Finance Minister Petrit Malaj said on Friday the draft would relieve the tax burden for the vast majority of homeowners, while strengthening the principle of fiscal fairness by requiring those who own more property to contribute more.

Under the proposal, homeowners would receive a 50% reduction on the property tax for their primary residence, while owners of two or more residential properties would be eligible for the discount on only one dwelling.

The draft law sets property tax rates at 0.1%-0.2% for residential buildings, 0.15%-0.25% for commercial buildings, 0.05%-0.15% for agricultural and forest land, and 0.075%-0.175% for building land and land designated for other uses.

Unfinished buildings would be taxed at 30% of the applicable rate for their respective category.

Malaj said the reform would provide municipalities with additional revenue to finance infrastructure, schools, public spaces and local services, while preserving existing property tax levels for homes valued at up to 16.8 million leks.

The draft legislation has been published for public consultation before being submitted to parliament.

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The General Directorate of Taxation said individuals and companies have benefited from fiscal incentives under the programme, significantly lowering costs linked to the transfer and declaration of real estate assets.

The scheme allows property owners to reflect the updated market value of their assets while benefiting from a preferential tax rate set under current legislation, it added.

Authorities said the revaluation process remains open until December 31, 2026, urging citizens and businesses to take advantage of the measure.

Finance Minister Petrit Malaj said revenues from the scheme reached about 3.9 billion leks in the first two months, adding that early results outperform the previous revaluation programme in 2022 and are expected to exceed its total intake by the end of the year.

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The Director General of Property Taxation in the Ministry of Finance and Economy Lavdërim Sahitaj told the Albanian Telegraphic Agency (ATA) on Tuesday that the new property tax hike is devised to strengthen the tax revenue and financial portfolio of municipalities across the country.

Despite the increased taxation rate, Sahitaj said that government will provide a 50% deduction bonus of the taxable property value for the first apartment of every citizen.

“The law will centralize whole information on property tax throughout the country and such centralization process will be carried out via a fiscal cadastre system already installed in almost every municipality all over the country,” Sahitaj said.

He said that transition from a fiscal reference price to taxation rates based on the market value of properties is one of the best regional and European practices,

“Transitioning to the market-based property tax system means fairer taxation for all citizens, businesses and properties,” Sahitaj added.

Ha noted that a wide group of social categories have been exempted from the increased property taxation.

Sahitaj said that the legislation has been drafted in collaboration with the government of Sweden.

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The Albanian government’s draft law envisaging new increase in fiscal reference prices for properties and apartments has brought about significant changes in property tax payments.

However, the draft excludes a large number of needy families and social categories from the property taxation.

According to the new changes, no property tax is levied on the state properties, religious properties, unfinished buildings, accommodating structures, including four and five-star hotels, residential units of buildings being used by tenants with non-liberalized rents, as well as residential units of buildings owned family heads entitled to benefit social assistance.

Exemption from property tax will not apply to state properties that have been leased, leased or through any other form of use, to private persons and plots of land owned by the state, where one or more building units have been built without permission or legalized, by possessors or other owners other than the plot owners.

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