Albania Changes Law On Building Tax

In November 2017, with Law no.107, the Albanian Parliament changed the methodology on which the payment of the tax on buildings was based, introducing fundamental amendments.

The building tax is a local tax which is calculated, administered and collected by the local authorities. The new methodology has been applicable since the 1st of April 2018. Since the institutions and the public bodies envisioned by the law are not yet established, the tax installment payment will begin later, once the local authorities are ready. This is not going to affect the payment, since it is an annual tax, and it could be paid at any time during the year.

The building tax is payable by individuals, physical or legal persons (either domestic or foreign), owners, users of the immovable properties, or persons that have applied for legalization, on the territory of the Republic of Albania, irrespective of the level of use of these buildings, unless otherwise provided by this law. The previous calculation of the tax was done on the basis of the building's surface area.

In order to apply the newly established methodology, several legal institutions and administrative bodies are being created. The "fiscal cadastre" is the central registry of the real estate database that serves for purposes of administering the immovable property tax. The General Directorate of Property Tax is a budgetary public legal entity, subordinate to the finance ministry.

In case the taxpayer wants to appeal the level of the tax applied, he/she must address it not to the mayor (which was the case in previous provisions), but rather to the local body in charge of tax appeals, whose decision may further be brought in front of the court. The law provides for several exceptions from the tax on buildings:

state and local government properties which are used for non-profit purposes; state-owned properties which through a Decision of the Council of Ministers are transferred in the administration of state-owned public companies; residential buildings used by the leased tenant, that have a lease not yet liberalized since the communist regime; social housing owned by municipalities; buildings, owned by legal or physical entities, which - under agreements with municipalities - are used by the latter for social housing; buildings used by religious communities for their activities...

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