% and that the law would come into effect at the end of September.
Parliament, however, suspended approval of the bill due to difficulties related to the process of property revaluation. The law requires more time due to the need to examine the evolution of reference prices of real estate throughout Albania. The Ministry of Finance is currently developing a new reference price map, which will reflect the significant increase that has occurred in some areas of the country, especially in coastal tourist resorts.
In the meantime, a situation of partial stalemate has occurred in the real estate market. While private citizens and businesses have suspended the sale of their properties pending the new law on revaluation, builders have continued to sell, as they are not subject to capital gains tax. In fact, on the first sale of the property, there is no difference between the purchase price and the selling price.
The bill on the revaluation of real estate was introduced in May 2024 by socialist MP Blerina Gjylamenti. The initial draft provides for a tax cut to 3% for property owners who request revaluation from local Land Registry offices.
The taxable base is calculated as the difference between the updated value of the property – no lower than the minimum fiscal price – and the value of the registered property.
For example, for the sale of an apartment with an initial value of 120,000 euros, revalued to 150,000 euros, the owner will pay a tax on the capital gain.
Property revaluation and tax cut on sales will help to give greater vitality to the real estate market and put a stop to so-called “informal” sales. The 15% tax in fact left the possibility of setting a fictitious selling price to avoid paying high taxes.
This is the third real estate revaluation campaign promoted by the government in the last 13 years. According to many real estate experts, tax cut should be permanent, as lower taxation encourages regular investments in real estate, reduces tax evasion in real estate transactions, and adjusts the value of properties to real market prices.
